[SEOUL=Health/Medical News] How much money does a cosmetic company invest into research and development in a year?
Korea Health Industry Development Institute has recently divulged the size of of R&D cost of medicine, medical appliances, and cosmetic industry through the report on 'Status Analysis on domestic health industry manufacturers research and development and research personnel'.
According to the report, R&D cost for year 2011 for cosmetic industry was 273.7 billion won, lower than pharmaceutical products(980.3 billion won) and medical appliance(317.8 billion won).
As an example, the total sales of Amore Pacific, No.1 domestic cosmetics manufacturer reached 2.5547 trillion won. But R&D cost was no more than 73.4 billion won, occupying 2.87% of the total sales. (refer to Financial Supervisory Service announcement)
No.2 domestic producer LG Household & Healthcare does not seem to be interested in R&D. The total sales of the company for year 2011 was 3.4524 trillion won while R&D cost versus total sales was no more than 54.7 biillion won(1.58%). For reference, the reason why the total sales of LG Household & Healthcare for year 2011 was higher than that of Amore Pacific was that LG Household & Healthcare had merged the Faceshop, which was a temporary phenomenon.
It forms a sharp contrast with the situation in which domestic phamaceutical companies with more than 900 billion and 600 billion yearly sales are focusing on investing more than 100 billion won for R&D and developing new drugs, acquring the propellent force for growth.
There was more investment of R&D cost into the modification or process betterment of established products than the development of new drugs in the cosmetic industry. The R&D ratio for cosmetics makers for the modification or process betterment of established products was 37.8%, higher than pharmaceutical products(25.8%) and medical appliances(29.2%). It can be explained that me-too product competition between brand holders exerted a certain degree of influence.
The concentration ratio for itw own R&D(3.72%) was also lower than other industries such as medical appliances(9.24%) and pharmaceutical products(6.15%).
This is why domestic cosmetic industry is facing the criticsm that it cannot develop any single innovative product, apart from generating national revenue through export.
-대한민국 의학전문지 헬스코리아뉴스-
