LG H&H is #13 on this year's list of Top Global Beauty Companies.
Below is a look at the company's 2022 highlights, recent acquisitions, best-selling brands and latest innovations.
Corporate Sales:
$6.8 billion
Beauty Sales:
$4.8 billion
Key Personnel:
- Suk Cha, CEO
- Hong-Gi Kim, CFO, director
- Young-Soo Kwon, COO of the Holding Company
Major Products/Brands:
Cosmetics, hair care and skincare including The History of Whoo, O Hui, SU:M37, Belif, Beyond, Dermalift, CNP, CNP Rx, VDL, Isa Knox, Sooryehan, Code Glokolor, Vonin, Carezone, The Saga of Xiu, Nature Collection, TheFaceShop, FMGT, Dr. Belmeur, Yehwadam, Elastine, Organist, Reen, Silk Therapy, Veilment, Gentology.
New Products:
The Créme Shop (acquisition), Freshian vegan cosmetics.
Financial Summary:
In fiscal 2021, despite uncertainties surrounding economic recovery due to continued emergence of new Covid variants and an unstable business environment, LG H&H sales, operating profit, and net profit set record highs surpassing pre-Covid levels. The company reported $6.8 billion in sales, up 3.1% year over year.
Beauty business sales decreased 0.4% YOY to $3.7 billion. Luxury brands continued solid performance supported by strong brand power. In China, the company’s customer base widened due to active expansion into new channels other than Tmall, JD or VIP. Meanwhile, the ‘Whoo’ brand reinforced its ultra-high-end lineup with new products to further strengthen its luxury positioning in the global beauty market.
HDB business sales—which include hair care, oral care, skincare, aromatics and more—increased 9.9% YOY to $1.8 billion. Premium brands of strategically grown Daily Beauty, such as ‘Rien Dr. Groot’, ‘Bamboo Salt Himalaya Pink Salt’ and ‘Physiogel’ led the growth of the business. As ESG became a mega-trend for companies, environmental concerns were factored into the product development stage and led to the launch of paper-packaged shampoo bars and powder toothpaste.
2021/2022 Highlights:
In September 2021, LG Household & Healthcare purchased a 56% stake in Boinca, a California-based vegan hair dye manufacturer, for $100 million. Boinca owns high-end hair color dye brand Arctic Fox, which is popular among young customers thanks to its successful social media marketing and its opposition to animal testing. The purchase is intended to boost LG’s overseas hair care business and strengthen its competitiveness in the premium hair care product market.
For the first quarter of 2022, sales decreased 19.2% year-over-year. Beauty struggled to grow due to unfavorable influence from China. After the political, social and economic controls for the preparations for the Olympics in January and February, China’s economy faced the worst downward pressure in years due to the Zero-Covid policy which began in March. As a result, sales and profits of luxury cosmetics fell dramatically as the China onshore business and travel retail channels were affected. The market contraction due to the strengthened lockdown measures in China is still continuing.
In order to respond to the rapidly changing consumer needs in a difficult market environment, major luxury brands such as ‘Whoo,' ‘Sum,’ ‘O HUI,’ ‘belif’ and ‘CNP’ continued to launch new products in early 2022.
In March 2022, the company acquired a majority stake in Los Angeles-based beauty brand The Crème Shop—known for its whimsical and vibrant skincare, makeup, and beauty accessories that appeal to a diverse group of consumers and possess a strong following among Gen Z and Millennials. By claiming a majority stake in The Crème Shop, LG H&H plans to further expand in the beauty and personal care industry and solidify its presence in the North American market while growing The Crème Shop into a global brand.
In May 2022, LG H&H opened a new research and development (R&D) center in Hokkaido, Japan, focusing on microbiome beauty products. The company said Hokkaido provides the optimal environment for conducting research on useful strains of microbiomes and is equipped with infrastructure for advanced research and production of base ingredients for related products. The company said it plans to establish a natural fermentation production system and develop various microbiome ingredients at the new center.
In July 2022, LG H&H signed a Memorandum of Understanding (MoU) with Shopee, a leading e-commerce online shopping platform in Southeast Asia and Taiwan, to accelerate its growth in the premium beauty and personal care categories in five key markets comprising Singapore, Malaysia, Vietnam, Thailand and Taiwan. The partnership will be led by Sean Lee, head of the overseas business division at LG H&H and Chris Feng, group president at Sea. Both companies will also work together and bring more brands under LG H&H onto Shopee, and identify new collaboration opportunities in areas such as marketing and exclusive product launches.
Looking Ahead:
In Q2 2022, LG H&H reported 1.9 tr won in sales, a decline of 7.9% year over year, however compared with the difficulty of Q1, 2Q sales increased 13.2% quarter-over-quarter, largely due to the growth of Beauty which grew 21.9% qoq in sales.
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