K-Pharma Platform That Has Captured 90% of Pharmacies… Breaking Through Simultaneously in KOSDAQ and Global Markets

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Pharmacies were notably lagging in DX (digital transformation). It was a daily routine for pharmacists to log into multiple wholesaler websites separately to search for the same medications, compare inventory and prices, and place orders. CEO Kim Seul-gi of Baropharm, who had been operating a pharmacy, thought that “it would be great if pharmacy orders could be managed in one place, just as open banking apps allow managing multiple financial accounts in one spot,” amid her fatigue with such tasks.

This led to the creation of ‘Baropharm,’ an integrated platform for pharmacies. Launched in 2021, it is a business-to-business (B2B) platform connecting pharmacies and pharmaceutical wholesalers. It enabled orders that previously took an average of over 30 minutes to be completed with a single search. Building on this, the company expanded its business by adding external product distribution and its own private brands. It is scheduled to enter KOSDAQ next month through an IPO for unprofitable companies, commonly known as the ‘Tesla criteria.’

There are 24,787 pharmacies registered on Baropharm, accounting for approximately 90% of all pharmacies nationwide. The company did not gather this many users with just the ordering function from the start. Kim (CEO) stated that “the out-of-stock product restocking notification service was a hit during the pandemic.” Previously, when medications ran out, pharmacists had to call wholesalers’ sales representatives one by one, but Baropharm integrated this into a platform feature. By adding a pharmacist community, the company built its current membership scale.

More than 16,000 pharmacies use Baropharm every month, and about 70% of them log in daily. The average daily time spent on the platform exceeds 18 minutes. Kim (CEO) emphasized that “pharmacists are busy with dispensing and patient care as soon as they start work, so staying on the platform for nearly 20 hours a day means Baropharm has become an essential site for pharmacy operations.”

Although Baropharm has improved pharmacists’ ‘quality of life,’ there is no separate fee. Kim (CEO) explained that “we operate the platform service for pharmacists free of charge so they can focus on their work without financial burden,” adding that “the revenue structure is based on collaborations with listed companies and suppliers, leveraging pharmacist traffic.” Easy accessibility and free services serve as barriers to entry for competitors. On top of this solid traffic, the pharmaceutical transaction volume over five years has reached 720 billion won.

Kim Seul-gi (CEO), who modeled Baropharm’s initial concept after open banking, soon began benchmarking commerce platforms as well. Kim (CEO) stated that “just as various commerce platforms expanded their scope beyond intermediation to direct purchasing, we believed Baropharm needed to lead the market by directly buying products and driving pharmacy distribution.”

This led to the launch of BMS (Baropharm Marketing Service) in 2024. Under BMS, Baropharm directly purchases products from brand companies and handles platform exposure, sales, and logistics to sell them to pharmacies. Revenue jumped from 11.6 billion won in 2023 to 96.7 billion won last year, driven by BMS. Partnerships have entered a turning point with the recent signing of three-year long-term contracts with major global pharmaceutical companies. As large brands enter, more pharmacies use the platform; as the number of pharmacies grows, other brands follow, creating a virtuous cycle that gains momentum.

Baropharm is also cultivating its own brands, having launched health functional food ‘OurPharm’ and cosmetics ‘Levicl,’ and recently expanding into over-the-counter drugs through the acquisition of CHD Pharmaceutical last year. Kim (CEO) stated that “because we develop products reflecting on-site demand identified through pharmacy order data and partnerships, the failure rate is lower than for general brands,” adding that “just as commerce platforms grew by nurturing listed brands and improving profitability with private labels, Baropharm follows a structure extending from the platform to partnerships and our own brands.”

Thanks to structural improvements beyond just the platform, Baropharm recorded its first profit in the first half of this year, with revenue of 69 billion won and an operating profit of 2.2 billion won. Kim (CEO) noted that “the platform construction is complete, so fixed costs will not increase further, and partnerships have passed the stage requiring additional personnel and logistics setup,” adding that “total gross profit continues to grow while costs have already been front-loaded.” The annual target for this year is revenue of 174.6 billion won and an operating profit of 7.2 billion won. By 2028, the company aims for an operating profit of 30.2 billion won.

‘Pharmacy Beauty Zone,’ which Baropharm installs in each pharmacy as a shop-in-shop format, is a dedicated shelf for K-beauty. It was planned with the observation that foreign tourists visiting Korea are going to pharmacies after Olive Young and Daiso. The ‘Pharmacy Beauty Zone,’ currently installed in more than 200 pharmacies, aims to expand to 1,000 locations soon. Placing beauty products, which have higher margins than pharmaceuticals, on the pharmacy’s ‘core shelf’ has also received a positive response from pharmacists.

Internationally, the company is advancing with its own brands at the forefront. In mid-this month, Levicl was listed in the Shinjuku store of the Japanese drugstore chain Ainz & Tulpe (ainz&tulpe), and the number of stores is set to increase to 80 this year. Listings in more than 250 stores of Matsumoto Kiyoshi, Japan’s largest drugstore chain, have also been confirmed, with plans to expand to over 500 stores in the future. This is due to recognition of Baropharm’s position as a ‘K-pharmacy platform’ behind Levicl’s brand power.

Baropharm is also initiating its North American strategy through Amazon. Product sales will begin in December, followed by the opening of a ‘K-Pharmacy Pavilion’ to introduce pharmaceuticals and K-beauty products that sell well in pharmacies, selected from Baropharm brands and listed companies’ products.

Despite the recently sluggish IPO market atmosphere, Baropharm is pushing forward with its KOSDAQ listing in mid-next month. Kim (CEO) stated that “Baropharm’s biggest goal has always been to generate significant operating profit and become a growing company; listing is just a process we go through,” adding that “if we were looking only for investment recovery, we would have delayed the timing, but we are following all processes in the standard way.”

Kim (CEO) said, “I felt that being recognized through the mechanism of a KOSDAQ listing is necessary to continue and expand long-term partnerships with global pharmaceutical companies,” predicting that “as consumer-facing services and own-brand products increase, the title of a listed company will also help build customer trust.”

Baropharm’s expected offering price range is 16,400 won to 20,200 won per share, with an estimated market capitalization of 195.9 billion won to 241.3 billion won. Kim (CEO) explained that “we set the offering price in a market-friendly manner so that investors can share in Baropharm’s growth after listing.” According to Baropharm’s securities registration statement, the corporate valuation (post-money) at the time of the last investment was approximately 180 billion won. This is not significantly different from the lower end of the current expected offering price range.

Baropharm will raise 29.2 billion to 36 billion won through this offering. Of this, 14 billion won will be used for production facilities. The company plans to reduce brand cost ratios to the 40th% range by 2028 through expanded in-house production. The remainder will be invested in AI (artificial intelligence) and overseas brand expansion. In addition to prescription-based order automation features, the company is developing an AI agent exclusively for pharmacists.

Baropharm is expanding its customer base beyond pharmacists to doctors and consumers. It launched ‘AroundPharm’ for consumers two years ago and recently opened ‘BaroMD’ for hospitals and clinics. Kim (CEO) emphasized that “in three years, Baropharm will have grown into an AX healthcare platform encompassing pharmacists, doctors, and general consumers.”

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