컨텐츠 바로가기 영역
주메뉴로 바로가기
본문으로 바로가기

NEWSROOM

Better, Cheaper...Secret to Atomy's growth with '2 trillion won sales' [Business Focus]
  • Name강주리_global
  • Reporting datetime2022.09.06 14:32


The goal is for the survival of all stakeholders, including customers and partners...Emphasis on sharing for 'sustainable management'  



Atomy Success Academy held on August 19


"A direct sales company, Atomy continues its growth momentum. In April this year, a direct sales magazine in the US, Direct Selling News announced the 2021 sales rankings of global direct selling companies. Here, Atomy ranked 10th with sales of 1.83 billion dollars. In just 13 years since its foundation in 2009, it has emerged as a global direct selling company.  


According to the data disclosed by the Financial Supervisory Service, Atomy’s consolidated sales last year totaled 1.93 trillion won. Atomy’s sales in 2010 amounted to about 80.9 billion. It has jaw-droppingly increased 24 times in just 12 years. When converting this into an average annual growth, it translates to an annual growth of 33.34%. This is remarkable to note this is the results achieved amid the Covid-19 pandemic which has lingered since 2020. According to a consulting firm, Deloitte, 

The average sales growth rate of global distribution companies for the past five years remains at only 5%.


Then, what made Atomy able to achieve such outcome? It has only one answer. “Better, Cheaper”. There are multiple ways of doing business in the distribution industry. Department stores, hypermarkets, convenience stores, online shopping malls, etc. are the cases of its kind. Atomy is one of those that sell directly. Direct selling has one notable. The headquarters ‘can directly select’ the product. Of course, other retailers also select products. However, they need some sort of ‘assortment’, which means, to sell a good product, they have to tie-in other goods to so that consumers can come to you. But, you don’t have to do so if you are a direct seller. You just find a good product and sell only that product to someone who needs it.  It's that simple.


There are two driving forces behind Atomy’s growth. One is health food, ‘HemoHIM’, and the other is a cosmetic product called ‘Absolute CellActive Skincare’. Atomy generates a whopping 370 billion won in sales annually both at home and abroad from only one HemoHIM line. The sales of Absolute CellActive Skincare amounts to 100 billion won. The annual sales of 100 billion won is a scale that even mid-sized cosmetic companies cannot afford. The principle of ‘better, cheaper’ Atomy emphasizes can be easily understood if you look at the sales story of HemoHim, its flagship product.


HemoHIM is health functional food developed by the Korea Atomic Energy Research Institute. HemoHIM was sold by several distributors even before Atomy started selling it. At that time, one box of HemoHIM that contains 60 pouches was sold for a maximum of 770,000 won. Atomy first shockingly lowered the price. It started selling at 76,500 won per box of 30 pouches. When converted to 60 pouches, it is 153,000 won. It’s less than half the price compared to the highest price. Not only employees, but also the people around Founder and Chairman Park Han-gill dissuaded him from selling, saying “it’s way too cheap”. However, Chairman Park pushed, saying that “if we sell at moderately lower price, there will surely be other companies that sell them cheaper. We have to sell it so cheap that no one else can even dare to think of selling it below the price we sell at.” 


Atomy went on one step further. As sales increased with selling it cheap, the unit price fell thanks to the advantage of mass production as the sales volume soared. As the unit price went down, Atomy increased the number of pouches. From the first 30 to 48, and to 54, and then to 60 pouches. Even in the face of rising prices and labor costs, the price was cut half while maintaining the original quality. As a result, HemoHIM became a mega-hit product that sells about 4 million boxes a year.


Another pillar that supports Atomy’s sales is Absolute CellActive Skincare (‘Absolute Skincare’). This product is the first cosmetic to be awarded the “Sejong the Great Award”, the technology patent grand prize by the Korea Intellectual Property Office. In addition, it has also received IR52 Jang Young-sil Award’ and ‘New Excellent Product (NEP)’ certificates. It is the ‘triple crown’ the industry desires for. This triple crown is attributable to a patented technology called ‘peptide design technology specialized to binding to skin cell receptors’. Absolute Skincare that utilizes this patented technology is composed of expensive plant cell regenerative factor (EGF: Epiderma Growth Factor) raw materials. EGF is a protein that is supplied from blood, saliva, and sweat and helps the wound on the skin to naturally heal without scarring. Even so, the price was set at 198,000 won.Since this is a set of 6 items, the average price is only 33,000 won each. It is a demonstration of Atomy’s will to provide consumers with the products that are made ‘better, cheaper’. As a result, Absolute Skincare is selling more than 100 billion won across the world without any special marketing activities.      




