The encyclopedia · Strategy & Leadership · Strategic decision · 2008–2022
The Face Shop closed all 360 China stores and deregistered 39 subsidiaries
LG H&H's K-beauty peaked at 360 China stores — then THAAD, counterfeits, and C-beauty erased every one.
LG Household & Health Care · 2022-12
What happened
The Face Shop entered China in 2008 as LG Household & Health Care's flagship K-beauty road-shop brand, opening its first store in Beijing. It rode the Korean Wave to rapid expansion, opening over 100 stores in 2015 alone and reaching a peak of approximately 360 stores nationwide. The brand's affordable, nature-themed cosmetics made it one of the most visible Korean beauty brands in Chinese shopping malls.
The decline began in 2016 with two converging crises. The THAAD missile defense deployment triggered a Chinese consumer boycott of Korean brands that sharply reduced foot traffic and sales. Counterfeit products bearing The Face Shop's name proliferated on Chinese e-commerce platforms, diluting the brand and undermining consumer trust. Chinese domestic beauty brands were simultaneously gaining ground with faster product cycles and digital-native marketing.
By 2018, The Face Shop had closed all offline stores in China, though its products continued to be sold through online channels. On December 30, 2022, the brand's China operating company — The Face Shop (Shanghai) Cosmetics Sales Co., Ltd. — changed its business registration status from 'active' to 'cancelled' due to a company merger. All 39 related sales companies across China were also deregistered, marking the complete end of The Face Shop's physical retail presence in China.
Why it happened
- The 2016 THAAD diplomatic row triggered a consumer boycott of Korean brands that slashed foot traffic and sales.
- Counterfeit products bearing The Face Shop name proliferated online, diluting brand trust and confusing consumers.
- Chinese domestic beauty brands captured the mid-market with faster product cycles and digital-native marketing.
- LG H&H eventually reconsidered its entire cosmetics franchise model, withdrawing from the road-shop format.
The lesson
A brand that enters a foreign market through franchised stores does not own its distribution — it rents it. When the political climate turns, the landlord does not cut the rent.
Aftermath
The Face Shop continued to operate in Korea and other markets but never returned to China's physical retail. LG H&H pivoted its China strategy toward premium brands like Whoos and luxury channels, effectively conceding the mass market to C-beauty competitors. The Face Shop's China exit became a defining case of how quickly K-beauty's hard-won shelf space could vanish.
Sources
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