Recently, more pharmaceutical companies have been entering Asung Daiso Co. The range spans from health functional foods to health foods and cosmetics. Asung Daiso Co. purchases products directly. People in the pharmaceutical industry said the advantage is that there is no burden of returns.
Because Asung Daiso Co. purchases products directly, it basically does not accept returns even if inventory remains in stores. Its policy is to handle items internally even after their expiration dates. This is possible because orders are placed based on internal analysis of sales trends.
Asung Daiso Co. orders only the minimum quantity when first stocking a product. It then monitors sales trends and proceeds with additional stocking. Rather than overordering from the start, it orders appropriate quantities tailored to on-site conditions, so inventory generally does not remain.
A representative at Asung Daiso Co. said, "Unless there are quality issues such as product damage or defects, we basically operate stores without returns," and noted, "The products currently left in stores were launched last year, so they have not yet passed their shelf life and can be sold normally."
Pharmacies also sell not only medicines but health functional foods and cosmetics. Although it varies by pharmacy, there is a tendency to order relatively generously. It is an unavoidable structure in which products are returned after their expiration dates. In such cases, pharmaceutical companies discard the products, which directly leads to expense. A person in the pharmaceutical industry explained, "Pharmacies do not know which patient will come in and ask for which product, so even if they have to stack products, they have no choice but to secure supply."
There are also differences in product turnover. At Asung Daiso Co., in major commercial districts such as Gangnam, Hongdae and Myeong-dong in Seoul, not only general consumers but also foreign tourists shop for household goods and may naturally make bulk purchases of pharmaceutical company products.
Pharmacies, for their part, inevitably focus more on medicines than on health functional foods and cosmetics. This tendency is especially strong for pharmacies near hospitals. A person in the pharmaceutical industry said, "In the case of prescription medicines, pharmacists must dispense them directly, so in busy situations it can be difficult to also attend to health functional foods and cosmetics."
At Asung Daiso Co., prices are the same at all stores. Typically ranging from 2,000 to 5,000 won, they are cheaper than pharmacies. Prices were lowered by adjusting ingredients and dosages. In contrast, pharmacies have diverse supply routes and prices can vary by store. Some transact directly with pharmaceutical companies, while others bring in products through wholesalers or consignment firms. The more intermediaries there are, the more the final consumer price set by the pharmacy will inevitably vary.
Pharmaceutical companies currently at Asung Daiso Co. include Dongwha Pharm, Yuhan, Chong Kun Dang pharmaceutical, Dongkook Pharmaceutical, Daewoong Pharmaceutical and Ahngook Pharmaceutical. Dongwha Pharm introduced "Pyeonan Hwal," a version of Hwalmyung-su made exclusively for Asung Daiso Co., and the initial batch sold out. A cosmetic called "Husiderm," based on the active ingredient in the wound treatment Fucidin, also entered stores.
Chong Kun Dang pharmaceutical sells health functional foods under the brand "Daily Wise." It offers small packs containing only necessary ingredients such as multivitamins, minerals and omega-3. Yuhan has placed probiotics, and Dongkook Pharmaceutical is showcasing "Madeca" cosmetics containing the active ingredient in Madecassol at Asung Daiso Co.
Asung Daiso Co. has been selling pharmaceutical companies' health functional foods since last year. Pharmacists protested at the time, and Ilyang Pharmaceutical withdrew. Although health functional foods sold at pharmacies make up only 4% of the overall market, pharmacists were concerned that other over-the-counter medicines might also be sold at retail chains.
While mindful of pharmacies, pharmaceutical companies are cautiously expanding their presence at Asung Daiso Co. A person in the pharmaceutical industry said, "Entering Asung Daiso Co. not only reduces the burden of inventory management but also brings in younger customers at competitive prices in highly accessible stores." The industry is watching to see whether health functional foods and similar items sold at Asung Daiso Co. can expand the industrial ecosystem.