Expansion of Low-Cost Distribution and Competition for Overseas Sales Channels

In the natural products and red ginseng market, products are no longer confined to pharmacies or specialty stores, but are rapidly spreading into everyday retail distribution and overseas wellness channels. For example, some companies, backed by automation and bulk procurement, have introduced red ginseng products sold for 2,000 won at all Daiso stores, while another regional research institute has prepared to enter the European beauty and wellness market using cooperation with a Vatican monastery as a foothold.

This trend is driven by the fact that growth potential is limited if relying on domestic demand alone, while Korea’s elevated image through K-content is functioning as leverage for exports. The increasing number of moves focused more on securing customer touchpoints than on direct sales—such as on-site promotion in Los Angeles, U.S., or export consultation events with invited overseas buyers—means that the natural products industry has now moved beyond simply introducing regional specialties and entered a stage of full-fledged overseas brand competition.

Pressure to Localize Raw Materials and Technology

A prerequisite for industry expansion is securing a stable supply of raw materials, and here the weakness of the domestic supply base is becoming clearly visible. The fact that a research institute secured propagation technology for Asiasarum, a medicinal herb dependent on imports, and that a policy report presented raw material standardization and traceability management as key tasks shows that while the market is growing, the raw material system is not yet fully supporting it.

In the same context, companies related to natural products and healthcare are increasingly being evaluated not simply on product sales, but on their operational capabilities integrating data, manufacturing, and distribution. The inclusion of Intigration and Colosseum, both associated with the startup support group at Seoul National University of Science and Technology, in a scale-up program that selected only 50 companies nationwide indicates that market standards are shifting toward recognizing higher growth potential in firms that integrate supply chains and service systems, rather than those relying on the popularity of individual items.

Digital Transformation in Quality Assessment

As distribution channels widen, quality assessment is shifting from experience-based judgment to data-driven methods. The food and drug authorities’ introduction of an explainable artificial intelligence (XAI) sensory inspection system, along with the establishment of standard procedures for genetic analysis methods to identify the origin of herbal materials, is a response to market realities in which authenticity and adulteration are difficult to determine through visual inspection alone.

The significance of this change lies in simultaneously improving the speed and reliability of safety management. While inspections such as collecting 55 cases of products actually circulating in the market to check compliance with heavy metal standards continue, the addition of AI and DNA technologies will allow even traditional material industries to establish traceability and verification systems comparable to those used for manufactured goods.

Connecting Research Outcomes with Regulatory Easing

In academia, research into neurological diseases using naturally derived compounds continues, expanding the therapeutic potential of such materials. As the number of cases producing meaningful preclinical results—such as genistein and dehydrocostus lactone (DHE)—grows, the authorities are also revising the system to simplify approval data requirements and procedures for some herbal medicine formulations, including extracts and fluid extracts.

This aligns with the trend of natural products expanding beyond traditional ingestible remedies or regional specialties into multiple layers of application as pharmaceuticals, health functional foods, and beauty ingredients. However, research achievements do not automatically translate into industrial success, so future competitiveness will depend on how quickly scientific validation can be standardized and connected to actual products and export specifications.