Even COVID-19 Can’t Stop Atomy’s Overseas Expansion

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Even COVID-19 Can’t Stop Atomy’s Overseas Expansion

Colombia, India, Turkey, Hong Kong Lined Up to Launch Later This Year

In the second half of 2020, Atomy is expected to accelerate its penetration into foreign markets.
Even the debilitating effects of COVID-19 on the world’s economy is not enough to stop Atomy from expanding globally, with plans to open in India, the second-most populous country; Turkey, a bridge between the Middle East and Europe; Colombia in South America; and Hong Kong.
If China is added to the list, Atomy’s overseas expansion in 2020 will be beyond expectations.

Colombia, Latin America’s 3rd largest direct selling market after Brazil and Mexico
Colombia, the fourth largest country in South America, borders Venezuela, Brazil, Peru, and Ecuador as well as the Caribbean Sea and the Pacific Ocean.
The gross domestic product (GDP) of Colombia was $330.2 billion in 2018 with a population of over 50 million and GDP per capita of $6651.
As the 3rd largest market in Latin America, Colombia is a member of the Andean Community and the Pacific Alliance trade bloc, which has a combined population of over 200 million.
The country has shown political stability and steady economic recovery since 2007 and has great potential for development as it is geographically positioned at the gateway to South America with a national goal of becoming a logistics hub in the Americas.
Colombia also has big potential for growth in direct selling.

According to World Federation of Direct Selling Associations (WFDSA), it ranks 17th in the world and 3rd in Latin America behind Brazil ($9.8 billion) and Mexico ($6 billion), with direct sales reaching $2.3 billion in 2018, which was up 0.4% from the previous year.
The number of direct sellers totaled 2.3 million in 2019.
High dependence on non-regular workers, a concentrated market in the service industry and certain manufacturing industries, an influx of Venezuelan refugees, and unemployment rate of 9.7% are likely to serve as a benefit to the direct selling market.

Colombia manufactures mostly intermediate goods, and because of its low production of consumer goods, the country is highly dependent on imports of durable goods and general consumer products, which is beneficial for Atomy.
But since the market is clearly divided into high and middle-income and low-income groups, a targeted pricing strategy is needed based on the gap between the wealthy and poor and their distinct living and spending patterns.
If Atomy responds proactively to the rapidly changing consumer environment and promotes cost-effective products online and through social media, Colombia could develop into Atomy’s flagship market in Latin America. 
Cosmetics and Personal Care items comprised a majority of Colombia’s direct sales at 43% of the total, followed by Clothing & Accessories and Wellness, accounted for 33% and 9% of the market consecutively.
Among the top-selling cosmetics were perfume ($579 million), oral care ($537 million), and men’s products ($517 million). The amount spent on cosmetics averages to about $79.80 per person.
Consumers in Colombia tend to purchase more perfume, skin care products, and makeup than in Korea, where base cosmetics are more popular.

Cosmetics and Personal Care items comprised a majority of Colombia’s direct sales at 43% of the total, followed by Clothing & Accessories and Wellness, accounted for 33% and 9% of the market consecutively.
Among the top-selling cosmetics were perfume ($579 million), oral care ($537 million), and men’s products ($517 million). The amount spent on cosmetics averages to about $79.80 per person.
Consumers in Colombia tend to purchase more perfume, skin care products, and makeup than in Korea, where base cosmetics are more popular.
According to the Korea Trade-Investment Promotion Agency (KOTRA), Colombia’s economic growth rate is expected to increase by an average of 3% annually from 2019 to 2022. Moreover, as prices hold steady, private spending has been projected to go up 3.7% in 2019 and 3.2% in 2020.
Researcher Chul Hee Kim from KOTRA stated, “As the middle class grows in countries such as Mexico, Colombia, and Peru, competition with Chinese and Indian products is increasing but interest in cost-effective and innovative Korean products is also on the rise.”
Atomy Colombia is currently undergoing final preparations and is set to open by the end of the year.

Hong Kong, Asia’s financial center and hub of international business

Although Hong Kong is a part of China, it operates differently and has a thorough free market economy.
It is known as Asia’s financial capital and hub of international business, but with a large portion of its industry based on services, Hong Kong is highly dependent on foreign countries.
As economic integration with the mainland accelerates, it will become a proving ground for advancing into China.
KOTRA states that unlike China, Hong Kong does not require certification processes such as sanitary permits for cosmetics distribution, so it is in a unique position to gauge consumer reaction and enhance the brand image of Atomy before launching in China.
According to WFDSA data, Hong Kong’s direct selling figures stood at $380.64 million in 2019 with over 260,000 independent sales representatives.
The average annual growth rate from 2016 to 2019 was 2.0% and its year-over-year growth was 1.9% in 2019.
Wellness was the top-selling category at 62.4%, followed by Cosmetics & Personal Care at 27.6% in 2018.
Wellness products in Hong Kong were sold primarily through supermarkets, convenience stores, and independent retailers. According to 2016 data from the Korea Agro-Fisheries & Food Trade Corporation, these three distribution channels accounted for 70%, 17.2%, and 3.6%, respectively.
Independent retailers have been growing at a rate of 15.6% annually in recent years and are becoming established as a major distribution channel for wellness products because they fill the void where there are no supermarkets or convenience stores while providing friendly and customized services.
Wellness products by function were listed as general well-being (39.4%), vision health (28.0%), brain health and memory (12.1%), digestive health (5.5%), and free-form (4.5%).
The Korea Agro-Fisheries & Food Trade Corp. stated, “The market is expected to grow thanks to a rising interest in health, busy daily life, and an aging population of consumers in Hong Kong.
The trend is changing from taking numerous pills every day to convenient multi-vitamins.”

