【Fortune Korea Aug 2017】 Interview with Atomy CEO, Mr Park Han-Gill

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02 Interview with Atomy CEO, Mr Park Han-Gill

“Collaboration is the key driving force behind the company’s growth. We aim to become a company that creates a virtuous cycle by providing more jobs.”

Atomy, one of Korea’s largest network marketing company, is set to take over the industry’s Number 1 firm Amway with its revolutionary business model. The company has constantly been in the spotlight for introducing an innovative management style that promotes “Absolute Price, Absolute Quality” strategy, an inventory management system without a
procurement department, amoeba-style project management, maintaining the lowest product return and sales
management cost, etc. We met the man behind Atomy’s 8 years history, CEO Park Han-Gill at the Atomy headquarter in
Gongju city in South Chungcheong province. During the conversation with Fortune Korea, he humorously shared on
Atomy’s past, present and future.

Interview by Editor Jung Jae Woong junajung98@hmgp.co.kr Edited by Kim Byeong Joo bjh1127@hmgp.co.kr Photo by Cha Byeong Sun acha@hmgp.co.kr

Q You have recently moved your headquarter from Seoul to Gongju City in South Chungcheong province. How does it feel to move away from the hustle and bustle of the city?
It was a right move. There is less traffic and stress, and I feel more at peace. The only concern is that some people now think Atomy is a “provincial company”. Some people looking for jobs are hesitant about applying for a position with Atomy due to the company’s location. Nevertheless, I believe this would not pose a big problem once they find out more about Atomy’s business.

Q Understand you have faced many challenges in the beginning phase of this business. How did you manage the business in those days?
What I emphasised from the beginning was that a company should not have any debt. I stressed not a “daily payment”, but a “daily settlement”. My business philosophy is simply - even if the company closes down today, there should not be anyone visiting it the next day to collect an overdue payment. The challenges I faced in the past have brought Atomy to where it is today. My family suffered in the process. There were times when I could not even afford to pay for my children’s lunch. I would like to take this opportunity to thank my family for supporting me through the tough times.

Q Atomy practices a unique and revolutionary business management style. Does this also apply to the company’s inventory management?
Atomy has a unique corporate system. A good example is the absence of a procurement department. Every new product order and procurement is managed by Atomy’s “team members”. The “team members” regularly monitor Atomy’s inventory levels through the internet to ensure a healthy flow of goods. Payments for every new batch of inventory are made immediately, regardless of the sales. I see the warehouses as not a “storage space”, but where constant “interchange of goods” takes place. There should be a constant flow of products. For example, our warehouse packs about 35,000 to 40,000 boxes everyday, and they leave our warehouse within the next three days. The higher the level of your inventory becomes, the lower the company’s sales gets, and this can endanger the company’s survival in a long run.

Q Atomy’s practice of the win-win strategy with its “team members” have been positively received by many.
For every product category, Atomy works with a single supplier. We do not divide the supply of the products in each category into multiple vendors. We encourage and support them in their R&D efforts to help them improve the quality of their products or the manufacturing process. We do not push all responsibilities to the “team members” when a problem arises. Of course, there is a condition here. If the problem was cased by an unethical or fraudulent activity by the “team member”, Atomy reserves the right to dissolve its partnership with them. Atomy also builds trust with its “team members” by providing financial support. For instance, we tell our “team members” to approach us for help if they are facing financial difficulties instead of getting a bank loan. If the loan amount is manageable, we provide the sum on a no interest term. This support system allows the “team members” to trust our pricing policy 100%. Further, we do not set an yearly sales target as we feel that setting a high target only puts more pressure on the “team members” which may force them to take drastic measures to meet the target and jeopardising the trust built over the years.

Photo: June 28. Throughout the 3-hour interview held at Atomy Headquarter at Gongju city in South Chuncheong province CEO Park Han-Gill confidently shared about his pride in Atomy.

Photo: Atomy regularly organises various educational programmes such as Success Academy, One Day Seminar, Town Seminar and Side Job Seminar to support its members’ business.
The picture shows Atomy’s Success Academy that aims to provide a direction to its members on work- life balance and share on the key to success, held every month at 7 different locations across Korea.

Q We understand Atomy has set its competitors as average distribution companies, not other network marketing firms. Can you tell us more?
A legitimate network marketing business is just one of many distribution models. It is only natural that a distribution company competes against other distribution channel. Minus the stereotype about network marketing, you can understand that a network marketing business indeed a
distribution business. Atomy advocates “Absolute Price, “Absolute Quality” principle, and distributes quality products at prices lower than any other distribution channels.

Q Since its establishment in 2009, Atomy has quickly expanded its footprint beyond the domestic market. How are its overseas offices performing, and how is Atomy received worldwide?
Currently, Atomy is present in 10 countries including USA, Japan, Singapore, Taiwan and Mexico. The response we have received from the local consumers is very encouraging. The current overseas membership size is more than 1 million and we expect the overseas sales to surpass US$180 million this year.

