Tonymoly moves into dermocosmetics space with Tai Guk Pharm acquisition

The acquisition deal​

Following the $12.4 mn (€10.5 mn) purchase, Tonymoly now has a 47.6% stake in Tai Guk Pharm, making it the pharmaceutical producer company's largest stakeholder.  

Reports from the Korean Biomedical Review reveal that Tonymoly is expected to leave the management and daily operations in the hands of Tai Guk Pharm.

Making a dermocosmetics play​

The acquisition will now see Tonymoly enter into the functional cosmetics arena. By combining its cosmetics manufacturing technology with Tai Guk Pharm’s medicine making abilities, Tonymoly hopes to sell its dermocosmetics product in pharmacies.

This will complement Tai Guk Pharm’s existing range of personal care ointments, creams and gels.

Production capabilities​

Tai Guk Pharm, which first entered the pharmaceutical and health food market in 1957, has two major production plants located in located in Hyangnam, Gyeonggi Province, and in Buyeo, South Chungcheong Province, South Korea.

With 300 products in its manufacturing portfolio, it is thought to produce 17 million skin solvent items per year that have a total of 80 external applications.

Long-term strategy​

In November 2016, Tonymoly announced its plans to invest ​23 bn won (€19.1 mn) in a manufacturing plant in Zhejiang Province, China.​

Cosmetics Design Asia first reported in May 2017 how Tonymoly strives to double its sales and “continue to expand [its] research and development to introduce a number of best-selling beauty products and boost customer satisfaction,”​ stated Bae Hae-dong, the now CEO, of Tonymoly.

The brand announced its business objective is to reach 2 tn won sales (​€1.5 bn) by 2025​. Its bid to create innovative skin care formulations at its Chinese facility that attract the wider Asia-Pacific (APAC) audience, along with its new dermocosmetics partnership, contribute to Tonymoly's ambitious growth strategy.

The dermocosmetics industry is witnessing considerable growth as pharma-inspired brands are having a significant impact on skin care brands, Euromonitor International reveals. APAC and Korean brands have a different narrative, however, as natural formulations lead consumer preferences for skin care product purchasing. Traditional remedies that reflect individual cultures within APAC have the potential to create industry-leading brands in the dermocosmetics sphere.