Kwangdong Pharmaceutical, which had monopolized more than 80% of the domestic Uwhangcheongsimwon market, is suffering from a double whammy. In the domestic market, it lost its top spot to the mid-sized pharmaceutical company Ixus Pharmaceutical, and abroad, counterfeit products are rampant, yet it has not been able to respond adequately.
According to the industry on the 23rd, the top seller in the domestic Uwhangcheongsimwon market last year, in terms of sales volume, was 4,196,564 units of Ixus Pharmaceutical's 'Yongpyo Uwhangcheongsimwon', significantly surpassing Kwangdong Pharmaceutical's 4,077,570 units of 'Kwangdong Uwhangcheongsimwon'. For the first time since 2016, Kwangdong Pharmaceutical, which had been monopolizing the domestic market, has fallen from the top position. Although it maintained the top sales revenue due to high prices, that revenue has been showing a downward trend each year.
Uwhangcheongsimwon is a traditional medicine made from gallstones formed in the gallbladder or bile duct of cattle, said to reduce anxiety and promote calmness. In China, it appeared in medical texts from the 12th century during the Song Dynasty under the name Uwhangcheongshimwan, while in Korea, it is mentioned in medical texts such as EuiBangYooChwi and DongUiBoGam from the 15th to 16th century under the name Uwhangcheongsimwon.
Joseon Mu-Yak popularized Uwhangcheongsimwon in the domestic market by launching 'Solpyo Uwhangcheongsimwon' in the 1960s. Kwangdong Pharmaceutical introduced 'Geobukpyo Wonbang Uwhangcheongsimwon' in 1973. The late Choi Subu, the founder of Kwangdong Pharmaceutical, identified Uwhangcheongsimwon as a product that would drive the company’s growth. When Joseon Mu-Yak declared bankruptcy in 2016 due to management difficulties, Kwangdong Pharmaceutical acquired the Solpyo trademark for 3.7 billion won.
Kwangdong Pharmaceutical, which owned both the Solpyo and Geobukpyo brands that divided the market, was the undisputed number one in the Uwhangcheongsimwon market. It exported to the United States and Japan in 1991 and to Vietnam in 2012, establishing itself as a leading Uwhangcheongsimwon product abroad. The sales of Kwangdong Uwhangcheongsimwon grew each year, reaching 30.2 billion won in 2020, 33.9 billion won in 2021, 39 billion won in 2022, and 39.5 billion won in 2023.
However, last year's sales dropped significantly to 29.3 billion won, leading to a crisis. Its domestic market share fell from 79% in 2022 to 59% last year. In contrast, Ixus Pharmaceutical aggressively pursued Kwangdong Pharmaceutical through advertising campaigns featuring actor Hwang Jung-min, assertive distribution strategies, and competitive pricing, ultimately claiming the top position in sales volume last year. Consequently, the sales of Ixus Pharmaceutical's Uwhangcheongsimwon surged from 9 billion won in 2023 to 14.6 billion won in 2024.
The situation abroad is even more serious. Since the early 2020s, counterfeit products using Kwangdong Pharmaceutical's brand name have spread in overseas markets. In particular, local companies in Southeast Asia, such as Vietnam and Myanmar, have distributed counterfeit products that imitate the Geobukpyo brand and packaging design.
In fact, in June last year, the Korea Agro-Fisheries & Food Trade Corporation (aT) directly uncovered illegal factories in Southeast Asia where Uwhangcheongsimwon was being produced. The site revealed organized counterfeiting crimes, with product manuals, fake tablets and compressors, packaging boxes, and product automatic packaging machines discovered.
Industry insiders point out that Kwangdong Pharmaceutical has not demonstrated the management capabilities that match its increased brand awareness abroad.
An industry insider noted, "For a popular brand, local distribution conditions need to be managed closely, but we have not been able to grasp this properly," adding, "We are not responding effectively and have left ourselves helpless." The Korea Agro-Fisheries & Food Trade Corporation advised that it is necessary to affix product stickers that can inform consumers about the product’s Korean origin and to develop measures for consumers to distinguish between genuine and counterfeit products.
Kwangdong Pharmaceutical has yet to find effective countermeasures. A company official stated, "We currently have a system in place that ensures only verified products can be distributed locally through a certification barcode," and added, "We will strengthen monitoring of local conditions."