Omnichannel Strategy Pays off Handsomely for Companies Owned by MBK Partners

Domestic consumer goods companies that have received investment from MBK Partners are drawing attention by making an impressive performance improvement. Analysts say that MBK Partners chairman Kim Byung-ju’s omnichannel strategy, which calls for strengthening online channels, is gradually paying off.

“Get big online or go home” was the prescription that Kim suggested early this year to turn around consumer goods companies hit by the spread of COVID-19. Then, Kim called for changes in strategies for consumer goods companies such as Homeplus, Modern House, Nepa, and Godiva which received investment from MBK Partners.

A case in point is Homeplus. The discount store chain’s online business has been growing by more than 20 percent annually. Of note is Homeplus Express, an immediate delivery service launched in March this year. Its average monthly sales growth rate reached 37 percent for the past six months.

Compared to March, immediate delivery service-based sales grew by 390 percent in August. In particular, sales for the two months from July to August grew by 104 percent from the May-June sales, indicating that consumers' preference for mobile app orders and the immediate delivery service surged due to the implementation of the fourth stage of social distancing.

Modern House, which sells furniture and interior accessories, is also showing a rebound in its business performance, escaping from the influence of the COVID-19 pandemic. All of its performance indicators, including the EBITDA, operating profit and sales, improved significantly compared to 2020. Modern House’s sales in the first half of 2021 reached nearly 180 billion won, up 7 percent from a year earlier. Its EBITDA stood at 25 billion won, up 30 percent from a year prior, and operating profit also rose 68 percent on year. If this trend holds, its EBITDA is expected to stand in the mid-50 billion won range this year.

Industry experts say that Modern House’s omnichannel efforts, such as expanding online and offline channels and providing customized products and contents according to channels, were effective. Modern House is diversifying its online channels by advancing into various channels, including Today's House, Coupang, and Timon. In the first half of this year, it additionally entered 10X10, LF Mall, and Shinsegae TV Shopping. For seven months from January to July, sales at its own online mall and partner online malls grew 68 percent compared to the same period of 2020.

Nepa also enjoys a notable increase in online sales, although they are relatively small compared to offline sales. Its own mall and external online malls such as content malls and department stores are leading Nepa’s growth.

In the case of its own mall, sales grew by 81 percent from January to August this year compared to the same period of 2019. Compared to the same period of 2020, sales at its own mall grew 11 percent this year. Compared to 2020, the number of members who purchased goods at its own mall in 2021 also jumped by about 15 percent.

Nepa's best hit channel of 2021 is content malls, which use content such as new product ads to increase sales on third-party platforms. In addition to Musinsa Store, Nepa expanded into Naver Smart Store, Kakao Store, and Wadiz, offering customized content and conducting sales campaigns that are tailored to the characteristics of each channel. Compared to the same period of 2020, its sales grew by more than 10,000 percent at content malls. Nepa is paying particular attention to the fact that sales of new products such as the C-TR 3.0 series grow by more than 40 percent every year through online channels.

In the West, including the United States, companies with omnichannel implement flexible sales channel strategies, an investment industry official said. "Omnichannel marketing is now essential for companies engaged in consumer goods and distribution, in that they increase corporate sales and boost profitability through a cost reduction in the long run."