Atomy's Global Sales (Unit: KRW 1 million)

Domestic Overseas

* Source: Atomy 


"No matter what, we should never fail"


It is Chairman Park who has established and nurtured the company with one principle of ‘better, cheaper’. Chairman Park took his first steps into society as a marketing employee for an auto parts company. He worked at that company for over a decade and lived as an ‘employee’. The reason he turned into a businessman was when he learned of a sales method called 'network marketing' while on a business trip to Australia. Chairman Park explained the time as follows:


“At the end, any product has to be ‘sold’ to be of value. This is why retail is so important. In particular, in network marketing, products can be sold cheap because of its low margin. Adding to that, if the product is of good quality, it is a huge benefit to the consumer. Moreover, you can start a business without having to pouring much capital. This is how a person with a plastic spoon like me was able to start business.” 


Chairman Park, who left the auto parts company he was working for and entered a network marketing company, rose to the position of “the Chief Business Officer” with his own marketing know-how. But he continued to feel like something is 'missing' somewhere. This is because most of the network marketing companies operating in Korea at the time were not doing what Chairman Park thought of as “selling good products at low prices.” To make matters worse, Chairman Park's disappointment grew even greater when the company he worked for closed down. 


Eventually, in 2001, he founded an online shopping mall named ‘imkorea.com’. As the company name, ImKorea.com represents, with an ambition to become an internet shopping mall that represents Korea, it dealt with all products that can be bought in markets or department stores, from industrial products to rice, fish, meat, ramen, and even to green pepper. However, the result was a failure. This was because consumers were still unfamiliar with the concept of an internet shopping mall and the relevant infrastructure was not fully prepared in place. Chairman Park said, “I should have taken only a half step further, but I was too far ahead, passing over the market and consumers”, and added “after going bankrupt, I felt keenly that the company should never fail”.


Chairman Park, who became a credit delinquent due to the failure of Imkorea.com, started to raise his understanding of the basics of retail by reading over 250 books about retailing until he founded Atomy. At the same time, his dream of network marketing ‘selling good products at low prices’ was growing bigger. Then there came the opportunity, which was the health functional food, HemoHIM, and the   cosmetic ‘Sang-eol (natural look)100’. Both products were manufactured with Kolmar Korea’s technology with ingredients patented at the Korea Atomic Energy Research Institute (KAERI), so the quality was guaranteed. He decided to incorporate his belief ‘better, cheaper’ here. And he ran over to KAERI and Kolmar B&H (SunbioTech by then). This is the beginning of Atomy. 


While growing Atomy, Chairman Park made only one commitment, which is “I will never let this company go bust”. It was because he was well aware of how much damage it would incur if a company failed as himself went bankrupt and worked at the company that failed. Chairman Park said, “when a company goes bankrupt, it does not end with its own failure, but damages not only employees, but also business partners and even consumers. In that sense, it is almost a sin for a company to go bankrupt.”


He thought the key to a company that does not go failure lies in cost reduction. So, Chairman Park came with a management strategy, so-called ‘razor blade management’. It refers to thorough cost management as if the cost was cut by a razor with an aim of zero cost. Excessive costs are ultimately detrimental to both companies and consumers. His obsession with ‘survival’ also gave rise to another principle. That is, even if the company fails, it fails alone’. This to make a ‘company without creditors’. For this reason, Atomy pays its partnering companies in cash unconditionally within one week after delivery.


16 million members in 24 countires worldwide



Atomy Türkiye


As of the end of 2021, the number of Atomy reached16 million from 24 countries. One of the secrets of Atomy's growth is that it aimed at the global market from the start for one reason. The aforementioned answer: every consumer chooses a ‘cheaper, better’ product. In fact, as of the end of 2021, Atomy's total overseas sales amounted to 1.19 trillion won, exceeding the Korean sales of 1.33 trillion won. Atomy entered the US market in 2010, only a year after its founding in 2009. The economic powerhouse, the United States is also the 'home' of direct sales. According to the World Federation of Direct Selling Associations (WFDSA) data, the direct selling market in the United States will reach $42.67 billion in 2021, accounting for 23% of the global market. The headquarters of the top global direct selling companies such as Amway (with sales of $8.9 billion, as of the end of 2021), Herbalife ($5.8 billion) and Nu Skin ($2.7 billion) are also based in the United States. As the market is large, competition is intense. In that market, Atomy recorded 109.6 billion won in sales as of 2021. Among Korean direct sales companies, Atomy is the only one with sales exceeding 100 billion won in the US market.


