Embarking on a journey from a small room to achieving multimillion-dollar revenues, BNC Global's success is rooted in commitment to quality and safety. The family-led company selects the prime of derma filler technologies to give the optimal experience for people and doctors.
In recent years, Korean cosmetics exports have reached an impressive milestone, recording 10 Trillion KRW for two consecutive years, making Korea the 4th largest cosmetics exporter globally, following France, the United States, and Germany. This growth can be attributed to the proliferation of numerous innovative brands, particularly in the field of skincare products. To gain a deeper understanding of K-beauty's position in the global cosmetics market, what are the key strengths and weaknesses of the K-beauty industry? How do K-beauty products differentiate themselves from their international competitors, such as J-beauty (Japanese beauty) and French brands?
To begin, I arrived in this country as a foreigner, not fully understanding the Korean mindset, and observed how everything unfolded. South Korea, with its limited natural resources, has risen to become one of the world's leading nations. When I reflect on why Korean products excel in the global market and how Korea has reached the top five in the world, it all comes down to the people's mindset. Having lived in Korea for nine years and having traveled to numerous countries, I continue to be amazed by the way Koreans think and operate. Even after nine years, I feel that I have only scratched the surface of understanding. The focus on quality and the safety of products, rather than solely monetary gain, is evident in the Korean approach to business and life.
I believe that this emphasis on quality and safety places Korean products at a superior level compared to many others. Regardless of price point, Korean products consistently maintain high quality. While some markets may rely on low prices to gain a foothold, Korea's dedication to quality and safety stands out. Additionally, the global influence of the Hallyu wave, including K-dramas and K-Pop, plays a significant role in promoting Korean culture and products.
Allow me to share a personal anecdote from a recent trip to India with our Head of Marketing, Christina. While passing through airport security, Christina was singled out for an extended check by a security woman who was inquisitive about her skincare routine and sought recommendations. This anecdote illustrates how people around the world perceive Koreans as individuals who consistently take good care of their skin, contributing to the Korean skincare market's success. The youthfulness of Korean actors, K-Pop stars, and even ordinary individuals who appear significantly younger than their actual age is a testament to the effectiveness of Korean skincare.
Comparatively, Japan, with its J-pop culture, was well-known in the market. Both Korea and Japan are strong contenders in the global beauty industry, and both offer high-quality products. However, the immense influence of Korea's Hallyu wave sets it apart. While Japan also excels in terms of product quality, Korea's journey from limited resources to international success is emblematic of its people's determination and dedication, not just in cosmetics but across all fields.
You emphasized the importance of quality in this field. The Korean cosmetic industry has primarily focused on China and Southeast Asia, with China accounting for a significant 49.9% share of cosmetic product exports in 2020. Meanwhile, in Western markets, Korean brands are grappling with the challenge of aligning with customer expectations and competing against well-established historical brands. There's even mention of a spillover effect where Korean products are impacted due to the perception of low-quality Chinese products, given their geographical proximity. How crucial is it for Korean brands to increase exports to EU and U.S. markets, and what efforts has your company made to penetrate the Western market?
When brands enter the European market, such as making their way into the French market, they gain worldwide recognition and prominence. However, if they remain solely in the Asian market, they may not achieve global recognition. For example, one of our products initially lacked a CE certificate, and we were only selling it in the Asian market and Russia. At the time, people didn't inquire much about the product. However, once we obtained the CE certificate and entered the European market, we started receiving requests from all corners of the globe. People from countries like Colombia, where we hadn't conducted any marketing, reached out to us because they had heard about our brand. This illustrates the importance of entering Western markets.
Brands may argue that they have generated hundreds of millions of dollars by selling solely in the Asian market. However, I believe it's essential to expand one market at a time to reach the rest of the world. When you enter the European market, it effectively serves as free marketing for other countries. This is how I perceive it, and this is the significance of penetrating Western markets. Establishing a presence in Europe simplifies marketing efforts, and it makes your brand globally recognized through Europe. If you don't have a strong presence in Europe, you remain confined to one market. To enter other markets, you essentially need to start from scratch. However, by first establishing yourself in Europe, expanding to other markets becomes significantly more accessible.
