Even Major Cosmetics Companies Surpassed... CJ Olive Young Approaches the '4 Trillion Won Club' in Sales

Last Year’s Sales 3.8612 Trillion KRW, Up 40% Year-on-Year
Major Corporations AmorePacific and LG Household & Health Care Show ‘Overwhelming’ Performance

CJ Olive Young's sales last year approached 4 trillion won.

According to the business report submitted by CJ to the Financial Supervisory Service's electronic disclosure system on the 21st, CJ Olive Young's sales amounted to 3.8612 trillion won, a 40% increase compared to 2.7775 trillion won in 2022. Olive Young, which recorded sales close to 3 trillion won in 2022, earned more than 1 trillion won in just over a year, achieving sales close to 4 trillion won. Net profit for the period was 347.3 billion won, an increase of 140 billion won compared to 208 billion won in 2022.

CJ Olive Young operating in downtown Seoul. Photo by Jinhyung Kang aymsdream@

CJ Olive Young's presence in the beauty industry has also expanded. Last year, Olive Young's market share was estimated at 15% of the total beauty market (25.1411 trillion won). The market share, which was only 10% in 2020, rose by 5 percentage points (p) in just over three years. Narrowing down to the H&B (Health & Beauty) market, Olive Young's share exceeds 90%.

Recently, the global beauty select shop 'Sephora' of the luxury brand group Louis Vuitton Mo?t Hennessy (LVMH) announced its withdrawal from the Korean market. The scheduled date is May 6. With Sephora's exit, Olive Young's main competitor in the market will be Shinsegae's Chicor (with 23 stores). As of the end of last year, Olive Young had 1,338 stores (1,112 directly operated stores and 226 franchise stores).

Olive Young also surpassed the performance of major cosmetics companies. Last year, Amorepacific recorded sales of 3.674 trillion won and operating profit of 108.2 billion won, showing a performance lagging behind Olive Young. LG Household & Health Care's cosmetics and home care sales, excluding the beverage business, were in the 5 trillion won range, but operating profit was 271.8 billion won, indicating Olive Young's dominance in profitability.

The main driver behind CJ Olive Young's significant sales increase last year was 'foreigners.' Olive Young opened 'Olive Young Myeongdong Town' in Myeongdong, a representative foreign tourist commercial area, offering stores specialized for foreign customers. With the increase in individual travelers from Southeast Asia, Japan, and English-speaking countries, 'Olive Young shopping' has become an essential tourist course. Foreign sales in the Myeongdong commercial area reportedly grew by more than 800% compared to the previous year, and as of January this year, the number of foreigners visiting Olive Young Myeongdong Town is estimated at 2,000 per day on average.

As foreigners' interest in Olive Young grows, the global online mall is also doing well. Olive Young launched its global mall in June 2019, allowing customers in over 150 countries to purchase cosmetics from domestic companies. As of last year, the number of products handled exceeded 15,000, and the number of members is said to be close to 1 million. From 2020 to 2022, the global mall's average annual growth rate in transaction volume was about 84%. A CJ Olive Young official stated, "We are accelerating our strategy as an omni-channel platform domestically," adding, "We are promoting expansion as a K-beauty platform including overseas markets."

Based on these strong performances, CJ Olive Young's corporate value is also rising. In 2021, during the pre-IPO, Olive Young received a corporate valuation of 1.8 trillion won from Glenwood PE. Currently, the corporate value estimated by the securities industry exceeds 5 trillion won. Researcher Lee Haeni of Eugene Investment & Securities said, "As a monopolistic company in the H&B market and a leader in the beauty market, the corporate value is estimated at 5.5 trillion won," adding, "In addition to stable domestic operations, expectations for future overseas expansion are factors that can further increase corporate value."

Meanwhile, Olive Young is an unlisted subsidiary in which CJ holds a 51.4% stake. The shareholding ratio is followed by Lee Seonho, Head of Food Growth Promotion at CJ CheilJedang (11%), Lee Jaehwan (4.6%), and Lee Kyunghoo (4.2%).