Meet the visionaries
Meet the visionaries Korean wellness giant coMes to europe coway uses ifa as a traMpoline to the world MarKet By Richard Barnes Joon Kee Hong, President, Coway Co. Ltd. Which previously was very much a niche market – “wellness” products – is becoming increasingly important, growing into a veritable segment in its own right. It’s a segment where there are many smaller players, but also some big players from outside of Europe, wanting to play in our ballpark. Coway is the biggest company of this kind in Korea and Japan, and this year, they’ve decided to use IFA as a steppingstone to the rest of the world. We asked the company’s President, Mr Hong, to tell us more… These days, in the whole world including Europe, customer needs for wellness products are growing dramatically. We want to supply the type of product to the customer in such a way that it fits their lifestyle. We produce water filtration appliances, air purifiers, electronic bidets, water softeners, food waste disposer… we call these wellness products. We are the number one company in Korea. The market share of our water purifier in Korea is around 57%, and this is incredible, a dominant position… but in the United States or in Europe the reputation of Woongjin Coway is not so big, so we want to enhance awareness of our brand in the European area. We want to establish new subsidiaries in Europe as we have in the Netherlands. We are already supplying products to the top 10 global home appliance companies. Are you making different brands for different countries? We have our own brand called Coway but the brand is not that well known, so we also want to sell our product through OEM brands. The most important thing is to increase the market size for this type of product in Europe. When we ask a consumer in France if they know about the electronic bidet, they don’t know about it, even though the bidet came from France! We want to let people know about the electronic bidet but because our brand is not well known, it is difficult at the moment. So we want to increase the market size and let the customers know about our products We can do this through the customers brand loyalty with established brands and good partners. The European culture is very different to yours… it will be a big education job getting them to use things like the electronic bidet… Yes, it takes time and investment and effort to let them know about the electronic bidet. But think about this… in 2002 in Korea, when we started the bidet business, nobody knew about it, but now 99%, even 100% of the people know about the bidet. If they use it once, they cannot resist using it all the time… What about water filters? I lived for two years in Barcelona, Spain and for two years in Budapest, Hungary and there were problems with drinking tap water, too much ‘scale’ (calcium) for example. Because of that, washing machines break down and you can’t drink the water from the tap. I’m sure our filters will help many people. But there is already competition in Europe for water filters… Yes, there is already tough competition for water purifiers in Europe, but the market size is still very small. If we can grow the market size we can have a significant share of that market. We have 240 R&D engineers working for us, there is no other company in the world with that level of R&D commitment in the water and air quality product sector. Only Coway has that level of commitment backed up by 20 years of experience. So you’re a “reference” in the industry? Yes. For example, when one of the top 10 global home appliance companies wanted to come into this market, they compared companies in Japan, Taiwan and China with ours. After reviewing all the others, they came to us, because we have the experience, we have the technology and we have the people… and we know the market. We can create the market in the European area. In three years time, the Wellness market will grow automatically, and we want to grow this market in Europe with good partners. We want to “grow the pie” with the right partners. Why did you decide to get into wellness products? Wellness Products are part of a megatrend, not a normal trend. A megatrend is irresistible. Everyone wants to have a comfortable life with good water and good air. So there is enormous growth potential worldwide. If we tried to compete in the AV area or the white goods area with Samsung and Philips it may be tough, but this however is a perfect area for us to compete globally because we are the number 1 (in Korea) and will be the market leader (elsewhere) in the future. Is there any way of analysing the market size and potential? It is difficult to analyse the market size as there is no data, but the most important thing is that the market size is growing rapidly. But the strong evidence is that big companies such as Whirlpool, Electrolux, GE, Philips and Bosch/Siemens want to enter this business area. They can see the future of the market. For now the market is small with a lot of competitors, but this is not a problem with a growing market. The question is ‘who can be number one in markets such as the US and Europe with technology, quality, brand and strong top tier partners’. This market will grow dramatically. IFA is extremely important for us in this sense, where alongside established products such as LCD TVs, people can discover this new type of product. It gives them a chance to see these products. I think participating in IFA is a very good decision. We believe IFA will be the best place to find new partners in the European area. Hall 5.1 / Stand 209 IFA International • Saturday, 5 th & Sunday, 6 th September 2009 www.ifa-international.org 23