The European market for cosmetic injectables is still relatively nascent, with biostimulators accounting for just 10 to 15% of the market, despite their rapid growth and the trend for a more natural look in Europe. How do you anticipate the European market's growth in the next five to ten years, and what opportunities do you see there, considering its infancy in comparison to South Korea?
As you mentioned, European people have a distinct mindset compared to the rest of the world. When it comes to the European market's growth, it may not experience rapid expansion as seen in other parts of the world, primarily due to this unique mindset. European countries often rank highly in global happiness statistics. People there tend to be content with their lives, which can influence their attitudes towards cosmetic procedures.
People typically seek injections when they are dissatisfied with some aspect of their appearance, and they hope that enhancing it will increase their overall happiness. However, happy individuals are often already confident and content with themselves, and therefore, they may not feel the same urgency to pursue cosmetic enhancements. In such cases, the pain and discomfort associated with injections might outweigh the potential benefits.
Changing this established mindset is a challenging endeavor. While introducing more natural and chemical-free products may pique the interest of some European consumers, the overall growth of the market is unlikely to be substantial. It may increase by only a few percentage points each year. In comparison, markets in countries like Brazil are experiencing rapid growth. Within Europe, not all countries share the same level of interest in injectables. The United Kingdom and France show more enthusiasm for such procedures, while other parts of Europe remain less interested.
As a result, we see opportunities primarily in select European countries. Expanding into these markets could serve as a gateway for our brand's products to reach a global audience. However, the overall growth of the European market is expected to be relatively modest.
What markets do you believe have the highest growth potential for your brand?
We have observed significant growth potential in the South American market. Our presence at an exhibition in Brazil in March of this year allowed us to connect with potential partners, and we have also established contacts in Mexico. These countries have shown substantial market growth, as evidenced by our meetings and market research. Therefore, I would highlight these countries as our primary growth markets.
It's important to note that injectables can be relatively expensive, and individuals typically need a certain level of income to consider such procedures. In economies that are experiencing growth and where people are earning higher incomes, there tends to be an increased desire for injectable treatments. We believe that countries with growing economies represent our most promising markets.
HA fillers are known for being aesthetically pleasing and relatively easy to use for doctors. However, certain challenges have become more prevalent over the years. For example, three to four months after the operation, the filler can start spreading, leading to an unnatural look. Additionally, companies used to claim that HA fillers were absorbed within two years, but there are now cases where residue can be found five to ten years later. Your brand has two well-known filler products, Tesoro and Elaxfill, which utilize a three-phase HA purification process to minimize side effects. Could you explain, from a technical standpoint, the advantages of these products compared to traditional HA fillers?
There are two types of fillers: monophasic and biphasic, each with its own set of pros and cons. Since 2018, we have heavily invested in research and development (R&D). Over the past five to six years, we have not encountered any side effects with our products. Our filler products are developed based on the first-generation fillers, which served as the foundation for our technical guidance.
From a technical perspective, we haven't ventured into creating something entirely new or adding many novel ingredients to stand out. Our focus has always been on quality and safety. Therefore, we have chosen to follow a traditional approach while placing a strong emphasis on safety. When it comes to differentiating our products, I wouldn't say there is a significant difference.
In the Korean market, there is a surge in the production of fillers and Botox, with Korea having more manufacturers than Europe. Many of these manufacturers introduce new products by making slight modifications, which can serve as a marketing point. However, most of these products end up causing side effects eventually.
In contrast, our team consists of professionals who have been working in the filler industry since its inception in Korea. They have helped us maintain the consistent quality of our products. We also collaborate with university professors who conduct tests and research papers on our products.
Regarding our brand Tesoro, a recent research paper compared it with Restylane, a European product. The results showed that there is not much difference. Our focus is on creating a product with the same quality in every batch, including the same G Prime and viscosity. This consistency is vital, especially for fillers.
