"Foreign Customers Missing Yeonnam-dong Showroom... Communicating Through Own Mall"

Showroom Strength Drives Annual Growth Over 30%
Yeonnam-dong Store Hit Hard by COVID Shock
Online Direct Mall Serves as 'Showroom'
CEO Heo Jun-ho's Secret: Unreserved Two-Way Investment to Maintain Brand Identity

Heo Jun-ho, CEO of Grab

[Asia Economy Reporter Cha Min-young] Since the outbreak of the novel coronavirus disease (COVID-19), Soho shops near Hongdae in Seoul have been closing one after another. 'Grab,' a women's fashion company that has operated an offline store in Yeonnam-dong, a hot place for the 2030 generation, for over eight years, also saw its store sales drop by 30% compared to the previous year. Nevertheless, Heo Jun-ho, CEO of Grab (39), remains hopeful. Although the company has grown based on offline competitiveness, an online sales channel called 'Jasamall (independent shopping mall)' has opened.

Sharp Decline in Store Sales Offset Online

Grab's Yeonnam-dong Store

In an interview with Asia Economy on the 24th, CEO Heo Jun-ho said, "Overall sales grew by 30% annually from 2016, achieving the best performance in 2018, and continued to perform well until last year. Although Yeonnam-dong store sales plummeted by 30% after the COVID-19 outbreak, online Jasamall sales have remained at the same level as before." While it is commonly said that the offline era is fading, he dismissed this as old talk. With the rise of the online era, the offline market is being newly spotlighted as a 'showroom.' It serves as a kind of playground where customers can experience and enjoy products. In fact, Grab has also opened a simple and unique store, establishing itself as the main women's offline shop in Yeonnam-dong.

Heo cited the appropriate use of both online shopping mall and offline store operations as the secret to steady growth over more than eight years. He said, "There are cases where customers first encounter products on the online shopping mall and then visit the store in person. Conversely, foreign tourists visiting Yeonnam-dong or tourists living outside the metropolitan area purchase in the store and then continue to buy from the online shopping mall." This is a case where the unique strengths of online and offline stores created synergy.

The store became famous on social networking services (SNS) and in Yeonnam-dong as a place frequently visited by famous celebrities. Currently, the official Instagram account has about 13,000 followers. Heo said, "There are famous models who tag the brand's official account on their personal SNS accounts, and there were YouTubers who visited the store and filmed themselves purchasing products even without advertising requests," adding, "We spared no bilateral investment to build an independent brand identity."

To reveal Grab's unique identity, bold attempts were made to remove sales products from the offline store and display artworks. One example is the collaboration with artist Woo Byung-yoon during the 2018 spring/summer (SS) season. For a week, Woo's artworks were exhibited throughout the Yeonnam store, and only self-produced products were sold. Given the limited space, some opportunity costs had to be accepted. However, there was a belief that it would be an important opportunity to show what kind of brand Grab aims to be.

Jasamall is Another Showroom

Grab Online Official Store

What is emphasized in operating the online shopping mall is Jasamall. This is because Jasamall is considered an online version of the showroom. He said, "It is a very effective communication channel to show customers what kind of sensibility Grab pursues," adding, "Because we have been faithful to Jasamall, we were able to grow steadily without being shaken even when policies of other platforms or portals changed."

Especially after the COVID-19 outbreak, with the decrease in foreign tourists, the importance of Jasamall was realized once again. Jasamall became a communication channel with loyal and overseas customers, confirming that his judgment was correct. CEO Heo hinted, "There are cases where foreign international students return to their home countries and purchase Grab's products or intend to resell them." Accordingly, to enable overseas customers to easily purchase products, a global mall was built and operated on the global e-commerce platform Cafe24.