Not only in the US, but also in the China·Taiwan·Malaysia markets, Atomy is selling more than 100 billion won per year. Since its advancement into the US, starting from Japan and Canada in 2011, Atomy now is operating its business in all continents on the earth except Africa, ranging from Tiawan, Malaysia, Russia, Australia, Mexico, the UK, to Kazakhstan and many more. In addition, it started business in Brazil this year and is planning to undertake business in Mongol, Uzbekistan, etc. 


Then, what is the purpose of improving the company’s performance? Atomy has one answer. To earn more, to share more, and to become happy all together. Around 200 employees are working for Atomy’s headquarters. Atomy calls its office building Atomy Park. Atomy Park has a swimming pool and gym. There is a horseriding course and a gymnasium near the office building. They are not just for show off. Any employees and their family members can use the facilities at any time. 



Atomy often uses the term “Chutzpah”. This Hebrew word meaning boldness and adventurousness is used at Atomy, meaning that you can express your opinion without being bound by form and authority. That’s also why Atomy has eliminated the rank system altogether. In addition, all executives and employees have the right to approve their work. An autonomous seating system that allows employees to work anywhere they want in the office building has also been introduced. 

Jeong-gu Yoon, a professor of business administration at Ewha Woman’s University, finds the secret to Atomy's success at this point. The network marketing that Atomy advocates is also called ‘multi-level’. The social view towards multi-level companies is not that favorable. What’s more, the ‘better, cheaper’ that Atomy advocates may be what all companies are pursuing. In fact, the Korean network marketing market peaked in 2015 and has not yet exceeded the 5 trillion won mark.


The reason for the stagnant growth lies in the fact that there has been no fundamental change that can overcome the negative perspective on network marketing. Nevertheless, the reason Atomy is growing globally beyond Korea is because it pursues ‘the happiness of all stakeholders’. Professor Yoon defined Atomy as a 'company of justice'. A company of Justice refers to a company that fulfills its responsibilities for the purpose by exerting its capabilities with a covenant of the goal of making the earth a better, healthier and happier place to live. These are companies that have proved their sustainability by inviting their ecosystem participants including customers and members to the business taking place on their playgrounds as protagonists of collaboration.


Professor Yoon said, “the reason Atomy became what it is today is because its CEO has a belief in the purpose and succeeded in communication by creating a fence to realize this belief.” He said, “Atomy was able to emerge as a global leader over other network marketing companies because it has continued to innovate for cost-effectiveness of products and strive for a fair compensation plan, but the more underlying reason is that it continues to pursue its purpose and core values that are hardly seen in other marketing companies.”


[Magnifier] A world where children are happy... Atomy's sharing management


Top 10 Donation Ratio to Closing Sales in 2021

(Rankings / Company Name / Type of Business / Proportion)

1 / Atomy / Distribution / 2.04%

2 / LG H&H / Daily Supplies / 1.25%

3 / NAVER / Service / 1.24%

4 / Jeil Construction / Construction·Food Materials / 1.20%

5 / HANA Financial Group / Financial Group / 1.14%

6 / Hoban Construction / Construction·Food Materials / 0.95%

7 / KT&G / F&B / 0.90%

8 / DB Hightec / IT·Electrical and Electronics / 0.84%

9 / Ssangyong C&E / Construction·Building Materials / 0.79%

10 / SK Lubricants / Petrochemistry / 0.62%

* Source: CEO Score (2022)


Atomy has become a reliable supporter of children around the world. Atomy announced on August 19 that it donated 14 billion won, including 7 billion won by Atomy Chairman Park Han-gil and 7 billion won by Atomy, to Compassion, a child-rearing organization. This is a donation following the promise to support 12 billion won last year and 6 billion won annually in February of this year. The amount of donation delivered to Compassion amounts to 30 billion won. 


This donation will be used for children in Asia, Latin America, and Africa, including countries where Atomy has entered such as Thailand, the Philippines, Colombia, Brazil, Indonesia, and Mexico. Specifically, it will be used for 33 projects, such as of supporting children suffering from disasters such as COVID-19, civil war, and earthquake, supporting selected students' higher education tuition, vocational education, and developing children's cognitive and social emotional abilities. An official from Compassion Korea said, ""(Atomy's donations) will be used efficiently and transparently for the urgent needs of children, their families and local communities around the world."", and added, “by nurturing children holistically, we are changing children, families, and even communities.” Compassion has a deep relationship with Korea. Compassion was founded by Pastor Everett Swanson, who visited Korea as an American chaplain during the Korean War, who witness the plight of war orphans and to help them. Korea, which has been sponsored by Compassion since 1952, graduated from the recipient country in 1993. And in 2003, it was reborn as the tenth donating country. This is the first case from a Compassion beneficiary to a sponsor country.