Many patients experience inconsistencies with fillers from different batches, even if they visit the same doctor. We place a high value on stability to ensure that our products remain exactly the same from the first use to subsequent applications. This consistency is crucial for filler treatments.
You offer a wide range of products that provide different opportunities for your clients in terms of efficiency, price, or duration. Could you elaborate on your product developments and explain how you ensure safety and continuity for your products?
First and foremost, we approach our product development from a customer's perspective rather than solely focusing on the company's viewpoint. Many of the doctors who run clinics and are both our potential and current customers. They do not limit themselves to using just one product or treatment. Typically, a single customer may require a combination of treatments, such as filler for the lips or face, Botox, and skin boosters. Our customers, who are estheticians, often have to source these products from multiple companies, leading to extra coordination, waiting times, and hassle.
To simplify the process for our customers and provide them with a comprehensive solution, we offer a one-stop shop—a full package where they can find all the items they need. While we don't manufacture all these products in the same place, we do brand some of them from other factories. However, in most of the factories we collaborate with, we establish long-term partnerships before creating our brand. We rigorously assess the quality of their products. If a new factory approaches us with a business request, we are cautious about entering into a partnership with them. Typically, we choose products that have been in the market for a significant amount of time, have a proven track record, and have received positive feedback from customers regarding their quality and experience.
We prefer to work with factories that have well-established products and are known for their quality and customer satisfaction. Therefore, we engage in partnerships with such factories and obtain our branded products from them through contracts. This approach helps us ensure the safety and continuity of our product offerings.
We primarily work with Korean OEMs. Currently, it can be challenging to introduce European products into most of the markets we operate in as a Korean company. When consumers visit clinics, they often prefer premium products, which are typically American or European brands. European products are renowned for their higher price points in the market, whereas Korean products offer similar high-quality but at a more affordable price. By choosing European companies, we may encounter limitations in some of our markets where expensive European products are not a suitable fit. As a result, we face certain challenges, but we are doing well in terms of quality with Korean factories. So why spend extra when we can deliver the same quality at a more competitive price point?
South Korea has emerged as a global trendsetter in the realm of aesthetic treatments. In other countries, it's usually rare for men to get non-surgical treatment. What you have developed, Tesoro, is specifically for men. Can you explain more about this product and the challenge of developing something specifically for men?
First of all, the idea for Tesoro came from Christina. In the aesthetic field, over 90% of customers are women. Among clinics, out of every 10 customers, there might be one or even none who are men at this point. However, we see a growing trend where clinics are attracting more male customers day by day. In the aesthetics industry, the top-selling product for every company is filler, followed by Botox. While we might consider investing in other products in the future, filler is currently the best-selling product. We decided to develop Tesoro because there was no such product specifically designed for men.
Tesoro contains a concentration of 24 milligrams per milliliter of hyaluronic acid, which is a higher concentration than standard fillers. This higher concentration leads to a thicker consistency and longer-lasting results. These characteristics are tailored for men's skin, which was our primary focus during development. Even though the ingredient composition may not differ significantly from products for women, men typically prefer products that are labeled specifically for them. So, when male customers visit a clinic and hear that all other products are intended for both men and women, but Tesoro was recently developed specifically for men, it becomes a natural choice for them.
Among your products, you have Aestheline for lifting surgeries. The lift surgery market is intriguing because it often involves scarring issues, and doctors typically make incisions right behind the ear. However, approximately three years after the surgery, patients may experience skin sagging, which is a common occurrence. To revolutionize this market, we have seen the emergence of threads like PDO and PCL threads, with different absorption timelines. This has been changing the landscape of a market that was once rather complex. How do you expect this market to evolve, and what's your perspective on the popularity of PDO and PCL threads?
