APR Co., South Korea's fast-growing beauty company, has outpaced the country's second-largest cosmetics firm LG H&H Co. in terms of market capitalization as legacy giants are missing out on the momentum of the K-beauty boom.
As of July 25, APR's market capitalization stood at 6.53 trillion won ($4.7 billion), surpassing that of LG H&H.
The bigger rival's market cap has fallen to 5.38 trillion won, just one-fifth of its value at the end of 2020. APR debuted on the Kospi in February 2024.
APR, better known for its Medicube skincare line and AGE-R beauty devices, has also narrowed the gap with sector leader AmorePacific Corp., the market value of which has plunged 42% to 7 trillion won since the end of 2020.
The shake-up highlights the global rise of Korean cosmetic products, which has propelled lesser-known indie K-beauty brands onto the global stage.
Analysts point to the big players' mass production structure, heavy reliance on offline sales channels and lackluster M&A activity as main reasons that they have lost ground to smaller rivals.
Indie brands were quicker to respond to shifting trends and better equipped to leverage e-commerce platforms.
Medicube is APR's best-selling cosmetics brand (Screenshot captured from APR's website) YET TO RECOVER TO PREVIOUS PEAKS
Still, APR's revenue remains less than one-third of LG H&H's, amounting to 723 billion won in 2024. However, its sales have been on an upward streak since 2017, the earliest year for which its financial statements are available.
By contrast, LG H&H and AmorePacific have yet to recover to their peaks reached in 2021.
In 2024, sales at LG H&H have dropped 35.8% to 2.85 trillion won, compared to three years earlier, while operating profit plunged 83% 146.5 billion won.
Its share price has plummeted 80% to 327,000 won on July 25, versus 1.6 million won in December 2020.
Sales at AmorePacific have declined 20.1% to 3.89 trillion won in 2024, compared to three years before. Its operating profit has contracted 36% to 220.5 billion won during the same period.
AmorePacific's share price has slid to 133,900 won from 200,000 won in December 2020.
By comparison, shares in APR closed at 171,700 won on July 25, slightly off their record-high of 183,300 won touched on July 18.
Retail outlets of LG H&H's cosmetic brands SLOW TO ADAPT TO CHANGE
In the past, mass production systems and extensive offline distribution channels enhanced production and sales efficiency.
However, this structure requires significantly higher initial output for new products, often several tens of thousands of units, compared to the more flexible approach by smaller rivals.
APR and other indie brands, which outsource manufacturing to contract manufacturers like Cosmax Inc. and Kolmar Holdings Co. launch new products in smaller volumes. This allows them to react swiftly to trend shifts driven by social media platforms TikTok and Instagram Reels.
“Most large business groups can't easily discontinue outdated products because of the significant initial investment costs,” said an official at a domestic cosmetics original development and design manufacturer. “That puts them behind small brands that can swiftly shift to new products to respond to changing trends.”
STUCK IN GLORY DAYS
It also seems that they have not moved on from their glory days.
During the early and mid-2010s, AmorePacific and LG H&H grew largely thanks to premium brands like Sulwhasoo and The Whoo. Chinese daigou, or resellers, snatched them up at duty free stores and other offline channels.
However, Chinese consumers’ shift toward homegrown brands and the popularity of affordable brands on online platforms in the US have changed the cosmetics industry landscape in South Korea.
“AmorePacific and LG H&H, which relied heavily on China, should have turned to new markets such as the US, Japan and Southeast Asia. But they were slow in doing so,” said Park Jong-dae, a Meritz Securities analyst.
"Their focus on offline channels held them back just as the online market was rapidly growing in the US, the world’s largest cosmetics market," he pointed out.
A collection of House of Hur's makeup products (Screenshot captured from House of Hur's website) Korean indie makeup brands have made inroads into Amazon and other global e-commerce platforms. They were ranked high among top-selling items during Amazon’s biggest summer sale event this year, Prime Day.
APR's Medicube topped the 2025 Prime Day top 10 best-selling beauty brands list during the event held from July 8-11.
SLUGGISH M&A ACTIVITY
They also lagged behind smaller peers in the M&A market.
AmorePacific and LG H&G each acquired one domestic makeup brand over the past three years. AmorePacific took over Cosrxinc, while LG H&H acquired Hince.
By comparison, Goodai Global Inc., a Korean beauty unicorn, has scooped up four indie beauty companies, including Beauty of Joseon, TIRTIR and House of Hur, since 2019. It is also slated to acquire two more Korean cosmetics makers later this year.
In 2024, Goodai raked in 935.4 billion won in sales, surpassing APR's 723 billion won.
In 2025, Goodai's sales are forecast to nearly double to 1.7 trillion won following the series of M&As.
