Kwang Dong Pharmaceutical, LG H&H vie for Korea's No.1 water brand

Samdasoo is manufactured at a factory on Jeju Island on April 8. Courtesy of Jeju Special Self-Governing Province Development

By Kim Jae-heun

Lotte Chilsung, LG Household & Health Care (LG H&H) and Kwang Dong Pharmaceutical are vying for distribution rights to Samdasoo, the country's No.1 bottled water.

The Jeju Special Self-Governing Province Development, a producer of Samdasoo, has recently announced it will open bidding for a cooperative company to retail its product in and outside Jeju Island.

A fierce competition is expected as winning the bid guarantees 300 billion won ($256.51 million) in annual sales. Not only this, but the retailer can expand its sales channel while distributing Samdasoo through the public corporation's network.

Samdasoo takes an unrivaled position in the bottled water market here with a 42.6 percent share, according to Nielson Korea. ICIS owns the second largest market share at 12.1 percent.

In addition, sales of Samdasoo has been increasing with the growing size of the bottled water market here. In 2016, Samdasoo made 241.5 billion won for the Jeju Special Self-Governing Province Development, which soared by 17.4 percent to 283.5 billion won last year.

Kwang Dong Pharmaceutical has been retailing Samdasoo for nine years now. Over 30 percent of Kwang Dong Pharmaceutical's sales come from retailing Samdasoo and losing its publication right means a steep decline in revenue.

Though, it is likely that Kwang Dong Pharmaceutical will lose the bid as the public corporation refused to extend the contract one more year.

LG H&H, which has been selling Samdasoo only to non-business sectors like hospitals and accommodations since 2017, is looking to secure exclusive distribution rights.

The Jeju Special Self-Governing Province Development said it will no longer separate the business and non-business sectors for two companies to sell Samdasoo.

LG H&H is keeping silent on this matter. The cosmetics firm currently retails Coca Cola in the country and had 1.51 trillion won of sales in the beverage sector last year alone. Selling Samdasoo to non-business sectors did not create much revenue for LG H&H, but if it wins the bid to retail the bottled water exclusively, the result will change dramatically.

Another candidate Lotte Chilsung is reportedly reviewing the possibility of joining the fierce bidding.