[이커머스 혁신가들]① With 30,000 won windbreak greens and 7,000 won… Consumers and merchants laughed when they broke distribution practices.

Input 2021.03.03 06:10

It is the era of e-commerce nationwide. Coronavirus infection (Corona 19) has accelerated the conversion of consumption from offline to online. While online-specialized distribution companies have grown rapidly, offline powerhouses are struggling. In the e-commerce market, where even large corporations with enormous financial power and infrastructure are stagnating, start-up companies that have captivated consumers by breaking down market boundaries are attracting attention. Chosun Biz selected an innovative company that was recognized for its unrivaled business model and sustainability among new e-commerce with accumulated investments exceeding 10 billion won with the advice of start-up related organizations. Divided into △food, △fashion·living, △logistics and delivery, we examine how they innovated the market in three parts. [편집자주]

One of the ingredients on the table of consumers looking for spring greens every March, wild windbreak greens sold for 20,000 to 30,000 won per kilogram until 6 years ago. It is twice as expensive as the same spring greens, such as Chwi-namul, Napa, and Dal-rae. Now it can be purchased for 7,000 to 8,000 won. It has not been that the climate or soil of Korea has changed significantly or the number of cultivated farms has increased sharply. A new e-commerce with arms raised to solve the complex distribution structure problems that cultivated farmers have been contemplating has changed the market environment.

Established in 2014,’Life with a Dining Table’, an e-commerce company specializing in food, established in 2014, examined the distribution structure of retail products in Tongyeong, Gyeongnam, the production center of windbreak herbs. Residents left little margin and handed over to wholesalers, but the price soared to 30,000 won after going through an intermediate distribution process. Since 2015, Siksaeng has packaged and sold a product named’Outdoor cultivation windbreak greens grown in a sea breeze on a clean island’ at its online mall for 7,000 to 8,000 won per kg.

The price went down to a third, but farmers’ profits increased three to four times. Annual sales of windbreak greens are 80 million won. CEO Kim Jae-hoon believes that although it is small compared to representative products such as corn and sweet potatoes sold at billions of billions of dollars a year, there is clearly a consumer base who is looking for such unique products and can grow the market. He said, “We have to compete with our own differentiated products to create an entry barrier.”

After the success of Market Curly and Oasis Market, numerous start-ups have entered the food e-commerce business. Among them, three e-commerce sites, which are constantly attracting new investments in recognition of their business feasibility, are being evaluated as surviving the jadeite. The protagonist is Life with a table, a food e-commerce permill operator specialized in agricultural products, a seafood specialty e-commerce yam table, and a livestock distribution company Jeong Hek-gak.

The three companies shortened the distribution process from’origin → care and packaging → intermediate wholesaler → consumer’ to’origin → care and packaging → consumer’ or’origin → consumer’, raising the supplier’s margin and lowering consumer prices. Existing e-commerce focused on top-line growth by specializing in a specific product line that was subordinated to widen consumers’ options, and by streamlining the distribution process with IT technology, it set a heavy barrier to entry for competitors.

Yang Seok-joon, a professor of business administration at Sangmyung University (Vice-Chairman of the Global Management Association) said, “Korean consumers have thought that it is difficult to determine the quality of fresh food online, but after going through Corona 19, they have a new experience and now they are used to (purchasing).” In the fresh food sector, especially companies that do not meet consumer expectations will not survive. Food e-commerce that has grown last year is highly likely to have grown regardless of Corona 19,” he said.

◇’Life with a dining table’… Sales of’unique agricultural products’ that are not available in Coupang and Market Curly

Chodang corn, which is sweet even if eaten raw without steaming. Siksaeng is the first place in Korea to introduce this popular agricultural product, which has been popular since 4-5 years ago by word of mouth on social media (SNS) through word of mouth. Representative Kim, who first tasted Chodang Corn at the 2011 Japan Food Fair, imported seeds and developed a cultivation method suitable for the domestic environment. After several trials cultivation, it took a full three years to commercialize.

At Permill, a food store specializing in food, you can see the fruits and vegetables that we commonly see and products that have changed’one end’. For example, to maximize the sweetness, more than 40 kinds such as’Cave Sweet Potatoes’ aged in a cave for more than 100 days,’Uiseong Hanji-type native garlic’ with less indigo and a strong spicy taste, and’Yo-Yo Cherry Tomatoes’ with a higher sugar content than regular cherry tomatoes There is a product. Even though they are a little expensive, they are products that cannot be tasted without permeal. CEO Kim Jae-hoon said, “Out of the 500 items sold, 20% are specialty foods (specialty products) that can only be purchased from Permill, and 50% of sales come from here.

