Coway, the leader of luxurious home appliances, advances into the Malaysian market (Dec. 6, 2006)



''Malaysian consumers are ready to accept wellbeing paradigm to pursue a healthy living. They have a well-developed market for water filtration systems and the market for air purifiers and water softeners keeps on growing.” Coway has decided to enter into the Malaysian market after preparation for over a year. The advance of Coway into Malaysia is expected to cause a great change to the Malaysian water filtration device market that is mainly dominated by call sales and rental marketing. Malaysians have a great need for filtered water, as they distrust tap water that is supplied in poor quality.

Coway plans to use Malaysia as the outpost to the Southeast Asian market.

According to a survey about drinking water, 45% of Malaysians drank bottled water, 36% filtered water and 16% tap water in 2006. This trend, however, began to change recently, and use and sales of water filtration devices is on the increase. In addition, as over 60% of water filtration systems are sold through door-to-door sales in Malaysia, Coway, which has accomplished a great success in the type of sales in Korea, has another chance of a great success in Malaysia. Using the advantage that the company found through its own market research, the company plans to take a marketing strategy aimed at middle and upper class. The price level of Malaysia is about 80% of Korea, but its market for high-priced items is similar to that of Korea. Considering such conditions, Coway works out a premium marketing strategy and deems it worthwhile to challenge the market. Coway has strived to raise customers' satisfaction with service of the company through the development of service type suitable to Malaysian conditions by tailoring to local conditions the service know-how it has developed in Korea. Having found that Malaysian consumers have much complaints about high price paid for poor service system, Coway decided to introduce CODY service system that has worked well in Korea to Malaysia.



The company has selected Malaysians as CT (Coway Technician) who takes charge of CODY and customer supports, and has been training them in service and technology. In addition to this, the company opened showroom as sales store in a bid to put products to the market. Coway Malaysian subsidiary will operate rental and lump-sum-payment system just like in Korea, but the prices will be adjusted to the local market prices. The local subsidiary will begin selling with water filtration systems and air purifiers, and then extend the items to bidets and water softeners. Local middle and upper classes have relatively high needs for water softeners and considering the custom of Muslims who wash hands after easing nature, it is estimated that there would be high potential demands for bidets.

There are four dealers, Diamond, Amway, Nesh, Delcol, competing over the water filtration market estimated at 210 billion Won as of 2005. Diamond, the top seller, holds a market share of 32% and increased sales more than 40% since it introduced rental marking through a benchmark of Coway in 2005. In the market, Coway, which originated rental marketing, is expected to accomplish a great success by showing its know-how and expertise in the field.

To the opening ceremony of its Malaysian subsidiary, Coway invited local press and politics figures in addition to company officers and Koreans concerned with trade and industry of over 20, including Coway CEO Joon Kee Hong, Overseas Business Division Chief Inchan Yee, Malaysian subsidiary chief Jaeyoung Park, Deputy Secretary of International Trade of Malaysia, Korean ambassador to Malaysia and Director of KOTRA Malaysian Office. Following the opening ceremony, Coway held a launching event with the theme ''Wellbeing” from Dec. 1 to 3, thus demonstrating abroad that Coway lead the business of luxurious home appliances. Following the opening its office in Kuala Lumpur, Coway will open more offices in Petaling Jaya, Penang and Johor Baru by May next year.

Demands for air purifiers and water softeners as well as
water filtration devices sharply increase.

The local subsidiary targets at 50 million ringgits (equivalent about 13.5 billion Won) in 2008 and 70 million ringgits (equivalent to about 19 billion Won) in 2009, and enlarge the market to Singapore, Indonesia and the Mid-east. Malaysia is the fourth overseas market of Coway after China, Japan and Thailand, and it will be used as the outpost to the Southeast Asian market. ''We expect a great success in the Malaysian market, as Malaysia suffers much from poor water quality, so has a potential, great demands for water filtration systems. The desire for healthy living and wellbeing ensures the successful advance of Coway into Malaysia,” said Coway CEO Joon Kee Hong.



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