NEWSROOM
Atomy sets sail to target the European market
- Name한은경_global
- Reporting datetime2021.04.27 15:15
Atomy sets sail to target the European market
Aspirations and market status of three offices: the UK, Turkey, and New Zealand
Last year, Atomy entered four new regions, including China, Colombia, Hong Kong, and India. As global sales reached KRW 1.9 trillion, it is about to exceed the KRW 2 trillion mark. While social distancing continued globally throughout the year, Atomy made a leap forward with the highest sales ever recorded. Atomy’s global expansion will continue to surprise the world. This year, Atomy is officially starting business in the United Kingdom and thus beginning to target the European market in earnest. Entry into the Commonwealth of Independent States, such as Kazakhstan and Kyrgyzstan, as well as Turkey and New Zealand, is planned. In this issue, we will look at the market status along with the aspirations of three General Managers of Atomy UK, Turkey, and New Zealand.
UNITED KINGDOM
Securing a strong foundation in the UK and Europe
General Manager
Ruby McGrath
“Even when traditional retailers were closed, direct sales companies quickly adapted
to provide services to customers."
The UK, along with Germany and France, is one of the leading countries in Europe. As of December 31 last year, when the transition period for Brexit expired, the UK officially said goodbye to the European Union. The country has an area of 24.36 million ha and the national average income per capita was USD 42,300 in 2019. According to the British Office for National Statistics, the total population in the UK was estimated to be 66.79 million in 2019, of whom the potential consumer population (aged 16-64, working population) was approximately 62.5% of the total population.
The UK people are prudent consumers. Apparently, a problem with the product or shopping experience is a waste of time. This led them to prefer brands that have been proven to have quality products and services over a long period of time. This conservative consumer tendency and high brand loyalty are big obstacles for foreign companies trying to enter the UK market. However, after the financial crisis, a consumption culture that focuses on cost-effectiveness, as seen in the expansion of super low-price retail chains and the popularity of low-price products that imitate high-price products, is growing.
According to the World Federation of Direct Sales Associations (WFDSA), in 2019, the UK's direct sales market was USD 3.21 billion, the 11th largest in the world and the third-largest in Europe, following Germany (USD 17.453 billion) and France (USD 5.184 billion). According to a recent survey conducted by the UK Direct Sales Association among its member companies, the size of the UK market grew by 45.5% last year and the number of distributors by 46.4%. Susannah Schofield, director of the UK Direct Sales Association, said, “Even when traditional retailers were closed, direct sales companies quickly adapted to provide services to customers. This year, direct sales will show strong growth as well.”
Atomy UK will open in June of this year. Aiming to serve as the true gateway to Europe, the British office will fulfill orders across the European continent through two warehouses: one in the UK and one in the Netherlands. It plans to accept not only the UK members but members from the whole of the European continent, offering access to a much larger network marketplace for Atomy members.
Ruby McGrath, General Manager of the UK, confidently said that, "The passion and eagerness of European Atomy members are clearly seen with large groups emerging and reaching out to our team in key market areas such as Spain, Germany, and France. We will secure a strong foundation in both UK and Europe through a world-class content strategy.”
The spread of a cost-effective consumption culture and the growth of the direct sales industry in the UK are expected to be the driving factors in Atomy’s expansion into the market. This is because Atomy is an icon of ‘cost-effective direct sales.’ In addition, if Atomy's Shopping Curating strategies or principle-oriented cultures appeal to the British, Atomy can expect a good chance of success in the country.
TURKEY
Introducing a new paradigm in the direct sales market in Turkey
General Manager
Jae Dong Shin
“We will enthusiastically conduct online business with Atomy’s powerful quality and price competitiveness to introduce a new paradigm in the direct sales market in Turkey.”
Turkey, where Europe and Asia meet, calls South Korea “kan kardeş,” a blood brother, because of their relationship as an allied force during the Korean War. It has a population of over 85 million people and the GDP was USD 754.4 billion in 2019. The land area is 78.35 million ㏊, which is eight times that of South Korea, and the national average income per person is a little over USD 9,000.