Hong Kong’s cosmetics market is not large but it has significant implications from a strategic perspective for advancing into China.
Euromonitor predicts Hong Kong’s market size will increase by 6.8% year-over-year from $3.87 billion in 2018 to $4.99 billion in 2022.
The main products are skin care with 59.7% of total sales, then makeup 15.1%, hair care 7.2%, perfume 5.4%, bath 4.4%, and oral care 3.8%.
Moisturizers and anti-aging products are gaining popularity.
The major distribution channels are cosmetics stores with a 46.4% share, followed by department stores 18.6%, drug stores 15.1%, grocery stores 10.9%, and direct selling coming in at 5.6%. Recently, more and more consumers are seeking out Korean cosmetics, face masks in particular.
Atomy Hong Kong is preparing to open this September.
Membership registration is currently available in Korea, and more than 5000 people have already joined.

India, favorable conditions for high economic growth rate and growing middle class

With a population of about 1.38 billion people, India’s per capita income is just over $2000.
There are high hopes for India as the annual economic growth rate nears 7% and the number of consumers aged 15-59 is on the rise while the middle class is expanding.
The India Brand Equity Foundation (IBEF) projects India’s consumer market could reach $4 trillion by 2025.
The direct selling market is also experiencing rapid growth.
WFDSA data reports that India’s direct sales, which ranks 15th in the world, grew 12.1% to $24.76 billion (~2.9 trillion KRW) from 2018 to 2019, and the 3-year average growth rate was 16.3% from 2016 to 2019.
In addition, the number of independent salespeople was 5.75 million, which is less than 0.4% of the total population, showing great potential for direct selling in India.
The main products fell under Wellness at 55.0% of sales and Cosmetics & Personal Care at 27.0% as the share of household goods and durables is gradually increasing.
Wellness products and cosmetics are expected to show steady growth ahead as top sellers in the direct selling market.
With rising interest in India’s unique Ayurveda manufacturing techniques, it is worthy to note a high preference for ayurvedic products, which uses herbs similar to oriental medicine.
Moreover, interest in Korean products with a variety of lineups and great quality is also spreading by word of mouth, so Atomy can expect good results with its competitive quality and prices.
The direct selling market in India is rich in possibilities as the middle-class population is expected to reach 547 million by 2025.
Although it still ranks 15th in the world with sales of less than 3 trillion KRW, one can say that it has the potential to match China in the future.
Atomy India has completed the construction of its office in 2019 and is looking toward a grand opening in the second half of 2020.
It has already registered 65 products with more underway and expects to register more than 1 million members this year.

Turkey, an optimistic market with high unemployment and easy-to-learn Turkish

Direct Selling Market Size in Turkey
(unit: 1 million lira)
Turkey, the gateway to the Middle East and Europe, is geographically at the western end of Asia and connected to Europe. With a population of over 84 million, it had a GDP of $766.5 billion in 2018 and a GDP per capita of $9311. Online distribution is growing rapidly, and influencer marketing through social media is also expanding.
Turkey's direct selling market recorded a three-year average growth rate of 6.4% from 2016 to 2019 but in 2019, it fell by 2.8% year-on-year to $484 million with about 1.3 million salespeople.

Cosmetics accounted for 60.9% while household goods and durables made up 18.7% of sales back in 2014.
The Turkish cosmetics market is growing by more than 15% annually with hair care comprising 19.7% of the total, followed by skin care 16.6%, makeup 14.3%, and perfume 11.6%. Korean products such as BB cream, beauty masks, and cushion compacts are gaining popularity and are very cost-effective, but not yet widely recognized.
The dietary supplement market has been valued at $152 million in 2015 and is projected to expand to 255 million euros (257.4 billion KRW) by 2020.
Demand for convenient foods and foods rich in nutrients such as quinoa, chia seeds, black rice, buckwheat, and avocados has been increasing due to recent urbanization, more single-person households, and more women participating in society.
Atomy recognizes Turkey as an important entryway into Europe.
It has a high unemployment rate of almost 13%, and it is considered a brother country to Korea.
The Turkish language is also relatively easy to learn with similar grammar patterns as Korean.
Opening in Turkey is significant in that it is not only a new market but also a strategic base camp for future inroads into the Middle East and Europe.
Atomy Turkey is currently undergoing construction of its office and plans to apply for a license in July.

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