Domestic pharmaceutical companies are competing to jump into the cosmetics business, releasing one cosmeceutical product – functional cosmetics applied with drug-developing technology – after another, industry sources say.

Cosmeceuticals are a growing market globally, which will likely register the fastest growth in personal care industry in the next four to five years, according to Persistence Market Research.

The global cosmeceutical market is estimated to be 35 trillion won ($31 billion), while the domestic market size remains at 500 billion won. Despite the still small domestic market, Korean pharmaceutical companies are actively entering the market, lured by the high growth potential, the industry watchers say,

The cosmeceutical label applies to creams, lotions, sunscreens, and ointments to reduce the appearance of sun damage and pigmentation, soften fine lines and reduce wrinkle depth, and to diminish scarring while minimizing acne severity.

Korean pharmaceutical companies are jumping into the cosmetics market to meet consumers’ demands for cosmeceutical products more actively.

Dongkook Pharm동국제약, a market leader, launched its cosmetics brand called “Centellian 24” in 2014. One of the products that represent the brand is Madeca Cream, based on Dongkook’s big hit Madecassol as the main ingredient. It recorded the sale of 40 billion won after a year the company launched it April 2015, prompting other biotech companies to jump into the cosmeceutical market.

Yuhan Co유한양행, another leading pharmaceutical and chemical company, announced on May 1 that it would establish "Yuhan Phillia" -- beauty and fitness unit. The subsidiary said it plans to differentiate itself from traditional strategies and action by going beyond the provision of products and services toward building a healthy ecosystem of customers and producers.

“We will strive to become a leading company in the cosmeceutical field, too, by releasing products in earnest in the third quarter,” a company official said. “Building up brand competitiveness in the beauty and health field is our goal.”

Dongkoo Bio & Pharma Co. also launched a cosmeceutical brand called Cell-Bloom late last year, with their tagline advertising it is the country’s No. 1 pharmaceutical company of the most commonly prescribed dermatology drugs. The most popular product is their “2-in-1 mask pack” for whitening and anti-aging. Successful viral marketing also played a part, stating it has scientifically proved the safety, wrinkle improvement, moisturizing and strengthening effects through clinical studies.

Officials responsible for Cell-Bloom brand said duty-free shops on Asiana Airlines would begin to sell their products in May.

“The quality and reliability of the Cell-Bloom have been proven once again by entering the duty-free Shop on Asiana Airlines,” a company official said. “We are expecting passengers flying 79 routes to 23 Asian countries would show interests and plan to enter China and Southeast Asia directly by using duty-free sales as a stepping-stone.”

Biopharmaceutical company Celltrion셀트리온 Inc. changed the name of its subsidiary Hanskin to Celltrion Skincure in 2015 to highlight its new makeover in its skincare lineup, raising awareness in the field of biopharmaceuticals.

Celltrion’s Chairman Suh Jeong-jin서정진 announced last August that his company would invest an additional 150 billion won in its beauty business in the coming years. “Cosmeceutical is a growing trend in the global cosmetics market. We, too, are pinning high hopes on it,” he said.

The company also established a new lab in its research and development center to adopt biotechnology for cosmetics products. The first product lineup “Bio C Hub Hydro Ample,” launched in October last year, got approval from the U.S. Food and Drug Administration to enter the U.S. market.

Consumers’ reactions are also favorable. “I have been using Cell-Bloom’s Dragon Re-firm eye cream and Leopard Rebalance Essence twice a day for three months now, and I love this product,” an Internet blogger wrote on her SNS website. “I have tried many of the regular ‘pharmacy/store’ products, and I've hated them all or found them ineffective. While using Cell-Bloom’s products I've found my skin to be smoother, fewer blemishes, smaller pores; it looks great!”

Key factors that supported the growth of cosmeceuticals market were with rising consumer awareness lured by the benefits of cosmeceuticals, their superior quality, and optimal prices.

“The cosmetics market is attractive to pharmaceutical companies because of the relatively small possibility of failure than the development of new drugs, and low investment costs,” a drug industry executive said. “As more pharmaceutical and biotech companies are jumping into the market, we believe the success or failure will depend on differentiated products and distribution networks.”

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