Threads have become the leading treatment for skin lifting, mainly due to their COGS that provide an effective lifting effect. One of the initial signs of aging is sagging skin, which can be rectified by lifting it, thereby making individuals appear younger. Thread technology has led to significant growth in this market. However, based on our experience, we have observed that some doctors in certain markets have not received adequate training for performing thread procedures. Unlike fillers where you simply inject the substance, thread treatments require doctors to master a range of lifting techniques.
In Korea, we have developed advanced techniques that offer the best possible outcomes in these treatments. While it's still an aesthetic treatment, the level of experience of the doctors matters significantly. The quality of the results depends on the skill of the surgeon, not just the product quality. So, it's a more complex procedure compared to injecting fillers or Botox. Having skilled doctors is crucial for achieving good results. We work with experienced professionals, including researchers and doctors, to ensure the effectiveness of our thread products.
Educational programs are a part of our marketing strategy as well. Many of our partners, particularly from Russia and the CIS region, are interested in these programs. We often invite doctors from abroad to South Korea for a week-long program, where our experienced doctors teach the techniques necessary for these procedures. This collaboration helps to ensure that doctors have the skills and knowledge needed to provide excellent results.
Often, Western consumers, including Australians, Americans, and Europeans, tend to hold the belief that Asian-made cosmetic injectables may not be suitable for Western faces, skin tones, or bodies. This misconception arises from the differences in skin type, height, hair, and other factors between Asians and Westerners. How do you think this misconception can be overcome? To put it bluntly, do you believe that Asian aesthetics and Asian treatment approaches are applicable to the Western world?
If this question were about skincare items, I would find it challenging to answer. However, the aesthetic market has been growing for a reason. In most cases, injections provide immediate and effective results. If these treatments weren't effective or if people were dissatisfied with the outcomes, Korean products would not have garnered interest from Europeans. A prime example is the Korean filler product Revolax, which has gained widespread recognition in Europe. European consumers, who are familiar with the filler market, have not only heard of Revolax but have also used it extensively, despite it being a Korean product. Their satisfaction arises from the clear, visible effects and positive results, making it more than an assumption or prediction—it's a fact.
In recent years, you've diversified into skin boosters and lifting. Looking at the future, what type of products are you planning to develop?
Developing products that can prevent or mitigate aging is an exceptionally challenging task. Our developers are actively testing various formulations, including the addition of new ingredients. In the case of threads, the market has evolved from PDO to PLLA, PCL, a combination of PCL and PLLA, and recently, we introduced PDO plus HA (hyaluronic acid). By adding hyaluronic acid to PDO, we achieve a more moisturizing effect in addition to collagen, offering enhanced results in the market.
Looking ahead, our strategy involves building upon the foundation of our existing products by incorporating additional features to create a two-in-one solution. For example, some filler products, such as calcium fillers, require specific skills. On the other hand, HA fillers can be dissolved if needed, offering safety and versatility. We aim to continue focusing on the development of safe products for both medical professionals and patients, maintaining the core technology while introducing improvements.
In the market, many companies are introducing new products with innovative technologies and ingredients. However, some of these new products cannot be dissolved or removed once administered. This limits their safety and flexibility. Our approach emphasizes creating products that are not only effective but also safe and reversible when necessary.
We also have a new product called botulinum toxin, distinct from the conventional botulinum toxin type A. While toxin treatments target muscle relaxation, our product includes an extra ingredient for skin rejuvenation, setting it apart from existing botulinum toxin fillers. Our future focus remains on enhancing our existing products with additional features and maintaining close relationships with the factories we work with.
It's worth noting that while we are not directly involved in manufacturing products, we hold shares in most of the factories we collaborate with. We partner with factories that share our goals, and before commencing any projects, we make agreements, invest, and acquire ownership stakes in these factories. This unique approach allows us to bridge the gap between manufacturers and customers, making it possible to respond to customer feedback, requests, and complaints effectively. This strategy has led to the success of several of our products.
Founded in 2018, you have accumulated sales in the Eurasian before quickly spreading in the rest of the world. You have grown into suppliers of aesthetic medicine products as well as developing an OEM activity for lift lines. To finally be rewarded in 2022 of the 10 millions USD Export Tower. Could you walk us through the inception of your company and the reasons for this fulgurant growth? Can you tell us about the evolution of your company for the next 5 years?
