Bio industry will continue to see export boom next year: think tank

The Korea Times

The Korea Times

National

Tue, September 26, 2023 | 21:22

Health & Science

Bio industry will continue to see export boom next year: think tank

Posted : 2022-12-09 08:17

Updated : 2022-12-09 08:17

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By Lee Hyo-jin

Triggered by the COVID-19 pandemic, Korea's bio-health industry has been enjoying an export boom in vaccines and diagnostic kits. This trend is expected to continue throughout next year, according to the Korea Health Industry Development Institute (KHIDI).

According to the institute's report published Wednesday, the exports in the bio-health industry ― such as pharmaceuticals, medical devices and cosmetics ― are expected to hit $25.4 billion this year, a 0.3-percent increase from the previous year. The institute projected next year's export to hit $26.9 billion, up 5.4 percent from 2022.

In 2022, exports to the Asia-Pacific region accounted for about 50.3 percent of the entire export volume of biopharmaceuticals, with Europe and North America taking up 25 percent and 15.7 percent, respectively. There would be no major changes in these figures in 2023, the report said.

By product category, in 2023, export of pharmaceuticals are projected to surge by 15.5 percent year-on-year to reach $10.1 billion, cosmetics to $8.8 billion, up 6.7 percent, while the export of medical devices are expected to reach $8 billion, down 6.2 percent from this year.

The report, meanwhile, noted that the wild boom in COVID-19-related products such as diagnostic kits and vaccines has started to fade from the latter half of 2022 as many countries around the world are preparing to enter an endemic stage.

"Exports of diagnostic products, which saw a drastic increase due to the global pandemic, are expected to decline next year. However, exports of anti-pathogenic drugs such as biosimilars and toxins will continue to increase, accounting for 23.8 percent of the total share of pharmaceutical products," Han Dong-woo, a senior researcher at the KHIDI said during a press briefing held in Seoul.

Han viewed that during the pandemic, Korea's bio-health industry has shown high potential as the country's future growth engine, anticipating the growth to continue in 2023.

"Our health industry has proven its growth potential with a sharp increase in exports throughout the last few years, but we should bear in mind that this is partly due to the pandemic. The recent changes in the global trade environment might deal a blow in the export condition," he said.

He counted several factors that could increase the country's export of bio-pharmaceutical products in 2023; possible emergence of new variants and growing demand for biosimilar products in low-and-middle income countries, while warning that slowdowns in the global economy and rising presence of China and India in the global bio-pharma market could bring negative effects.

The researcher said the country should come up with strategies to bolster exports of bio-pharma products amid growing trade protectionism of the United States, China and European countries and changes in the global supply chain due to the U.S.-China trade war.

"In order to preemptively respond to the rapidly changing trade environment, there needs to be better monitoring about and establishment of a cooperation system between the government and the private sector," he said.

Share of cosmetics exports to China falls

In recent years, the phenomenal global boom in Korean content such as dramas, K-pop and movies have greatly contributed to the export of domestic cosmetics, also known as K-beauty products.

The main export destinations have been China, Japan, Hong Kong and Vietnam. In 2022, the Asia-Pacific region accounted for nearly 77 percent of total export volume, followed by North America (12.3 percent) and Europe (10.1 percent).

The researchers, however, found that China's share has been decreasing its weight from this year. In the first quarter of 2022, its market share stood at 44 percent, a drastic decline from 62 percent from the previous quarter.

As for reasons why, other than the pandemic-induced trade protectionism, the institute cited the "Guo Chao" movement which in Mandarin means "national trend" and refers to a consumer movement preferring goods that are infused with Chinese traditional cultural elements.

Thus, the report advised that Korea should expand its cosmetics export destinations and target North America and Europe, considering the continuing unstable condition in the Chinese market due to several factors such as the country's stringent zero-COVID-19 measures.
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lhj@koreatimes.co.kr