[Untact SMEs] 'Food and Beverage AI Platform' Stepping Stone for Overseas Expansion

Small Giant Company 'Injeong F&B'
Own Mall Platform for Product, Sales Analysis, and Supplier Management
Discovering Excellent Local Producers Nationwide, Enhancing Price Competitiveness with Direct Delivery
Developed Over 70 Distribution Channels Including Online Shopping Malls and Home Shopping
Export Agreements with Over 10 Countries Including Myanmar, Thailand, and Malaysia

There are small but strong companies that have competitiveness to survive in the non-face-to-face (untact) economy and continue to grow sustainably. These companies are accelerating their response to the post-COVID-19 era by developing untact business models and pioneering new markets. Timely and swift provision of policy funds played a significant role in the scale-up of these companies. We will examine successful cases of untact SMEs discovered and supported through a system involving policy financial institutions in a total of three installments.

Kim Myung-jung, CEO of Injeong F&B, is posing next to ready-to-eat meal products displayed at the headquarters.

[Asia Economy Reporter Kim Daeseop] 'Injeong F&B,' a food and beverage (F&B) specialized vendor company located in Sinsa-dong, Gangnam-gu, Seoul, has built its own mall platform based on artificial intelligence (AI) and big data in line with the activation of the non-face-to-face (untact) market. This has served as a driving force for sustainable growth even amid difficult business environments such as the economic recession caused by the novel coronavirus infection (COVID-19).

Kim Myungjoong, CEO of Injeong F&B, said, "We expect sales to increase in the second half of this year through product and sales analysis via the F&B dedicated AI platform, supplier management, and immersive live commerce." Since its establishment in 2005, Injeong F&B has been selling agricultural and marine products as well as home meal replacements (HMR) through more than 70 distribution channels including domestic internet shopping malls and home shopping broadcasts. Last year, the sales proportion by distribution channel was highest online at 80%, followed by home shopping at 15%, and catalogs at 5%.

Injeong F&B has cooperative partners such as regional agricultural cooperatives, fisheries cooperatives, livestock cooperatives, and food companies. They discovered excellent production areas nationwide and increased price competitiveness by contracting with companies and delivering directly. They created a distribution structure so that customers can purchase high-quality products at low prices.

Injeong F&B has been recognized for its reliability to the extent of being selected as an excellent partner by major domestic home shopping companies. Consequently, sales rapidly grew from 19.4 billion KRW in 2017 to 28.5 billion KRW in 2018 and 33.8 billion KRW last year. The sales target for this year is 60 billion KRW.

The company also contributes to job creation. The number of employees has increased annually from 18 in 2017 to 21 in 2018 and 27 in 2019. This year, they plan to increase employment to about 50 employees.

Since last year, Injeong F&B has also achieved results in pioneering overseas markets by knocking on the door of exports. They have signed export agreements with more than 10 countries including Myanmar, Thailand, Malaysia, and Vietnam. Export sales in the second half of this year are expected to exceed 3 billion KRW. The Innovation Growth Support Fund received from the Small and Medium Business Corporation was a great help in the process of increasing sales and expanding exports.

Kim Myung-jung, CEO of Injeong F&B

CEO Kim said, "Thanks to the timely support of policy funds from the Small and Medium Business Corporation, we were able to build an AI and big data-based own mall platform, which allowed us to expand sales even during the COVID-19 situation. We plan to expand export volumes to overseas markets such as Southeast Asia."

The Innovation Growth Support Fund of the Small and Medium Business Corporation is used to create growth momentum for promising small and medium enterprises with excellent business performance and technology. The Corporation supports facilities and working capital necessary to enhance competitiveness such as productivity improvement and high value-added for SMEs with more than 7 years of business experience under the Framework Act on Small and Medium Enterprises. The loan period is up to 10 years for facility funds and up to 5 years for working capital. Facility funds are supported up to 6 billion KRW (7 billion KRW for companies located in provinces), and working capital up to 500 million KRW.

Kim Hakdo, Chairman of the Small and Medium Business Corporation, said, "We will actively discover and support strong small and medium enterprises in untact fields such as AI and digital technology to prepare for the post-COVID-19 era."