Lock&Lock Q2 Operating Profit 6.8 Billion KRW... Up 48.3% YoY

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[Asia Economy Reporter Kim Heeyoon] Lock&Lock's operating profit in the second quarter rose 48.3% year-on-year due to the success of diversifying regional sales channels and categorizing channel strategies.

On the 3rd, Lock&Lock announced that its consolidated sales for the second quarter of this year reached 126.9 billion KRW, with an operating profit of 6.8 billion KRW. Sales increased by 7.5% compared to the same period last year.

Lock&Lock analyzed that export performance in the second quarter drove the overall results. The company's export amount in the second quarter grew by 36% year-on-year and increased by 17% compared to the same period in 2019, before the COVID-19 pandemic. Lock&Lock added that the significant recovery in demand for food storage containers and beverage ware in advanced countries such as the United States and Europe had a major impact.

In particular, the exclusive supply contract for airtight containers with Meyer US, the largest cookware distribution company in the United States, signed in 2019, helped expand the online distribution network. This year, expanding channels to large offline discount stores such as Costco and Target proved effective. Lock&Lock also maintained a strong performance by diversifying sales products, including plastic airtight containers, glass containers, and beverage ware, through QVC, the largest home shopping channel in the US and Europe.

China, the largest sales market, saw a slight sales increase of 1.3% year-on-year. Instead of the high demand for food storage containers in the second quarter of last year due to the worsening COVID-19 situation, the strategic product, water bottles, gained great popularity and drove growth. The dual mug, which became a hit product last year, introduced new colors and characters, achieving results on major online platforms such as Tmall and JD.com. Beverage ware growth in China recorded 42.4% in the second quarter.

The Vietnam market was severely impacted from April due to COVID-19, especially in stores with the highest channel share. To overcome offline sluggishness, Lock&Lock focused on major e-commerce channels such as Shopee, Tiki, and Lazada, with online sales increasing by 37% compared to the same period last year, helping to offset the overall decline.

Meanwhile, the domestic market grew by 7.3% compared to the second quarter of last year. From a profitability management perspective, the proportion of home shopping was strategically reduced, leading to a decrease in sales of cookware, the main product in home shopping. However, sales of small home appliances such as vacuum rice containers and steam air fryers continued to grow significantly, increasing by 238.2% compared to the same period last year.

Lock&Lock explained that actively discovering new domestic online platforms and strategically operating channels also contributed to the results. By focusing on growing platforms such as Naver Smart Store, Today's House, and Kakao Commerce, online sales showed a 34.4% growth compared to the same period last year.

Lee Jungmin, Executive Director of Lock&Lock's Management Planning Division, said, "Although there was some impact due to the worsening COVID-19 situation in Southeast Asia, including Vietnam, we continued growth momentum in the second quarter based on regional diversification, channel efficiency, and the strength of key categories such as small home appliances and beverage ware. We plan to focus on improving profitability through expanding exports centered on advanced countries such as the US and Germany, and strengthening the lineup of new small home appliances, beverage ware, and cookware in the second half of the year."

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