LG Household & Health Care (LG H&H) has made a decisive move to overhaul its North American business. The South Korean consumer goods company has decided to divest the North American operations of Avon Products, the American cosmetics brand it acquired in 2019 for approximately $125m (around 170bn won). The sale is more than a routine asset disposal. It represents the deliberate abandonment of an antiquated direct-selling model in favour of a strategy built around retail channels and digital platforms.
How Avon became a liability
Avon was once a colossus: a door-to-door cosmetics empire operating in more than 100 countries with six million sales representatives worldwide. But from the 2010s onwards, the rise of e-commerce and specialist beauty retailers — Sephora and Ulta Beauty chief among them — gutted its North American business, pushing it into persistent losses.
Scepticism surrounded the acquisition from the outset. The structural decline of direct selling as a distribution model, the ageing of the Avon brand, and its estrangement from younger consumers were already painfully apparent. Those concerns proved well founded. After the takeover, the North American division failed to post any meaningful improvement in results, becoming a consistent drag on LG H&H's overall profitability. Annual reports showed years of operating losses or negligible returns from the region, and analysts had long warned of the risk of an impairment charge on the asset.
The death of door-to-door in America
Avon's troubles are not unique to LG H&H — they are symptomatic of a broader collapse of direct selling in the United States. According to the Direct Selling Association (DSA), the American direct-sales market peaked at roughly $36bn in 2016 and has stagnated or contracted since. Natura & Co, Avon's global parent company, is restructuring the entire brand; Mary Kay is accelerating its own digital pivot. Industry observers are in broad agreement: the direct-selling model is fundamentally incompatible with digitally native consumers.
"American consumers — particularly millennials and Gen Z — discover products on social media, check reviews, and then buy immediately online or in a speciality store," said one distribution industry analyst. "A stranger turning up at your door to sell you face cream is culturally anachronistic."
LG H&H's new North American blueprint
With Avon offloaded, LG H&H's strategic direction is unambiguous: place its premium K-beauty brands directly into America's mainstream retail and digital channels.
The company already holds a strong hand in premium skincare. Its portfolio includes The History of Whoo, Su:m37°, and OHUI — luxury and premium lines that have demonstrated genuine market appeal. The History of Whoo in particular has generated hundreds of billions of won in annual revenue in China, establishing credible premium positioning for K-beauty. The challenge now is to secure shelf space and digital presence in the channels that matter in America: Sephora, Ulta Beauty, and Amazon.
A parallel digital push will focus on TikTok Shop livestreaming, influencer marketing, and direct-to-consumer platforms. The rapid ascent of several brands through TikTok-driven viral moments in the American beauty market has provided an instructive playbook for K-beauty companies willing to invest in social commerce.
The limits of acquisition-led growth
The Avon divestiture also represents a broader reckoning with LG H&H's overseas acquisition strategy. In the late 2010s, the company pursued aggressive international expansion, acquiring Japan's Ginza Stefany and New Zealand's Everlife alongside Avon. Most of these deals failed to generate the anticipated synergies, exposing the limits of growth-by-acquisition as a strategic model.
The same lesson is being absorbed across the global beauty industry. Coty has shed its direct-selling brands to concentrate on luxury and prestige. Estée Lauder has divested underperforming labels to sharpen its premium focus. The direction of travel in global beauty M&A has shifted decisively from scale-building to portfolio optimisation.
"The era of aggressive acquisitions in the 2010s is over," said one beauty industry analyst. "What matters now is which brands you sell, through which channels, and to which consumers."
The structural opportunity for K-beauty remains intact
The sale of Avon does not signal a retreat from North America. It should be read, rather, as clearing the decks for a more credible assault on the market.
The United States remains the world's largest single beauty market, valued at approximately $100bn in 2024. Within it, appetite for K-beauty has never been stronger. According to the market research firm Mintel, more than 40% of American millennial and Gen Z consumers have purchased K-beauty products or intend to do so. Concepts pioneered by the Korean beauty industry — elaborate skincare routines, cleansing oils, the "glass skin" aesthetic — have penetrated the American mainstream deeply.
Whether LG H&H can successfully shed a twentieth-century legacy asset and build a digital- and retail-first business in its place will ultimately depend on the strength of its brands and the rigour of its localisation. The age of door-to-door selling is over. The question now is whether LG H&H can convert K-beauty's cultural moment in America into hard commercial results.