After hearing the news that Compassion needed an emergency donation, Amoty decided to donate 7 billion won without a hint of hesitation. Chairman Park said, “Children are the very future of mankind. I hope a world where children can run and play brightly and happily without suffering from poverty and disasters to come as soon as possible.”


Atomy's donations are the highest in the network marketing industry, distribution industry, and even among the top 500 companies in Korea. According to the CEO Score data, the distribution industry to which Atomy belongs saw a 10% increase in sales in 2021 compared to the previous year, but donations decreased by 20.2 billion won (14.3%↓), resulting in a 0.02% decrease in the donation ratio to sales. On the other hand, Atomy increased donations to 24.8 billion won, which more than doubled compared to 2020, and the ratio of donations to sales was 2.04%. Not only in the household goods and distribution industries, but also among all 500 companies designated in 2022, it is the only company with the ratio of donations to sales that exceeded 2%. The ratio of operating profit is a wooping 18%.


1





TOP

ATOMY HUB

Please check registration region

    • Korea

    • 20 years old or older Korean national ID card holders, Foreigners living in Korea, Foreigners living abroad (India, Hong kong)
    • USA

    • 18 years old or older SSN(Social Security Number) holders
    • Japan

    • 20 years old or older Japanese citizens (Residents), Foreigners living in Japan
    • Canada

    • 18 years old or older Canadian citizens, Canadian permanent residents
    • Taiwan

    • 18 years old or older Taiwanese citizens, Foreigners living in Taiwan
    • Singapore

    • 18 years old or older Singapore citizens, Singapore permanent residents
    • Cambodia

    • 18 years old or older Cambodian citizens, Foreigners living in Cambodia, corporation
    • Philippines

    • 18 years old or older Filipino citizens, Philippine permanent residents, Special Resident Retiree's Visa (SRRV) holders
    • Malaysia

    • 18 years old or older Malaysian citizens, Malaysia permanent residents
    • Mexico

    • 18 years old or older CURP holders
    • Thailand

    • 20 years old or older Thai citizens
    • Australia

    • Australian citizens, permanent residents, Work Permit Visa holders (Including Working Holiday Visa)
    • Indonesia

    • 18 years old or older Indonesian citizens
    • Russia

    • 18 years old or older Russian citizens (Residents), Foreigners living abroad (Ukraine, Belarus)
    • China

    • Consumer Member: 22 years old or older
      Dealer Member: Legally registered limited liability company, partnership, sole proprietorship enterprise or individual business in China
    • Colombia

    • 18 years old or older Colombian citizens, Colombia permanent residents
    • Hong Kong

    • 20 years old or older Hong Kong ID card holders
    • India

    • Residents who are India citizen, PAN Card holders, 18 years old or older, Maharashtra state: 21 years old or older
    • New Zealand

    • 18 years old or older N.Z residents
    • Türkiye

    • 18 years old or older Turkish ID cardholders, permanent residents
    • United Kingdom

    • 18 years old or older UK residents
    • Kazakhstan

    • 18 years old or older Kazakhstan citizens
    • Kyrgyzstan

    • 18 years old or older Kyrgyzstan citizens
    • Brazil

    • For 18 years of age or above CPF holder, corporate distributor
    • Mongolia

    • 18 years old or older Mongolian citizens, Foreigners living in Mongolia
    • Uzbekistan

    • Citizens of Uzbekistan over the age of 18
      Foreigners: B2 visa, E-visa, INV visa holders or person who has residence right
      Individual Entrepreneur for the production and installation/posting of advertisement (Reklama ishlab chiqarish va joylashtirish)
    • Europe

    • 18 years old or older EU or EFTA residents
    • Global Membership

    • Argentina, Armenia, Azerbaijan, Bangladesh, Bolivia, Chile, Costa Rica, Dominican Republic, Ecuador, El Salvador, Georgia, Guatemala, Moldova, Nepal, Panama, Paraguay, Peru, South Africa, Tajikistan, Turkmenistan, Ukraine, Haiti, Nigeria, Namibia, Botswana, Brunei, Sri Lanka, United Arab Emirates, Israel, Ghana, Gambia, Lesotho, Mauritius, Senegal, Kenya, Angola, Tunisia, Morocco, Egypt, Serbia, Albania
Go to the website

CLOSE