'4 Trillion Club' Coway Accelerates Growth This Year with Innovative Products

Accelerating the 'New Coway' Strategy

Coway, which has ushered in the era of annual sales exceeding 4 trillion KRW, is accelerating its growth this year by focusing on innovative products. The company is also seeing results in the global market, expanding steadily following its success in Malaysia, with Thailand showing promising performance as well, prompting a continuous expansion strategy.

On the 17th, Coway projected consolidated operating results for this year with sales of 4.586 trillion KRW and operating profit of 845 billion KRW. Last year, Coway recorded sales of 4.3101 trillion KRW, an 8.7% increase from the previous year, marking its first entry into the ‘4 trillion club.’ Operating profit was 795.4 billion KRW, up 8.8%. This growth trend is expected to continue this year.

Coway explained that this is driven by the ‘New Coway’ strategy. The core of this strategy is the development of innovative products and expansion into global markets. Jangwon Seo, CEO of Coway, stated, "This year as well, we plan to accelerate the New Coway strategy centered on differentiated innovative product development and global market expansion to maintain our growth momentum." First, Coway plans to continuously launch innovative products through research and development (R&D) investments and expand directly operated stores where customers can experience these products. Coway’s innovative products are represented by the sleep and healing care brand ‘BEREX,’ first introduced at the end of 2022. Since the launch of BEREX, Coway’s rental accounts increased from 9.1 million in 2022 to 10.9 million by the end of last year. Innovative products under the BEREX brand, such as the ‘BEREX Massage Bed’ and ‘BEREX Pebble Chair,’ are credited with driving this growth.

The strategy to expand directly operated stores is also linked with BEREX. Coway, which has a ‘Codi’ organization responsible for sales and maintenance, previously did not see a strong need for offline stores. However, BEREX products like mattresses and massage chairs require customers to sit or lie down to truly experience their effects. Accordingly, after launching BEREX, Coway increased offline experience stores, operating 10 stores by 2023 and opening 9 additional stores last year. This year, the company plans to open stores even in Gangwon Province, where there are currently none, aiming to expand stores nationwide so customers can experience products anywhere in the country.

Another pillar of the ‘New Coway’ strategy is global market expansion. In 2018, overseas rental accounts numbered 1.01 million, accounting for 16% of the total, but by last year, this grew to 3.77 million, representing 34% of the total. With a compound annual growth rate (CAGR) of about 27%, the number more than tripled in five years. Based on this, Coway’s overseas sales reached 1.5452 trillion KRW last year, an 8.0% increase from the previous year. The largest market is Malaysia, with sales of 1.1584 trillion KRW. Since entering Malaysia in 2007 and surpassing 1 trillion KRW in sales for the first time in 2022, the company has continued steady growth there.

The key challenge is to discover a ‘second Malaysia.’ Thailand is seen as a promising candidate. Although sales in Thailand were 125.7 billion KRW last year and the scale is still small, the growth rate of 24.3% compared to the previous year is notable. Coway is focusing on Thailand, which is in the early expansion phase of its business, as the second Malaysia. A Coway official said, "We plan to maintain solid growth this year by focusing on global market expansion and enhancing competitiveness."