Skinfood was a popular Korean skincare and cosmetics brand that was founded in 1957. The brand was known for using food-inspired ingredients in its skincare products, with the philosophy that healthy skin starts with healthy food. Skinfood products combined natural ingredients like fruits, vegetables, and grains with skincare technology to create fun and effective skincare. Some of Skinfood’s most popular products included the Black Sugar Mask, Egg White Pore Foam, Strawberry Black Sugar Mask, and Rice Mask.
The Rise of Skinfood
Skinfood rose to popularity internationally in the late 2000s and early 2010s, as the Korean skincare trend known as “K-Beauty” started gaining worldwide attention. Skinfood opened stores in several countries around the world, including the United States, Canada, Thailand, Hong Kong, and more. The brand’s natural ingredients, cute packaging, and affordable prices made it a hit with customers looking to try Korean skincare. Skinfood was considered one of the “gateway” brands that introduced people to K-Beauty.
Challenges and Decline
However, after several years of success, Skinfood began facing some challenges. Increased competition from both international and domestic Korean skincare brands started eating into Skinfood’s market share. Other K-Beauty brands were seen as more innovative and luxurious, while Western brands were still considered more prestigious in some markets.
Skinfood was also impacted by some controversies, including accusations of false advertising and quality issues in some products. In 2018, Skinfood was called out for claiming some products were “hypoallergenic” and suitable for sensitive skin when this was not substantiated.
Internally, Skinfood was dealing with management and financial issues. The founding family was going through business and inheritance conflicts, resulting in uncertain leadership. Sales were stagnating and profits were falling year after year. Skinfood was losing its competitive edge and market position.
The Amorepacific Takeover
In June 2018, South Korean conglomerate Amorepacific Corporation announced that it would acquire Skinfood from its parent company, Ilhwa. Amorepacific paid approximately $57 million for an estimated 60% stake in Skinfood.
Amorepacific is South Korea’s largest cosmetics company and owns other popular K-Beauty brands like Innisfree, Etude House, and Laneige. The acquistion was seen as a strategic move to consolidate Amorepacific’s position in the domestic Korean market against foreign competitors.
Under Amorepacific, Skinfood underwent a brand repositioning and reformulation of its products. Amorepacific aimed to leverage its resources and expertise to revive Skinfood and address issues like product quality. However, the efforts do not appear to have led to a notable turnaround for the brand.
Store Closures and Brand Decline
In 2019, just a year after the Amorepacific acquisition, Skinfood USA announced that it would be exiting the US market and closing all of its American stores. The official statement cited the brand’s “strategic decision to concentrate on the domestic Korean market.”
Skinfood stores in other international markets like Hong Kong, Thailand, and Taiwan soon followed suit and closed down. After over a decade of international expansion, Skinfood was retreating from global markets to focus on Korea. However, even on its home turf, trouble was brewing.
By 2021, Skinfood was shutting down the majority of its stores and counters within South Korea. Once with over 300 locations in Korea, Skinfood now has less than 10 physical retail stores operating. Its products have also disappeared from many domestic department stores where the brand previously had a strong presence.
Reasons for Skinfood’s Decline
Skinfood’s fall from grace can be attributed to a mix of external market factors and internal mismanagement:
Increased Competition
The K-Beauty market became significantly more competitive during Skinfood’s decline. Domestic brands like Innisfree, Etude House, and The Face Shop outpaced Skinfood with more innovative products, memorable branding, and creative marketing campaigns. International giants like L’Oreal and Estee Lauder also expanded aggressively in Asia.
Loss of Brand Identity
As competition grew, Skinfood was slow to differentiate itself. It did not keep up with the level of product development as rivals released new ingredient trends and technology. By sticking to its food-based natural ingredients, Skinfood lost brand awareness as consumers gravitated to ingredients like snail mucin or cica that were not part of Skinfood’s brand identity.
QA and Advertising Issues
The controversies over false advertising and product issues caused lasting damage to Skinfood’s brand reputation. Breaking consumer trust is difficult to recover from in the beauty industry.
Supply Chain and Inventory Management
Reports indicate that Skinfood struggled with inventory management, leading to shortages of popular items and an oversupply of stagnating products. This led to discounts and clearance sales that degraded the brand image.
Leadership Instability
The conflict over ownership and inheritance among the founding family resulted in unclear leadership direction. The new managers under Amorepacific were unable to quickly turnaround the situation.
Failure to Respond to Market Shifts
Skinfood did not adapt effectively to market changes like the growth of online shopping and digital marketing in Korea. It remained heavily dependent on brick-and-mortar stores without developing a strong e-commerce presence.
Saturated Sales Channels
Skinfood’s extensive store network and retail distribution worked against it when sales slowed. The high fixed costs of rent and inventory became detrimental instead of an advantage.
