Kwangdong Pharmaceutical has regained the distribution rights for ‘Jeju Samdasoo’, the number one bottled water brand in Korea. Kwangdong Pharmaceutical, which has been responsible for the consignment sales of Samdasoo since 2013, will continue sales for another four years until 2029, maintaining a core source of revenue that accounts for one-third of its total sales.
According to the industry on the 30th, Kwangdong Pharmaceutical was selected as the preferred negotiator in the bidding for the Samdasoo distribution rights conducted by the Jeju Special Self-Governing Province Development Corporation. The contract period is a total of four years from next year until 2029.
Kwangdong Pharmaceutical is assessed to be recognized for its distribution experience and stable operational performance of Samdasoo. The distribution rights for Samdasoo, which had been monopolized by Nongshim until 2012, have been operated by Kwangdong Pharmaceutical since 2013. Since 2021, Kwangdong Pharmaceutical has also integrated the non-retail distribution that LG H&H had managed, taking sole charge of the overall distribution of Samdasoo.
By extending the distribution rights, Kwangdong Pharmaceutical has successfully defended its performance while preserving a major source of revenue. Of the individual sales of 974.8 billion won last year, sales from Samdasoo accounted for 319.6 billion won, or about 33%. Losing the rights to Samdasoo would have posed a risk of losing one-third of its revenue.
In this bidding for the Samdasoo distribution rights, a total of 11 companies, including Kwangdong Pharmaceutical, participated in fierce competition. Pharmaceutical companies including Dongwha Pharm, as well as major food companies like Pulmuone, Binggrae, and Woongjin submitted bids. Notably, Pulmuone, which owns a bottled water brand, and Dongwha Pharm, which aimed to expand its distribution, were considered strong competitors.
The interest of corporations in Samdasoo is due to its overwhelming market share in the Korean bottled water market. Samdasoo is a leading brand with over 40% market share in the domestic bottled water industry. According to the market research firm Euromonitor, the size of the domestic bottled water market last year was 3.1761 trillion won, which has grown more than fivefold compared to ten years ago.
The scale of this bidding has also increased. It is estimated to have expanded from the existing level of around 300 billion won to 400 billion won. Notably, the nationwide online and offline distribution rights, excluding some large supermarkets and within Jeju Island, are all included, raising the level of competition.