SEOUL, May 1 (Korea Bizwire) — While the overall domestic industry is in a slump due to the spread of the novel coronavirus infection, some companies have benefited from changes in consumption patterns.
For companies specializing in household goods and home interior, COVID-19 has actually been a boon, and these companies are the envy of other industries for their outstanding performance in the first quarter of this year.
In the household goods industry, LG Household & Health Care Ltd., a major South Korean cosmetics and household goods maker, is attracting attention by remaining profitable despite the tough economic climate.
Although the growth rate in the first quarter was not large at 1.2 percent in sales and 3.6 percent in operating profit, analysts say that this is a respectable performance given the market conditions.
The company said its sales of household goods expanded by 19.4 percent on-year to 479.3 billion won (US$393 million), while operating profits for the sector grew 50.7 percent to 65.3 billion won.
The better-than-expected sales came on the back of demand for sanitary products such as hand sanitizer and wet tissues.
Unlike cosmetics, household goods also benefited from non-face-to-face consumption under COVID-19 due to their large share of online sales.
Aekyung Industrial Co., another household goods and cosmetics maker which started diversifying its portfolio by releasing sanitary products earlier this year, is also seeing growing expectations for its performance.
In fact, daily average sales of hand sanitizers and hand sanitizing tissue released by Aekyung in late January soared 25-fold and 37-fold, respectively, around the Lunar New Year holiday, the beginning of the spread of the virus in South Korea.
Meanwhile, interior companies were also given special treatment as the entire nation has been advised to stay at home. Because social distancing is dragging on due to telecommuting, interest in home decoration increased.
Hanssem Co., a major South Korean manufacturer of furniture, saw its sales rise 11.5 percent on-year to 493.5 billion won in the first quarter of this year.
Operating profit fell 9.2 percent, but the market is said to have done well due to social contribution to overcome COVID-19, reduction of agency rent, and quarantine support.
In particular, its house remodeling brand Hanssem Rehaus has driven positive results.
Some companies have benefited from domestic travel, which has been in demand as the spread of COVID-19 has effectively blocked overseas trips.
Hotel booking app Yanolja said reservations for accommodation in South Korea rose 128 percent on-year in the first quarter of this year, and leisure reservations also rose 144 percent.
Yanolja has a large domestic share, with domestic sales reaching 270 billion won out of its total 300 billion won in sales last year.
H. M. Kang (email@example.com)