Is Skinfood Going Bankrupt?
Skinfood is not officially bankrupt or defunct yet. However, with the brand’s severe decline over the past few years, it appears to be a real possibility in the near future.
Skinfood is no longer a registered trademark in some markets like Singapore and Canada. In 2021, its parent company Ilhwa reported a $33 million operating loss.
Amorepacific seems to have given up on turning Skinfood around and is letting the brand fade away through store closures rather than spending resources on reviving it. Industry analysts think Amorepacific will eventually dissolve Skinfood as a brand and simply absorb any valuable assets into its portfolio.
What Does This Mean for K-Beauty?
Skinfood’s fall is symbolic of how competitive and rapidly changing the Korean beauty industry is today. The early K-Beauty pioneers who introduced the industry to the world are now being challenged by newer brands with fresh ideas.
For K-Beauty startups, the lessons are to build brand loyalty through quality and innovation rather than cheap products, monitor inventory diligently, and develop an omnichannel presence. Standing out requires more than just “natural” or “food-based” claims.
For consumers, it shows that a brand’s initial popularity does not guarantee longevity at the top. The nostalgia for Skinfood remains, but sentiment can rarely rescue a flailing brand.
Ultimately, Skinfood’s decline reflects the maturation of the K-Beauty sector. The industry is evolving beyond its plucky upstart phase into one with international standards for branding, R&D, and customer experience.
Could Skinfood Make a Comeback?
Given how rapidly Skinfood is exiting markets and closing stores, a comeback seems unlikely but not impossible.
For a Skinfood revival, a few things would need to happen:
New Leadership and Capital Investment
Fresh leadership and strategic direction, likely from a new owner, would be required to guide a Skinfood turnaround. Significant capital investment would also be needed to fund R&D, marketing, and expansion into new sales channels.
Innovative Product Development
Skinfood would need to breathe new life into its product line-up with better formulations, on-trend natural ingredients, and technology like biotech and K-beauty ferments. Packaging and brand imaging would also need an update to feel modern and luxurious.
Rebuild Brand Reputation and Trust
Extensive PR and marketing efforts, perhaps led by a celebrity brand ambassador, would be important in order to regain consumer confidence in Skinfood. The brand would need to convince customers that quality issues are in the past.
Omnichannel Sales and Distribution
Instead of relying on physical stores, Skinfood should have an e-commerce enabled website, social media presence, and distribution through large e-tailers. This omnichannel approach would help reach new and old fans of the brand.
Focus on Domestic Korean Market First
Targeting the growing Korean market would be a smarter initial move rather than attempting to immediately restart international expansion. Skinfood needs to re-establish itself on its home turf first.
The Future of K-Beauty
While the outlook for Skinfood is grim, the future remains bright for the Korean beauty industry overall. According to market research firm Statista, the global K-Beauty market is projected to grow from $10.7 billion in 2018 to over $21.8 billion by 2026.
South Korea’s expertise in skincare innovation and ability to rapidly commercialize new ingredient trends will continue to drive overseas demand. The intersection of scientific research and traditional Korean beauty values is a powerful combination.
Furthermore, the Hallyu Wave of Korean pop culture has dramatically boosted the appeal of Korean cosmetics brands among Millennials and Gen Z worldwide. As K-pop, K-dramas and Korean media content gain more global fans, interest in trying Korean beauty products follows.
The pandemic has also accelerated consumer interest in self-care, skin health, and multi-step skincare routines. This plays directly into the strengths of K-Beauty products and rituals.
While early trailblazers like Skinfood fade away, the industry they helped build continues moving ahead. The future success stories of K-Beauty are yet to be written.
Conclusion
Skinfood was once a pioneer of bringing Korean beauty trends to the global stage. However, the brand failed to adapt and evolve in a rapidly changing industry. Increased competition, supply chain issues, advertising controversies, and ineffective leadership led to Skinfood’s decline over the past decade.
The brand has shut down nearly all of its international and domestic Korean stores. Skinfood will likely be dissolved or have its assets absorbed into parent company Amorepacific. While a comeback can’t be ruled out, it seems unlikely without major changes and investment.
Skinfood’s fall reflects the maturing of the K-Beauty industry. For consumers, it shows that brand loyalty is fleeting if quality and innovation is not delivered consistently. For the industry, it represents the hyper-competitive nature of Korean skincare where constant R&D and reinvention is required.
Despite Skinfood’s challenges, the future of K-Beauty overall remains very strong. Backed by Korean pop culture and demand for natural ingredients, K-Beauty is projected to continue on a global growth trajectory over the next decade. Skinfood may fade away, but K-Beauty momentum is unstoppable.