These specialties are excavated through trial cultivation on a farm directly managed by Food Life, and then they are raised directly by signing contracts with 190 farms nationwide. This is why food life is both an e-commerce and an agricultural start-up. It is a business model that is impossible for anyone who suddenly jumped into agriculture, but it was possible because of the land and know-how he inherited from his parents, who had been farming his entire life in Uiseong, Gyeongsangbuk-do. In the early days of its founding, there were no farmers who wanted to cultivate exotic agricultural products, so they went around the country’s mountainous areas, but more and more farmers believe in food life and contract cultivation after the so-called crash of Chodang Corn.

Food life sales surged from 120 million won in 2016 to 13 billion won last year. There are many housewife customers in their 30s and 40s. The number of loyal customers who purchase more than once a week was 150,000, an increase of 150% compared to the previous year. The customer unit price also increased from 34,000 won in 2019 to 44,000 won last year. “There are 3,000 kinds of groceries that domestic consumers buy, and 15% of them make 90% of sales,” he said. “Our goal is to turn profitable this year by creating a structure that can stably supply strategic items that we have only.” .

◇’Yum table’… Freshly caught fish, washed, cleaned, and packaged for early delivery

Seafood is the item that has the most difficulty in handling large online and offline retailers who are good at fresh food. It is not easy to maintain freshness, and after selling a product with even a little problem, the brand image may fall at once. Although Corona 19 has lowered the psychological barrier to non-face-to-face consumption of fresh food, many consumers still think that they should see and buy fish. Therefore, in online malls of large retailers, aquatic products have fewer items than agricultural products and livestock products, and delivery is relatively slow.

Yum Table, which started its service in 2017, aimed for a void in this market. Yam Table is headquartered in Geoje, Gyeongnam. Sang-Hyun Joo, who grew up in a family where fisheries from generation to generation, is received from fishermen in Geoje and Tongyeong, selects the size and quality, cleans, cleans, and packs before shipping. In the case of Seoul, Gyeonggi, and Incheon, you can order seasonal seafood such as sea squirt, shrimp sashimi, flounder, and raw oysters by 5 p.m. and receive until 7 a.m. the next day. The average price is 20-30% cheaper than the market price, as the two or three intermediate distribution stages that take to deliver to consumers have been eliminated.

Yam Table sold about 400 types of seafood and HMR in its own online mall and open market, generating 46 billion won in sales last year. It has increased by 50% compared to the previous year. In order to further promote the brand of Yum Table, it opened an offline store in Segok-dong, Gangnam-gu, Seoul last year.

CEO Joo said, “We plan to build a 3,000-pyeong aquatic product processing center in Tongyeong and Geoje (selection, washing, care, cutting, small packaging). The goal is to make sales,” he said.

◇’Jeong-hexagon’… Introduction of automation in meat manufacturing process Distribution of’super fresh pork’

If Food Life and Yum Table looked into the market from the perspective of a product supplier, Jeongyukgak started its business when CEO Jaeyeon Kim, who likes pork, thought,’I want to eat more delicious meat’ as a consumer. If the two companies focused on direct delivery of products through the establishment of a network with the production area, Jeongyukgak introduced automation software to the meat processing process to streamline the distribution process. Pork, beef, chicken and eggs are the main items.

Normally, pork is distributed to consumers through the process of’farm→slaughterhouse→processing→separating→packaging→selling. From farm to slaughterhouse to processing, it doesn’t take a long time because there are limited suppliers, but after processing, several intermediate wholesalers intervene at each stage, and the process is ended last year. The storage period in the warehouse before delivery to the consumer is extended up to 45 days. After purchasing the processed meat, buttocks slices → packaging → sales in a batch. Therefore, pork within 4 days of slaughter can be distributed.

The jeonghaenggak kept the freshness of the meat by streamlining the production process. In addition, in order to keep the quality between products similar, they developed their own automation software. This was possible because CEO Kim, who was from KAIST, hired about 10% of the total workforce as IT developers. The software serves to guide production personnel by adjusting job priorities to minimize bottlenecks between processes while maintaining the level of meat freshness the company wants.

Last year, the sales of Jeongyukgak increased by more than five times compared to the previous year to around 20 billion won. Unlike other e-commerce, the product is sold only at its own mall, and the number of customers has soared from 100,000 at the end of 2019 to 400,000 at the end of last year. CEO Kim said, “It will be different from some companies that enjoy the special sparkle of Corona 19,” and revealed an indicator that’the repurchase rate of customers who purchase more than three times is 97%’. Customers who have purchased a hex product three times become loyal customers.