In terms of revenue, our journey began in 2018 with around $400,000, followed by $600,000 in 2019 and a significant growth to $5 million. It took us three years to achieve multimillion-dollar revenues.
Our initial market was Russia, given that my brothers and I could communicate in Russian, which stems from our Tajikistan background. Tajikistan was once part of the USSR, and Russian is our second language. We all came to Korea as students, and the idea of starting this business was far from our minds at the time. However, we received a request for a Korean product, which sparked our interest in exploring the business. Initially, the three of us handled everything, from packing products to riding bicycles to the post office to ship orders. We started in a small room, and over time, we were able to expand into larger spaces. Now, as you can see, we have a well-established office, with the help of talented Koreans who are professionals in our field, assisting us in running the business.
Our foreigner status has played a significant role in our success. We found ourselves in a unique position between Korean businessmen and foreign partners, allowing us to negotiate favorable deals due to our understanding of both cultures and mindsets.
Cultural nuances and language capabilities bridged the gap between Russian and Korean counterparts, which was not always easy. Our unique perspectives provided a competitive edge in terms of overcoming challenges and growing our business. The knowledge and insights we brought from Tajikistan helped us stand out and build a strong foundation for our company. This foundation enabled us to expand into other markets, as we invested in factories, products, and research and development.
One crucial factor was our focus on quality and compliance with Korean laws. Our commitment to strict adherence to all legal regulations was essential, as it allowed us to maintain visas and live in Korea without violations. This approach ensured that we did not compromise even on minor aspects of the business. We prioritized product quality and adhered to every employment law, such as paying employees for overtime work. This dedication to following the rules and regulations resulted in contented employees and customers.
To sum it up, our success can be attributed to our cultural insights, commitment to following all laws, and the subsequent satisfaction of our employees and customers.
Regarding the Export Tower award, the timeframe considered was from June 1, 2020, to June 31, 2021, which encompasses a year from summer to summer. During this time, we reached the milestone that earned us the award. Moreover, from July 22, 2021, to June 23, 2022, our sales exceeded 20 million USD, leading to the award. The award ceremony is scheduled for November. Also, this year's sales have already surpassed our previous achievements, with an expected growth of USD 50 millions. Looking ahead, we are excited about our future prospects.
CEO Mr Jaha Zoda
If we were to return for an interview with you in 2038, marking a significant milestone for your company five years from now, what ambitions do you envision achieving by that time?
While some say that dreams are best kept hidden, I'm happy to share a couple of aspirations.
Ours is a family business, and each of us has our specific roles, deeply rooted in trust. Unlike some companies that started alongside us but couldn't endure, we believe in a collective approach. They chose to go it alone, handling every aspect of their business independently, without placing trust in employees. Managing a business single-handedly can be a tremendous challenge because it necessitates personal involvement in every detail.
In our case, I was primarily responsible for the operations in Korea, while my eldest brother handled finances, and my other brother managed sales. We've maintained implicit trust among us, and we don't scrutinize each other's work. This has allowed us to move more swiftly since we avoid spending time monitoring each other. Furthermore, I tend to be more of a risk-taker, whereas my brother is more risk-averse. Striking this balance within our company has proven to be essential.
Our father's extensive experience in running a business throughout his life has also been an invaluable guiding influence on us. The entire family's contributions have played a significant role in shaping our company's journey.
As for our ambitions in 2028, we are committed to achieving a significant milestone. We aim to establish our own substantial corporate headquarters in a prominent building, complete with a sizable team of employees and robust sales. Moreover, we envision creating highly successful brands in the European market. Currently, we offer around 25 products, and our aim is to elevate the recognition and reputation of each one across Europe. The ultimate goal is to transform into a global brand with our headquarters based in Korea, while maintaining regional branches worldwide.
For more details, explore their website at www.mybncglobal.com