[Edaily Reporter Kim Jinsoo ] Amid an explosive surge in demand for extracellular matrix (ECM)-based products in the skin booster market, HANS BIOMED CORPORATION(042520)and L&C BIO(290650)—which currently dominate the domestic market—are ramping up distribution and sales through biotech companies with strengths in the aesthetics sector.

Through large-scale partnerships with biotech companies specializing in aesthetics, these companies are not only expanding distribution and sales but also maintaining a certain level of direct sales. With this two-track strategy, they expect to achieve three key benefits: market expansion, profit maximization, and maintaining market leadership.

Rapid Market Share Gain

According to HANS BIOMED CORPORATION on the 24th, domestic distribution and sales of the ECM skin booster “Celldiem” through Hugel, Inc. will begin in earnest next month. HANS BIOMED CORPORATION signed a domestic distribution agreement for Celldiem with Hugel, Inc. last April.

Since the launch of Cellerdiem, HANS BIOMED CORPORATION has been handling distribution and sales through its subsidiary, Mint Medical. Mint Medical has been leveraging the network of dermatology and plastic surgery clinics it built through sales of its thread lifting product, “MintLift.” Hugel, Inc. aims to create synergy by linking “Cellrdiem” with its sales network—established through products such as botulinum toxin and hyaluronic acid (HA) fillers—while HANS BIOMED CORPORATION plans to rapidly increase sales volume by utilizing Hugel, Inc.’s distribution channels.

Previously, L&C BIO also partnered with Humedix Co., Ltd. to continue the joint distribution and sales of the ECM skin booster “Rituo.” HANS BIOMED CORPORATION plans to maintain the proportion of direct sales for Celldiem at 60%. L&C BIO has raised the proportion of direct sales for Rituo from around 30% to 40%.

The primary reason HANS BIOMED CORPORATION and L&C BIO are pursuing this two-track strategy for distribution and sales is to expand market share through rapid market penetration. Until now, HANS BIOMED CORPORATION and L&C BIO have primarily focused their sales and marketing efforts on relatively large hospitals for products such as skin grafts and bone grafts; however, for skin booster products, sales to smaller-scale clinics and medical offices are essential. Consequently, they had to establish new sales and distribution networks.

However, since Hugel, Inc. and Humedix Co., Ltd. have already established robust sales networks with numerous aesthetic clinics nationwide through products such as botulinum toxin and hyaluronic acid (HA) fillers, HANS BIOMED CORPORATION and L&C BIO can accelerate sales of their ECM Skin Booster products through partnerships with these companies without incurring any additional costs.

L&C BIO currently works with approximately 3,000 hospitals, and through its partnership with Humedix Co., Ltd., this number is expected to increase significantly to 5,000 by the end of this year. HANS BIOMED CORPORATION also plans to secure more than 2,000 partner hospitals by year-end, leveraging its collaboration with Hugel, Inc.

In particular, given the anticipated advertising regulations regarding ECM Skin Boosters, the role of partners with strong medical field networks, academic (KOL) marketing capabilities, and aesthetic brand power is expected to be crucial.

High Profitability of Direct Sales

Furthermore, direct sales offer the advantage of high profitability, which can significantly boost the operating profit margin. Distribution and sales through partners inevitably involve commissions, such as sharing a portion of the margin. With direct sales, the manufacturer retains the distribution margin directly without intermediaries, thereby increasing the operating profit margin. Conversely, outsourcing to partners allows for rapid growth in sales volume in exchange for sharing a portion of the margin.

When products are distributed through partner companies, the manufacturer inevitably must pay a certain percentage of distribution fees (margin) to those partners. This directly leads to a decline in the manufacturer’s operating profit margin. In contrast, under a direct sales structure where the manufacturer supplies products directly to hospitals, the entire distribution margin can be absorbed as operating profit.

In fact, L&C BIO’s operating profit margin, which stood at 8% in the fourth quarter of last year, surged to 20% in the first quarter of this year, when sales of Litouo began in earnest. In particular, if this is combined with improved contract terms with Humedix Co., Ltd., Litouo is projected to maintain a high-margin structure of around 50%. HANS BIOMED CORPORATION is also expected to see a full-scale turnaround in its performance as sales of Celdiem expand.

Negotiating Advantage and Securing On-the-Ground Feedback

The two-track strategy of direct sales and leveraging partner companies carries implications beyond mere market expansion and profitability. Maintaining direct sales is also a strategy to secure a negotiating advantage over partner companies in the long term.

If a manufacturer relies entirely on partners for distribution and sales, sales may surge initially as distribution channels are established, but in the long term, there is a risk of becoming at the mercy of those partners. This is because, depending on the situation, partners may make unreasonable demands, such as lowering supply prices. However, if a manufacturer handles a significant portion of sales directly, it can maintain the upper hand in future negotiations—such as those regarding supply price adjustments—and secure more favorable terms.

Furthermore, the feedback and insights into market needs gathered through direct sales serve as crucial data for product development and marketing strategy—another reason why companies continue to prioritize direct sales.

An industry insider stated, “The two-track strategy is highly significant because it allows for rapid market expansion through partners while maintaining a share of direct sales, and the impact on profitability is very limited.”