Hanssem, Overtaken by Hyundai Livart for 1st Place, Aims to Regain Lead in Q3

Hanssem, which lost the No. 1 position in the furniture market to Hyundai Livart, is aiming to reclaim it in the third quarter.

According to financial information company FnGuide on the 21st, Hanssem is expected to surpass Hyundai Livart and regain the top spot in the furniture market in the third quarter. Previously, Hyundai Livart held the No. 1 position in furniture market sales for two consecutive quarters in the first and second quarters. This year marked the first time Hanssem stepped down from the No. 1 position.

Hanssem Starfield Suwon store view. (Photo by Hanssem)

원본보기 아이콘

Based on first-half sales, Hyundai Livart recorded 1.0018 trillion KRW, while Hanssem recorded 963.9 billion KRW. In terms of operating profit for the first half, Hanssem led with 20.1 billion KRW compared to Hyundai Livart’s 15 billion KRW, but Hyundai Livart’s growth was steep enough that in the second quarter, its operating profit (8.2 billion KRW) surpassed Hanssem’s (7.1 billion KRW).

However, the positions of the two companies are expected to reverse again in the third quarter. Hanssem is estimated to record sales of 455.3 billion KRW and operating profit of 6.6 billion KRW in the third quarter. Meanwhile, Hyundai Livart is expected to achieve sales of 401 billion KRW and operating profit of 4.1 billion KRW during the same period. Hanssem’s cumulative sales for the third quarter are projected at 1.4192 trillion KRW, while Hyundai Livart’s are 1.4028 trillion KRW, indicating that Hanssem will surpass Hyundai Livart in both quarterly and cumulative sales.

Although Hanssem is expected to reclaim the No. 1 spot, the outlook is not entirely positive. The reversal is attributed more to a slowdown in Hyundai Livart’s growth rather than Hanssem’s strong performance. Hyundai Livart’s sales grew by 30% year-on-year in the first quarter and 20% in the second quarter, but growth is expected to slow to 1.1% in the third quarter. Conversely, Hanssem’s third-quarter sales are forecasted to decline by 5.3% compared to last year.

'2024 Korea Build Week' Hyundai Livart booth scene. (Photo by Hyundai Livart)

원본보기 아이콘

The driving force behind Hyundai Livart overtaking Hanssem in the first half was growth in B2B (business-to-business) performance. In particular, built-in furniture sales showed a remarkable increase of 86.1% year-on-year. However, from the second half, the volume of apartment completions has decreased, causing built-in furniture sales to decline and overall performance to falter.

In the fourth quarter, Hanssem and Hyundai Livart are expected to be neck and neck. According to the housing market consumer sentiment index released by the Korea Research Institute for Human Settlements, the index fell by 6.5 points from the previous month to 113.9 in September. This marks the first decline in consumer sentiment in the housing market in 10 months since December last year. The contraction in consumer sentiment in the housing market is expected to continue in the second half, leading to a corresponding contraction in the furniture market.

Accordingly, both Hanssem and Hyundai Livart plan to lead the second half with business strategies focused on profitability rather than sales volume, and efficient growth strategies centered on core products.

An industry insider said, "Consumer sentiment has significantly weakened in the second half, so each company is adopting a conservative sales strategy rather than aggressive sales. Competition is expected to be fierce in the market for high-end products to improve profitability."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.