According to KOTRA, Turkish consumers are sensitive about personal care and the latest trends. The demand for plastic surgery among middle-aged people and the interest in social media, which affects the purchase behavior of consumers, are increasing. Also, the use of credit cards is rising as the consumption of luxury products and electronics grows. Young Turkish people, especially those in their teens and twenties, prefer online shopping as they use computers and smartphones frequently. For those in their thirties to forties, take price, quality, and the performance of products as important factors when making purchasing decisions. Overall, the income disparity is significant and the size of the middle class is relatively small, resulting in a clear polarization of consumption.
The direct sales market in Turkey had an annual growth rate of 6.4% from 2016 to 2019. According to the WFDSA, the size of Turkey's direct sales market in 2019 was USD 484 million, employing 1.3 million salespeople. One of the factors that has recently brightened the outlook of the Turkish direct sales market is the strong growth of the online market. According to Deloitte's 'E-commerce in Turkey 2019', the country's online market revenue in 2019 grew by 19% compared to the previous year, amounting to USD 2.5 billion. Last year, Turkish consumers purchased a variety of groceries online due to the COVID-19 pandemic and are adapting quite well to this unfamiliar area. Therefore, the expansion of its online distribution channels, which is now in its infancy, is expected to show rapid growth in the future.
Atomy Turkey, which is scheduled to open in the first half of 2021, is well aware that the average age of the population in the country is 31.4. It is forecasted to see robust growth when the dynamics of the economically active and young population are combined with Atomy’s absolute quality and absolute price strategy. Currently, it has registered over 50 products, including 18 cosmetics, and plans to carry out various marketing that utilizes the rapidly expanding online shopping and media commerce.
"Atomy is finally opening in Turkey, a country of the brothers of South Korea and the intersection between East and West," said Jae Dong Shin, General Manager of Atomy Turkey. He further explained, “The Turkish office will enthusiastically conduct online business with Atomy’s powerful quality and price competitiveness to introduce a new paradigm in the direct sales market in Turkey.”
NEW ZEALAND
GSGS will open up in the global marketGeneral Manager
General Manager
Mi Jung Lee
“We will introduce excellent products using New Zealand’s unique, pure ingredients to Atomians around the world and move towards success together.”
New Zealand is well known as the filming location of the Lord of the Rings series. It consists of two big islands, and its land area is 27.77 million ㏊, more than twice that of South Korea. With a population of 4.84 million, the total GDP is USD 206.9 billion, and the national average income per capita is USD 42,084. Due to the high income tax rate of up to 33%, its disposable income is low while prices are high. Yet, New Zealand has a social security system that supports each household's income based on average household income, so even low-income people have the purchasing power close to the average.
People in New Zealand usually show frugal and conservative consumption trends. Trendy products or luxury goods are rarely sought after. Therefore, consumer trends in New Zealand are considered to be a good fit with Atomy in that they prefer practical products with an appropriate price and quality. On the other hand, it should be noted that when it comes to product selection, loyalty to global brands and products they already use is high. Though difficulties are expected during the initial phase of market entry, Atomy New Zealand can expect a notable market response as long as the cost-effectiveness of Absolute Quality and Absolute Price is recognized.
The size of the direct sales market in New Zealand was USD 138.6 million in 2019, employing more than 107,700 salespeople. The flagship product lines include wellness products with a 39% share, followed by cosmetics and personal care products (21%), clothing and accessories (12%), household goods and durable goods (10%), and home decor goods (10%).
Atomy New Zealand will open in March of this year, and believes that the quality and price of Atomy products will be competitive. Atomy plans to make efforts to launch various Global Sourcing Global Sales (GSGS) products that will appeal to global Atomy members using the country's rare resources. Mi Jung Lee, the New Zealand General Manager, said, “We will introduce excellent products using New Zealand’s unique, pure ingredients to Atomians around the world and move towards success together.”
Editor Young-Min Lee
