[Infostock Daily= Reporter Park Hyo-sun] It has been pointed out that AmorePacific's aggressive expansion of its online distribution network has directly hit existing franchises such as Innisfree.
According to an information disclosure document on AmorePacific's cosmetics franchise brand 'Innisfree' submitted by the Fair Trade Commission to Rep. Yoo Eui-dong of the People Power Party(Gyeonggi Pyeongtaek Eul), AmorePacific supplied products handled by Innisfree franchises to 27 online distribution networks last year and is supplying products to 54 online distribution networks this year, twice as many as last year.
In addition to the online distribution network, AmorePacific is also supplying products to stores such as marts and department stores in the franchise sales area.
Looking at this year's information disclosure, AmorePacific is supplying products handled by Innisfree franchises to 263 stores, including E-Mart, Lotte Department Store, HDC Shilla Yongsan Duty Free.
As AmorePacific's franchise headquarters supplied products to other stores in online distribution and franchise sales areas other than existing stores, the average sales of existing franchises decreased by 27%(upper limit) to 35%(lower limit) from 2017 to last year.
In addition, 103 Innisfree franchises, which peaked at 765 at the end of 2017, terminated their contracts last year. Since then, there have been no new franchises opened.
Rep. Yoo Eui-dong urged the FTC to "Establish clear principles and a new order between franchises and the online market as the competent department of the Franchise Business Act".
Meanwhile, Yoo asked a parliamentary audit of the National Assembly's National Policy Committee for Seo Kyung-bae, chairman of AmorePacific, as a witness, pointing out the issue of expanding the online distribution network of the cosmetics franchise industry. Chairman Seo Kyung-bae is scheduled to attend the general parliamentary inspection of the National Policy Committee on the afternoon of the 22nd.
Reporter Park Hyo-sun hs1351@infostock.co.kr
