A Paradigm Shift 'Rehouse'... Designing the Changes of the Era

[Companies Beyond COVID-19]②Hanssem

Editor's NoteDespite the COVID-19 pandemic, South Korea's leading companies are achieving record-breaking performances. This is an unusual phenomenon that goes against the global trend. It is thanks to years of solid foundational strength and a well-structured business portfolio designed to withstand risks. They actively leveraged the untact (contactless) economy culture, which quickly became mainstream due to COVID-19 variables, as an opportunity. Above all, through companies' 'surprise performances,' we are reaffirming the unique resilience of our people in times of crisis. We aim to deliver an in-depth look at the strength of our companies that have risen to the top despite the toxicity of COVID-19.

[Graphic by Choi Gilsu, Deputy General Manager, Asia Economy]

[Asia Economy Reporter Kim Jong-hwa] COVID-19 was not a crisis but an opportunity. The recent growth of Hanssem, the number one company in the furniture industry, has been a great stimulus to many managers who habitually repeated the word 'crisis.' The reasons for Hanssem's growth can be found in growth strategies that quickly reflect changes in the times, product development combining trendy designs, and strengthened eco-friendliness. Above all, the starting point was a change in mindset.

Furniture Sales Staff → Space Experts, Satisfying Both Consumers and Employees

◆ A Change in Mindset Started with RD and KD = After COVID-19, as time spent at home increased, Hanssem read and led consumers' lifestyle changes who wanted to decorate their own spaces. The starting point was the 'Rehouse Designer (RD)' and 'Kitchen Designer (KD).' KD is the conductor who completes the kitchen space from design to construction supervision. If KD is an expert in the kitchen space, RD can be called a total interior expert. RD oversees the design and construction supervision of all spaces inside the home, including the kitchen.

RDs and KDs with expertise provide one-on-one customized services, designing spaces that reflect customers' lifestyles beyond brand and product recommendations. Through them, consumers can receive all the services they expected. The simple act of purchasing furniture has been elevated to a high-quality act involving all services related to interior design, including furniture color, quality, arrangement, and partial or entire space interior design. This change in mindset, transforming ordinary furniture salespeople into space experts, satisfied consumers, companies, and employees alike, becoming a stepping stone for growth.

Recently, the level of customer service has been raised to the level of hotel 'concierge.' The premium brand Nexus offers a 'Living Concierge Service.' Hanssem calls the experts providing living concierge services 'Lifestyle Curators (LC)' and treats them as professionals capable of designing top-tier lifestyles.

Hotel-Style Furniture Launched at Reasonable Prices... Strengthened Eco-Friendly Ratings Build Trust

◆ Various Furniture Released for the Homebound = Furniture supporting various activities spent at home was also quickly launched. The 'Euro 501 Flat,' released as a new study furniture product in the second half of the year, consists of modules such as tables, bookshelves, and special cabinets in various sizes selectable according to space, gaining great popularity among newlyweds wanting to decorate study spaces.

The 'Euro 503 Neutral White' bed was very popular among consumers wanting to decorate hotel-style bedroom interiors. Ceramic dining tables, which consumers had wanted but could not buy due to high prices, were also launched at reasonable prices. The 'Euro 503 Diago' dining table is produced in China using Italian production facilities, successfully increasing quality while lowering prices.

These products succeeded by promptly reflecting consumers' needs to decorate their homes as home cafes, home offices, and other spaces as time spent at home increased.

◆ Small and Medium Partner Companies' Furniture Also Eco-Friendly = The standards for eco-friendly products were also exceptional. Since 2017, Hanssem has manufactured and sold products using materials with formaldehyde emission grade E0 (0.5 mg/ℓ or less) and verifies safety for additional harmful substances such as volatile organic compounds (VOC), radon, and heavy metals. Setting a standard one level higher than the Ministry of Environment's E1 grade has been a driving force attracting consumers to the online 'Hanssem Mall.'

Hanssem also supports small and medium partner companies. In July, Hanssem was recognized as an internationally accredited testing institution by KOLAS, a Korean accreditation body under the National Institute of Technology and Standards of the Ministry of Trade, Industry and Energy. Hanssem shares test results of various materials tested by KOLAS with small and medium-sized partner companies and supports technology for new materials and methods.

Additionally, Hanssem supports testing costs for eco-friendly grades of partner companies at the new product launch stage. This helps not only Hanssem but also its partners supply safe and reliable products to consumers.

Delivery service has been upgraded to 'next-day delivery.' After introducing the industry's first next-day furniture delivery service last year, it has been fully expanded this year. In August, the logistics center in Siheung City, Gyeonggi Province, was expanded, establishing a nationwide 'next-day delivery' system with four centers in the metropolitan area including Siheung City and nine centers in provincial areas.

Thanks to this, Hanssem continues its solid growth by achieving 'surprise' results even in the off-season third quarter.

Operating Profit Up 236.34%, Sales Close to Reclaiming 2 Trillion Won

◆ Operating Profit Up 236.34%, Online Sector Up 68.9%... Leading Lifestyle Changes Proved Effective = Hanssem's performance (based on consolidated financial statements) showed operating profit of 24 billion KRW in the third quarter this year, an increase of 236.34% compared to the same period last year, and sales of 514.9 billion KRW, up 25.4%. Despite the third quarter being an off-season, steady results were recorded following the second quarter, thanks to the strong performance of the highly profitable B2C (business-to-consumer) sector.

The B2C sector grew 31.7%, driving sales growth. Particularly, the furniture sector, including the online segment (68.9%), grew significantly by 32.0%, supported by a solid flow in the remodeling and kitchen business centered on the future core strategy business, Rehouse.

The growth in the furniture sector was due to the continuous increase in time spent at home after COVID-19 and the rising demand to decorate personal spaces, actively leading future consumers' lifestyle changes. Thanks to this growth, sales from January to September this year reached 1.5265 trillion KRW, bringing the annual sales target of 2 trillion KRW within reach. Operating profit from January to September was 63.7 billion KRW, an 87.0% increase compared to the same period last year.

A Hanssem official said, "The furniture sector quickly reflected these changes in the times to develop growth strategies and products, breaking several years of stagnation and laying the foundation for regrowth. We continue to achieve encouraging results across all product categories, including bedrooms, living rooms, studies, and children's rooms, through product development combining practical functions and trendy designs, as well as strengthening eco-friendliness and improving product quality."

Hanssem added, "The advent of the untact era is expected to bring greater interest in residential environments with moves and weddings in the fourth quarter. As the number of aging houses increases and the value of the home space grows, the home furnishing industry will continue its growth trend."

This content was produced with the assistance of AI translation services.