1. e-commerce case study IN JUNGHOON 20061117 LEE SOHEE 20100344 ESTER BAUNGRATZ 49001624 _group 13 Date: 2012.06.20

2. contents 1 1 2 3 4 5 6 7 Company and environment overview Problems HANSSEM faced::SWOT e-commerce Trouble shooting procedure Result of HANSSEM Further Improvement Reference

3. Company and environment overview 2 1 - HANSSEM Co.,Ltd. is a total home interior manufacturer since 1970 - 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 3 Selling on-line only product, SAM - HANSSEM show room: off-line shop for only display 9 e-commerce.: Special point of HASSEM

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. 16 5 2. Growth of company (unit: 0.1billion won)20102011Fluctuation HANSSEM Revenue6,3297,09313.7% Operating Profit37351638.3% Net income29339334.1% LIVART Revenue3,9545,21231.8% Operating Profit19592-52.8% Net income14470-51.4% FURSYS Revenue2,6562,7764.5% Operating Profit357341-4.5% Net income341 0.0% BORNEO Revenue1,5281,5300.1% Operating Profit111318.2% Net income16-6-137.5% - 1 st company in their business market - It is growing both outside and inside although competitors are in difficulties Results of HANSSEM

18. 17 5 2. 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

19. 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

20. 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

21. References 7 20 − 한화증권 리서치 센터 한샘 보고서 −http://sports.chosun.com/news/ntype.htm?id=201204180100132850011 660&servicedate=20120418 −http://myecobo.consumernews.co.kr/news/article.html?no=10620 −http://www.newspim.com/view.jps?newsld=20120417000282 −http://www.hanssem.com/commain.html