Aesthetic medical device company CLASSYS is accelerating its push into the Latin American market, centered on Brazil. It is capturing K-beauty demand with products such as "Shurink" for skin firmness. However, analysts note that as local sales increase, so does the burden of collecting payments.
CLASSYS said on the 28th that accounts receivable on a consolidation basis in the first quarter stood at 108.6 billion won. That is up 125% from the end of last year. Of that, Brazil alone accounts for 69.6 billion won in receivables.
Accounts receivable are essentially credit sales, a promise to pay on a specific date. A CLASSYS official said it is "the sum of current and noncurrent accounts receivable."
CLASSYS's flagship products include Shurink, which uses ultrasound to improve skin firmness. CLASSYS has supplied aesthetic medical devices in Brazil through distributors. The company said it booked money to be received later as accounts receivable instead of collecting payments immediately.
Brazil and other parts of Latin America make up the world's second-largest aesthetic treatment market after the United States. With large populations and the popularity among young people of Korea-related content such as K-pop Demon Hunters, demand for K-beauty is growing. However, some say that as sales rise in Brazil, concerns about collecting payments coexist.
Analysts say this is why CLASSYS is building a directly managed structure in Brazil. CLASSYS acquired Brazilian distributor Medsystems in March. It bought 77.5% equity in JL Health, the Brazilian company that owns 100% of Medsystems.
CLASSYS also acquired 100% equity in distribution subsidiaries in Colombia and Argentina. By establishing a direct sales system in Latin America, it plans to manage every step from product supply to marketing in house. The company expects to secure 15,000 customer touchpoints and expand its market share.
A CLASSYS official said, "We can save the fees we had been paying to distributors and have the advantage of conducting more aggressive marketing."
CLASSYS posted first-quarter consolidation sales of 87.2 billion won and operating profit of 37.2 billion won. Sales rose 13% from a year earlier, while operating profit fell 4%. Overseas sales account for more than 70%.
A CLASSYS official said, "Beyond Latin America, we are awaiting orders from a large clinic chain in Japan," adding, "In China, the high-frequency device Volnewmer could receive approval within the year."