Shutdown Leads to New Opportunities
Gongju, South Korea
Han-Gill Park, Chairman
Clothing, Wellness, Cosmetics, Personal Care, Home Décor
Atomy has marked its presence in the global market. The direct selling company based in South Korea recorded global sales of $1.48 billion in 2020, up 13.85 percent from the previous year. It has also recently launched in China, Colombia, Hong Kong, India, and New Zealand, with branches now in 19 regions worldwide. Despite global distancing guidelines due to COVID-19, Atomy has achieved double-digit growth by actively pioneering the market. Atomy’s growth can be attributed to two factors—making a quick transition to online and securing a competitive advantage in distribution.
Making a Quick Transition to Online
The World Health Organization declared a Public Health Emergency of International Concern regarding COVID-19 on January 30, 2020, followed by the declaration of a pandemic on March 11, 2020. As the virus spread, countries were forced to implement social distancing rules to curb the outbreak. Since meeting people is such a crucial part of direct selling, this news was crippling to the industry. In South Korea, physical distancing regulations went into effect on March 22, leaving direct sellers struggling to find countermeasures against the increasing uncertainty.
Most large-scale corporate events by Korean direct selling companies were canceled. However, Atomy was able to jump on a new possibility of the “on-tact” business or meeting face-to-face online. On July 17, 2020, Atomy hosted a live broadcast of its Success Academy on YouTube. Success Academy is a monthly training and motivational event traditionally held in person simultaneously in nine locations throughout Korea, including Seoul, Busan, and Incheon, with about 15,000 salespeople in attendance.
This first online Success Academy attracted 9,000 members who greeted each other on-screen and experienced the future of online direct selling as presented by Atomy. It was the moment that Atomy’s business world expanded from offline to online with 4K resolution, seamless live broadcasting, and business tools using VR technology. By August, participants numbered 13,000 globally, and sales were on track, as indicated by the company’s growth in 2020.
Executive Director of the Korea Direct Selling Industry Association, Tae-Oh Kim, stated, “Due to COVID-19, the direct selling industry has no choice but to think about contactless business. Atomy will become a benchmark for other companies in regard to eliminating constraints of time and space through on-tact business practices.”
Atomy’s ability to adapt quickly to online direct sales was due in part to broadcasting technology capabilities that the company had already built up for its Success Academies, which had been live-streamed to different locations. However, Atomy’s unique way of doing business also played a large role.
Its large-scale business presentations and motivational events are all directly organized by the company. There are no fees to participate, and accommodation is offered at less than cost pricing. Business tools are also provided below cost, so salespeople can focus on the scene of their businesses, whether it be at small meetings or personal gatherings set up by a center or leader.
“The company sets up the business environment so that our salespeople can concentrate on building their businesses,” explains Kyung-Hee Kim, Marketing Director of Atomy. She adds, “Atomy aims to create conditions for everyone to succeed through collaboration, not competition.”
Securing a Competitive Advantage in Distribution
Another factor driving the growth of Atomy is its “Absolute Quality Absolute Price” motto. During the CEO Council meeting for the World Federation of Direct Selling Association in Mexico City in 2019, Atomy Chairman Han-Gill Park highlighted that direct selling must have a competitive edge in the distribution industry to survive.
Chairman Park shared how his company has grown into a global corporation exceeding $1 billion in sales in such a short time. He also spoke about the future direction of the direct selling industry that has been stagnant in recent years. Park emphasized, “Direct selling companies have the advantage of being able to curate high-quality products for its consumers.” He also stressed, “It is very important to realize that direct selling can win with quality and price over discount stores, online retailers, and other platform businesses.” In this meeting attended 20 key figures in the industry.
Founded in 2009, Atomy established its motto of “Absolute Quality Absolute Price” from the very beginning. It means aiming for higher quality for the same price and a lower price for the same quality. As a result of challenging other distributors and appealing to consumers equipped with this motto, Atomy has recorded an annual growth rate of 47 percent for 11 years. It also boasts the highest number of registered members and lowest rate of returns in the Korean direct selling industry. This indicates that putting distribution competitiveness ahead of business opportunities leads to success.
Chairman Park says that focusing on securing a competitive advantage is a smart marketing strategy. If you have good products at a low price, consumers will come on their own initiative. If the number of consumers purchasing competitive products goes up, profits also increase for its direct sellers. This works better than simply concentrating on compensation based on sales and performance activity.
Unstoppable Global Expansion
Atomy launched in the USA in 2010 and posted sales of $5 million the following year. Atomy USA has continued to grow annually, with sales increasing tenfold to $55 million in 2020 merely a decade after opening. As a result of prioritizing a competitive edge in distribution over business opportunities, “Absolute Quality Absolute Price” has proven to be effective even in the United States, the world’s largest direct selling market.
One of the strongest assets of direct selling is the mutual trust formed between salespeople and their customers.
The company’s global expansion has been unstoppable. After making its international debut in the USA, Atomy quickly advanced into the direct selling markets of Japan and Canada in 2011. Now, in just ten short years, Atomy has established branches in all parts of the world, including Southeast Asia, Russia, China, India, Australia, and Mexico, and will soon open in the U.K. The network marketing industry in Korea, which had no prior success entering into foreign markets, started paying attention to Atomy’s global expansion. Han-Gill Park emphasized in an earlier interview with Korean media that if everyday products are good and cheap, they will sell anywhere. He also said, “Atomy is not competing with other network marketing companies, but with other distribution channels such as department stores and home shopping.”
In April 2021, Atomy has over 15 million members in 19 regions. It also plans to open in Brazil, Kazakhstan, and Kyrgyzstan this year and aims to reach sales of $2 billion. “The year 2021 will be the first year that sales outside of Korea will surpass domestic sales,” noted Hyun-Woo Lee, Managing Director of Atomy Global Business. He says, “Global Atomy is a consumer-centered direct selling company that plays a part in competitive distribution.”
At a Crossroads
Direct selling is standing at a crossroads and not solely due to the effects of COVID-19. Advances in technology have given consumers access to a wealth of information that was unavailable in the past. Substitutions for products sold exclusively by direct selling companies can now easily be searched for and purchased online at low prices. This trend will only intensify over time. Moreover, even when COVID has passed, daily routines may not return to pre-pandemic conditions, and much of day-to-day life will continue online. Therefore, direct selling must also find online solutions.
One of the strongest assets of direct selling is the mutual trust formed between salespeople and their customers. Unfortunately, this advantage is only half-realized online. No matter how advanced virtual reality becomes, it will never have the same effect as physical meetings and face-to-face communication. Now, direct selling must involve both online and offline management.
Without skipping a beat, Atomy was able to embrace contactless business opportunities and use its products of Absolute Quality Absolute Price as a competitive advantage to see success in the face of the COVID crisis. Atomy’s growth is a welcoming sign, and its future is full of promise.
Young-Min Lee is the former editor of Nexteconomy which is a Korean direct selling industry magazine and currently serves as the editor of the Atomy company magazine.
From the August 2021 issue of Direct Selling News magazine.