Gu Chang-geun, CEO of CJ Olive Young, "Beyond H&B Store to 'Omnichannel Lifestyle Platform'... Creating Unprecedented Innovation"

Koo Chang-geun, CEO of CJ Olive Young, is presenting this year's achievements and next year's key strategic directions at the '2021 Olive Young Awards & Festa' Media Connect held on the 10th at Dongdaemun Design Plaza (DDP) in Seoul.

[Asia Economy Reporter Yuri Kim] "CJ Olive Young is evolving beyond a Health & Beauty (H&B) store into an 'omnichannel lifestyle platform based on healthy beauty.' There is still significant potential for growth within this expanded ecosystem."

On the 10th, at the '2021 Olive Young Awards & Festa' media connect held at Dongdaemun Design Plaza (DDP) in Seoul, Koo Chang-geun, CEO of CJ Olive Young, said, "Although some say that the H&B store market share (MS) has already exceeded 80%, limiting further growth, we have been segmenting the market since 2018. When looking at the entire domestic beauty market, Olive Young's MS in the beauty sector only grew from 8% in Q1 to 14% in Q3 this year, so there is ample room for additional growth." He emphasized, "Internally, no one now defines CJ Olive Young simply as an H&B store. As an 'omnichannel lifestyle platform based on healthy beauty,' there are infinite growth opportunities."

In particular, the health category, another pillar alongside beauty, saw rapid growth in sales volume from 369.7 billion KRW in 2019 to 382.7 billion KRW last year, and approximately 428.2 billion KRW this year. CEO Koo said, "We will deepen the beauty and health categories, focusing on what Olive Young customers want and what Olive Young can do well, and expand accordingly," adding, "You can expect more interesting developments next year."

CJ Olive Young projected that its annual sales volume this year will reach 2.4 trillion KRW, a 13% increase from the previous year. CEO Koo stated, "Sales grew 16.9% from 1.5697 trillion KRW in 2017 to 2018, and 18.9% the following year. Despite a slight decline (-3.8%) last year due to COVID-19, we expect double-digit growth again this year." He explained that this is a meaningful achievement compared to the domestic beauty market (excluding duty-free) growth rate of only 2.8% this year. He added that offline, online, and global sales volumes in Q3 increased by 13%, 58%, and 107% year-on-year, respectively, showing balanced growth across channels.

Regarding concerns that offline stores may lose appeal in the future, CEO Koo emphasized, "It will rather become a strength." He explained, "The functions of stores can be divided into three: sales, product storage, and brand display. While sales functions are increasingly difficult to grow as consumers recognize the convenience of online shopping, offline beauty market share rose from 14% in Q1 2019 to 23% in Q3 this year. Even looking at sales alone, a rapid decline is hard to predict."

He stressed the importance of product storage and brand display. "The products stored in over 1,200 stores nationwide cover online 'Today Dream' orders, enabling delivery within three hours," he said. "As of Q3 this year, 39% of online orders in Seoul and Incheon are fulfilled through immediate delivery 'Today Dream' via stores." He noted that the presence of Olive Young stores throughout these areas made this possible, which also explains why online growth rates are higher than other competitors. CEO Koo added, "Including the urban logistics centers expanding in the metropolitan area, the delivery coverage of stores and urban logistics centers will reach 70% next year," and "70% means delivery within 12 hours, which will be a major competitive advantage for CJ Olive Young."

Store displays are also a differentiating point for CJ Olive Young. CEO Koo said, "CJ Olive Young leads trends such as 'Clean Beauty' through its display methods. We display products from partners and brands in the most effective way, and from next year, we will strengthen differentiation in each store."

The successful omnichannel transition is also the result of strengthening online-to-offline (O2O) synergy by linking stores and online malls since launching 'Today Dream' at the end of 2018. CEO Koo said, "This year, membership numbers and cumulative cosmetic reviews each surpassed 10 million. Monthly active users (MAU) of the mobile app exceeded 3.33 million, surpassing the level of well-known specialty malls." He emphasized that sales during the Olive Young Sale held for a week earlier this month reached 120 billion KRW, with 35% of that from online orders. "On the last day alone, online sales reached 10 billion KRW," he said. "During the Olive Young Sale, Olive Young traffic is the highest on the shopping app. The mobile and online sides have already established themselves as meaningful platforms."

Based on these achievements, CJ Olive Young plans to make 2022 the inaugural year of its evolution from a traditional Health & Beauty (H&B) platform to an 'omnichannel lifestyle platform pursuing healthy beauty.' The key strategy for 2022 is 'innovative growth.' The main strategic directions next year are ▲continuous digital investment ▲offline store evolution ▲trend leadership and ecosystem contribution.

Regarding digital investment, the company plans to continue expanding investments across online and offline platforms next year. In July this year, CJ Olive Young conducted its largest-ever digital (IT) recruitment since its founding. The goal is to internalize over 80% of digital planning and development capabilities by next year. For offline store evolution, CJ Olive Young will enhance its unique curation experience and store display functions, undertaking major renovations focused on 250 large stores including flagship and town stores.

For trend leadership and ecosystem contribution, the company plans to develop new categories proposing a healthy and beautiful lifestyle centered on beauty and health, actively responding to wellness trends. Through its proprietary direct export platform 'Olive Young Global Mall,' it will strengthen its role as a gateway for emerging brands' overseas exports and continue to lead healthy growth of the industry ecosystem. CEO Koo forecasted, "Global Mall will grow more than 50% next year and record meaningful sales."

CJ Olive Young is preparing for an initial public offering (IPO) targeted for next year. Last month, it selected Mirae Asset Securities and Morgan Stanley as lead underwriters, and KB Securities and Credit Suisse (CS) as joint lead underwriters, beginning full-scale listing preparations. The financial investment industry estimates CJ Olive Young's corporate value to exceed 2 trillion KRW.

Meanwhile, on the same day, CJ Olive Young announced the 'R.E.V.I.V.E' health and beauty trend summary keyword for this year, along with 134 award-winning products across 28 categories selected based on approximately 100 million customer purchase data. Jin Se-hoon, head of CJ Olive Young's MD Business Division, explained that the keyword R.E.V.I.V.E reflects the beauty market beginning to regain vitality this year, highlighting ▲Routine ▲Effect ▲Vital ▲Incense ▲Vegan ▲Envy.

The Olive Young Awards & Festa, held from the 10th to the 12th, is a convention-style event based on customer purchase data that has been held since 2019 as a credible indicator showing the year's trends. CEO Koo said, "The Olive Young Awards & Festa, established as a credible event based on 100 million data points, is Korea's representative beauty festival showcasing the present and future of beauty-based lifestyles," adding, "CJ Olive Young will make next year the inaugural year of its leap to an 'omnichannel lifestyle platform' pursuing healthy beauty and create unprecedented innovation."

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