Chairman Suh Kyung-bae of AmorePacific.

AmorePacific, a popular Korean cosmetics maker whose cosmetic products are in great demand in China, has delved into a new market: the manufacturing of cosmetics products that are sold at medical clinics or pharmacies as functional cosmetics. For AmorePacific, it is a blue ocean, the company said.

Its affiliate, Pacific Pharmaceutical Co., changed its name to Estra in 2013 and suspended the production of pharmaceutical products to focus on the production of both pharmaceuticals and cosmetics.

AmorePacific said Estra will make advances into overseas markets and plans to rank No. 1 in the pharmaceutical cosmetics market in Asia by 2020.

The affiliate of Korea’s largest cosmetics company decided to suspend its pharmaceutical business and turn to the production of medical cosmetics because the potential of the medical pharmaceutical market is considered wide open. It’s value is as much as 500 billion won, with France and Germany dominating the market. The market share of Korea’s cosmetics market in a global context is only 3 to 4 percent.

People with sensitive skins have been looking for Atopy treatments in increasing numbers. 

Chairman Suh Kyung-bae has been at the center of the change in Estra’s operations. The chairman has called for change since as early as 1992, when he was leading the pharmaceutical affiliate. He said the company should start producing cosmetics products that are good for women’s health. He set up the Medical Beauty Business Department within the company in 2011, saying that a new growth engine must be found in the medical beauty sector. He often remarked that a new business should be started in a functional area such as medical beauty, stressing the need for the development of new pharmaceutical cosmetics products. 

In tune with the chairman’s insistence, Pacific Pharmaceutical relaunched as Estra, a pharmaceutical cosmetics brand in 2013, which was followed by the introduction of three pharmaceutical cosmetics lines good for Korean women’s skin. They were developed through joint research with AmorePacific and Pacific Pharmaceutical.

In December 2013, Pacific Pharmaceutical sold its pharmaceutical business division to Handok Pharmaceutical and as a result, the company’s annual sales plummeted to 79.1 billion won from 125.4 billion won in the previous year, but the sale of cosmetic products expanded around 15 percent.

AmorePacific plans to make sure that its pharmaceutical cosmetics affiliate firm will take over the largest share of the cosmetics sold at hospitals in Asia by 2020 under the strategy, “Medical Beauty Asia Champion.” The company plans to develop more than four medical cosmetics products to lead the market, with each of those pharmaceutical cosmetics selling more than 10 billion won annually.

Officials of AmorePacific said the company changed its name to Estra to change its business to the medical cosmetics products production from pharmaceutical products. The new company is expected to go all out to explore the market for its products overseas, especially, in China, as it will develop new medical cosmetics products in tune with its operational target to be “Medical Beauty Asia Champion,” making this year the initial year for the strategic move.

A view of Sulwhasoo cosmetics products produced by AmorePacific. which have been selling well due mostly to the herb extraction mixed in their contents.(Photos:AmorePacific)