e-commerce case study IN JUNGHOON LEE SOHEE ESTER BAUNGRATZ _group 13 Date:

contents Company and environment overview Problems HANSSEM faced::SWOT e-commerce Trouble shooting procedure Result of HANSSEM Further Improvement Reference

Company and environment overview HANSSEM Co.,Ltd. is a total home interior manufacturer since Introduced modern kitchen design to Korea - Invented terms like System Kitchen and Intelligent Kitchen -Introduced the whole new concepts of the Kitchen culture to Korea 3 large branches: HANSSEM MALL HANSSEM INTERIOR HANSSEM KITCHEN

3 1 - economic depression in Korea - construction industry with problems - appearance of new multinational competitors such as IKEA - Decrease of the number of marriages that could be potential customers - Low price competition through homeshopping Company and environment overview

4 Problems HASSEM faced :: SWOT 2 STRENGTH - HISTORY - GOOD BRAND IMANGE - DEVELOPED DESIGN AND MANUFACTRE PART WEAKNESS - LIMITED DISTRIBUTOR - FOCUS ON KITCHEN INTERIOR OPPORTUNITY - DEVELOPMENT OF VARIOUS - TRANSACTION TYPE THROUGH TECHNOLOGY - NEEDS OF CUSTOMIZED PRODUCTS THREATEN - NEW COMPETITORS FROM OTHER COUNTRIES - DEPRESSION OF WHOLE ECONOMY HANSSEM

5 e-commerce 3 Before B2B Later ~90s Ability to obtain products or services through Internet using electronic payment services B2C / C2C EC Institution Network Process e-commerce elements

6 e-commerce 3 there are 9 types.: BB CC GG TWO different approaches.: B2C :: e-commerce website as just a BRIDGE between the company and the consumer e-commerce website as just a DIRECT network between the company and the consumer :: HANSSEM’s choice BC B C

e-commerce.: Special point of HASSEM 3 Clicks and Bricks strategy >> BRICKS STRATEGY separate on-line business and off-line business WHY :: Different supply chain, Different target customer furniture ONLINE HANSSEMCUTOMERS OFFLINE HANSSEM DISTRIBUTOR INTERIOR PARTENERSHIP CUSTOMERS finished goods KITCHEN INTERIOR 7

3 Running their own e-commerce site - Not using mediate company - HANSSEM mall: renewal for easy use of customers e-commerce.: Special point of HASSEM 8

3 Selling on-line only product, SAM - HANSSEM show room: off-line shop for only display 9 e-commerce.: Special point of HASSEM

3 Expand types of channels to meet customers -Smart guide:: Kitchen interior estimation consultant service through Tablet PC customers can use off-line or on-line homepage for this service 10 e-commerce.: Special point of HASSEM

11 4 Need Innovation The key to solve problems : INNOVATION ! INNOVATION Develop & Change the Retail System The Aggressive Investment to the Core Businesses The Reinforcement of the Financial Structure Trouble shooting Procedure

12 4 Need Innovation The key to solve problems : INNOVATION ! INNOVATION DEVELOP & CHANGE THE RETAIL SYSTEM THE AGGRESSIVE INVESTMENT TO THE CORE BUSINESSES The Reinforcement of the Financial Structure by using e -commerce Trouble shooting Procedure

13 4 SUCCEED DEPRESSION OF CONSTRUCTION INDUSTRY #OF TRADITIONAL CONSUMER DECREASE B2B SALE DECREASING NEW CONSUMER OR NEW BUSINESS MODEL IS NEEDED: B2C INTRODUCTION OF E-COMMERCE LAUNCH HANSSEM MALL LAUNCH THE PRODUCT SSAM

The number of visitors and revenue through e-commerce have been dramatically growing >> on-line market become a new retailer due to aggressive investment 5 1. Effects of e-commerce The Graph of the Number of visitors of HANSSEM mall & Revenue through on-line 14 Results of HANSSEM

5 1. Effects of e-commerce 15 Detail indices about HANSSEM’s e-commerce 1 :: On-line only product “SAM”, the HIT product selling roughly 30,000 sets in a month 2 :: HASSEM’s own on-line shopping mall, “HANSSEM mall” reform for customers‘ easy use 3 :: 22.5 billions of revenue through on-line in 1Q of 2012 the amazing growth by 27% comparing with 1Q in 2011 Results of HANSSEM

Growth of company (unit: 0.1billion won) Fluctuation HANSSEM Revenue6,3297, % Operating Profit % Net income % LIVART Revenue3,9545, % Operating Profit % Net income % FURSYS Revenue2,6562,7764.5% Operating Profit % Net income % BORNEO Revenue1,5281,5300.1% Operating Profit % Net income % - 1 st company in their business market - It is growing both outside and inside although competitors are in difficulties Results of HANSSEM

Growth of company The Graph of HANSSEM Operating Revenue and its Rate Operating revenue and the percentage of it are increasing >>Development of profit structure Results of HANSSEM

5 2. Growth of company Results of e-commerce The Graph of the percentage of B2C HANSSEMLIVARTENEX The Graph of the operating profit to sales ratio Better return structure comparing with competitors :: percentage of B2C (B2B is affected much by external factor and B2C leads new types of customers) :: high operating profit to sales ratio 18 HANSSEMLIVARTENEX

6 19 Further Improvement 1 :: Competitors copy HASSEM’s strategy maintaining good brand image and loyal customers 2 :: New trend of life style come out DIY, customized furniture, or furniture for single person 3 :: Become a Global company & Global companies come to Korea Localized strategy, effective management method for different countries are needed AND ::: these further improvements are solved through the concept of e-business especially e-commerce

References 7 20 − 한화증권 리서치 센터 한샘 보고서 − 660&servicedate= − − −