OTD Corporation, a gourmet restaurant platform provider, has attracted a total of 42 billion won in equity investment from Neo Flux, a private equity fund (PEF) management company, and IS Dongseo, a construction company, Woomi Construction and Mirae Asset Daewoo.
With this investment, OTD Corporation has laid down the foundation for business expansion. The company has introduced the concept of “select dining” for the first time in Korea, bringing a new wave to the distribution and retail industries.
Select dining is a collection of famous restaurants from around the country, and can be considered a premium version of food courts. These restaurants are not pricey, fancy restaurants, but offer food at affordable prices to the general public.
Sohn Chang-hyun, CEO of ODT said, "In the existing distribution industry, they create a brand, copy it, and increasethe number of branches. OTD makes the opposite approach. We look for a space and propose a concept that can maximize the value of the space, and that becomes a platform.”
Representative examples are "Over the Dish," "District" and "Power Plant," all offsprings of OTD. Over the Dish has transformed the space that has not been visited for three years. It is Korea’s first multi-brand restaurant which restructured the third floor of Star City. Power Plant is a food and beverage multi-brand restaurant where five Itaewon restaurants are collected including Pizzeria d’Buzza.
As for the reason consumers love select dining, CEO Sohn said, "It is because the time of consuming a large amount of uniform value is over. These days, demand is bigger than supply, and consumers want to get unique and customized value, not mass-produced content. In the past, people used to stay at a hotel while traveling, but now they prefer places where they can experience local characteristics like Airbnb. Consumers don’t want typical content anymore."
For this reason, OTD always challenges the existing way of thinking. It created Market Locus with the thought that food courts at discount stores can be pleasant places where you can have nice food and take a rest, instead of being places where you just grab a bite. After accomplishing a big success in Starfield Hanam, Market Locus is going to enter 20 discount stores in Korea. E-Mart announced a plan to expand Market Locus at its major stores around the country.
Sohn said, "There used to be the idea that high table turnover ratio was the way to increase sales in food courts but it’s just the logic of producers. We went against the idea, thinking of a way customers can enjoy diverse food, enjoy their stay in a limited space. It increased sales.”
A big hit that came in this context is District series. In general, if office commercial facilities are expensive, luxury restaurants become the main attraction of arcades (commercial facilities). This is because arcades are accessory facilities and building owners want it to look luxurious.
Office workers, however, feel it too expensive if a meal exceeds 10,000 won. This creates a gap between building owners, who believe daily food in arcades will lower the value of the building, and tenants, who need cheap daily food.
Sohn explained, "I came up with an idea to bridge the gap. I thought if daily food comes into a nice space like department stores, residents would comfortably eat there.”
Select dining shops run by OTD have surpassed 20. District M (Myeongdong) opened in Myeongdong Daeshin Finance Tower, and District C (city hall) is scheduled to open in Booyoung Euljiro building. Currently, OTD is running F&B business in more than 10 large marts, resorts, and office buildings.
OTD is currently conducting pre-initial public offering (pre-IPO) worth between 30 billion won to 40 billion won for strategic investors (SI) and overseas institutional investors. It set a goal of going public with about 500 billion won in corporate value at the end of next year or the year after that. It is about the size of a food and beverage company of a conglomerate. If successful, early investors are expected to earn at least 10 times the money they invested, even when considering equity dilution.