Q What is the key to Atomy’s highway expansion in the overseas markets?
Atomy’s first key to success in the overseas markets is the “Absolute Price, Absolute Quality” strategy. A quality product with an affordable price tag works anywhere. The second key to success is collaborative culture. Atomy’s members believe that they are responsible for each other’s growth and development. Such mindset has allowed Atomy Korea members to lead the overseas members to their success. Atomy would not have been able to achieve today’s success without the support for the company’s overseas ventures by Atomy Korea members.

Q It seems like Atomy’s biggest agenda today is entering China, home to one of the largest network marketing industries in the world. How is it progressing?
China has a complex set up process for network marketing companies. Atomy has recently held a bilateral investment agreement signing ceremony with Yantai city in China. We believe that we can obtain network marketing business approval in China by 2019. Atomy will continue to operate based on its “masstige (a term that combines the words “mass” and “prestige” which refers to affordable premium goods” strategy in China. We will continue to deliver premium quality p oducts to our Chinese customers at the lowest price possible, and distribute massage products manufactured in China to other overseas markets using the GSGS(Global Sourcing, Global Sales strategy.

Q Tell us more about Atomy’s GSGS strategy.
Atomy is a global distribution company. GSGS strategy refers to selling products that are sourced globally in various markets. Atomy will continue to source products that fit its massage strategy globally and sell them to any market with the right level of demand.

Q Atomy aims to become a “small but mighty” company. What is the company doing to achieve this goal?
Atomy practises Amoeba-style project management. Any employee with a new
project idea becomes the leader of the project group and chooses his or her team
members. This improves communication amongst the members, effectively motivates
them and teaches them about the importance of challenging themselves. This is what
we call “Chutzpah spirit” - the quality of audacity that is not bound to formality and
authority. I give each and every employee an authority to carry out his or her project,
but I do not place responsibility on their shoulders. I believe that such practice will
transform Atomy into a small but powerful company.

Q Atomy has recorded the largest membership size in the network marketing industry in just 8 years. The company also has one of the lowest sales management cost. Can you share more about the key to good performance?
We strictly adhere to “Absolute Price, Absolute Quality” principle. We try our best to maintain low sales management cost to remove unnecessary costs and to keep the absolute price and quality in our products. A price point is determined by the fixed and variable costs and a sales margin. If you try to lower the cost of ingredients, it may affect the product quality. If you try to reduce the margin, it may endanger the company’s survival. The only way to guarantee the product’s quality, maintain a certain level of margin and provide a low price point is to reduce the costs. Atomy is able to perform its “Absolute Price, Absolute Quality” strategy by correctly demonstrating the above. This has also resulted in a rapid expansion of its membership.

Q You promised your members that you will give US$892,000 (10 billion won) in a forklift to Atomy’s first Imperial Master (highest member title). Please tell us more about Atomy’s member grading and compensation systems.
((Laughs) If you exchange 10 billion won to 10,000 won notes, you end up with 100,000 10,000 won notes. Each of these notes weighs 1g, so they will weigh about 100kg in total. I promised my members that I will give deliver these notes using a forklift to Atomy’s first Imperial Master. Atomy currently has 7 member grades. Some unique features are the presence of a sponsor upper limit and a one server system. The sponsor upper limit ensures fairer distribution of compensation by preventing it from being concentrated on a few specific members. One server system allows the same compensation system to apply in every country.

Q You once said selling Atomy products is a very easy task and talked about the “as I wish rule”. What is an “as I wish rule”?
The reason why many people find sales difficult is because they have to brainstorm various ways to make potential customers buy their products. Salespeople often carefully select their words when they face a potential customer. But as they speak, such concerns evaporate as the final decision eventually lies in the hands of the potential buyer. “As I wish rule” basically conveys that you do not have to worry in advance about whether the potential buy will make a purchase. You have to have a faith in the products you are selling - trust that affordable and high-quality Atomy products benefit those who buy them. Just like talking about good food or film, share your own experience using the products and leave the decision-making to the potential buyer. You will find sales much easier this way. Everyone decides whether they want to buy or ignore a product as they wish. (laughs)

Q If you are a salesperson selling Atomy products to a first-time customer, how will you sell the products?
I will tell them to first use the products without a question. I have absolute faith in my products. The customer will then choose to make a repeat purchase on his or her own. The high repeat purchase level is a testament to our healthy distribution practices and a key to Atomy’s rapid growth.

Q What is Atomy’s ultimate goal?
Atomy is a company existing for the people. As societal problems such as a high unemployment rate amongst the young generation and poverty amongst the senior citizens become more prevalent, I believe Atomy, together with the rest of the network marketing industry are able to assist in solving these issues. Atomy can help to create a virtuous cycle that involves a part of profit made by a working class to be returned to the society, instead of purchasing all lifestyle products from the conglomerates. I hope one day Atomy proves itself as a consumer-centric distribution model that can bring happiness to all its management and members, and positively influence the society.

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