Woongjin Coway enjoys boon from national health trend

  

Woongjin Coway Co., already the industry leader in water and air purifiers, is enjoying a second bloom. 

The Seoul-based company logged sales of 1.51 trillion won ($1.43 billion) and 228.8 billion won of operating profits last year, marking the 12th consecutive year of record-high sales.

“In May, we reached record-high sales in just a month. We are entering our second heyday,” Woongjin Coway CEO Hong Joon-kee said at the company’s monthly assembly meeting early this month.

While thanking his employees for their hard work despite sluggish economic and market conditions, Hong warned against complacency, saying Woongjin still has much to do.

Established in 1989, Woongjin Coway is the market leader in air purifiers, water filtration devices, digital bidets and other wellbeing home appliances.

The company’s local market share for air and water purifiers hovers between 40 to 50 percent.

Woongjin’s success story dates back to 1998 when the company made a splash with a unique rental business model that gave consumers a choice between renting water or air purifiers to reduce the initial high cost of purchasing one, as most of these machines come with hefty price tags. 

After logging a double-digit growth rate for years since 2000, the company is now poised to take the next big leap forward.

Despite the negative industry outlook triggered by overwhelming forecasts that the market will soon be saturated, Woongjin saw sales grow by 26 percent in water purifiers and 24 percent in air purifiers in May, compared to last year. The number of new purchases also doubled during the same period.

As of May, the total number of registered consumers surpassed 5.3 million.

“If this trend continues for the next three years, we will see an additional 400 billion won in sales,” said Kim Sang-joon, director of strategic planning at the company.

The appliances Woongjin manufactures have hit the right chord with Koreans, who are growing increasingly health conscious.

Woongjin explained that the trend centering in the metropolitan area has started to further spread to other regions nationwide amid the outbreak of foot-and-mouth disease and yellow dust.

According to the company’s analysis of 2.8 million water purifier customers for years, the growth was more apparent in local provinces such as Gangwon Province (10.3 percent), North Chungcheong Province (9.8 percent) and Jeju (9.1 percent).

Among other things, its emphasis of customer service has attracted more customers, the company said.

As part of its after-rental service called “the Cody system,” a trained purifier expert visits customers on a regular basis, changing used filters and ensuring that products are in optimal condition free of charge.

Along with this signature program, the company runs the “Heart service,” which guarantees customer services offered within three hours of service request all year round. The company also started a specialized cleaning service to help consumers keep their products sterilized.

To maintain its industry lead, the company has increased its investment in research from 3.5 billion won in 2008 to 5.81 billion won last year, almost a 66 percent growth. Within the year, the company aims to launch nine new models of water purifier, two bidets and 10 air purifiers.

Last year, the company launched a new cosmetics brand Re:NK as a new growth engine. In the first three months this year, the company recorded 17.4 billion won in sales, exceeding the original target of 10 billion won. Based on a high-end marketing strategy starring top actress Koh Hyung-jung, the company plans to diversify sales channels in the coming years.

By Lee Ji-yoon (jylee@heraldcorp.com)