Hanil Medical is a family-owned company that has been in business since 1982. For over three decades, the company sold to traditional markets and wholesalers, with its business being conducted exclusively through offline channels. During that entire time, annual sales never exceeded over 6 billion won (around 4.6 million dollars). The quality of their products wasn’t the issue—Hanil’s electric heating mats and bedding were made by experts with decades of experience in the field, and had a defect rate of just 0.1%—what Hanil Medical needed was a new strategy.
“Until 2018, before we joined Coupang, our core buyers were traditional markets. Even after expanding sales to major supermarkets, we did not grow any further,” said Cheol-shik Bae, the CEO of Hanil Medical, who inherited the business from his father 10 years ago. “And our main customer base was limited to middle-aged and older generations in their 50s and 60s.”
In 2019, Hanil Medical joined Rocket Delivery, and the results were immediately transformative. Sales on Coupang alone recorded 10 billion won in 2020, their first full year of business on Rocket Delivery, and overall sales hit 18 billion won—triple their previous record. “In 40 years of business, we never had turnover of 10 billion won. I still can’t believe it,” said Cheol-shik.
What accounted for such a dramatic transformation? One factor was the operational efficiencies and freedoms enabled by becoming a Rocket Delivery partner. As Coupang buys products from Rocket Delivery partners up front and handles customer service, Hanil Medical could focus on creating the best products. “With other distribution channels, there were a lot of complaints because customers had to pay shipping fees and deliveries took a long time,” said Cheol-shik. “But with Coupang’s Rocket Delivery and free returns, we could focus on product development and improvement.”
Even payments no longer were a headache, as the company could now rely on timely payments from Coupang unlike in the traditional markets, where credit transactions were common. “We sometimes didn’t receive payments of 20 to 30 million won on the low-end, and even 100 to 200 million won on the high-end, so hiring additional staff was something I couldn’t even dream of then,” said Cheol-shik.
More importantly, Coupang gave Hanil Medical an opportunity to revamp its image and products, offering a level of customer feedback to an unprecedented degree. “In the past, there was no customer contact point because we were supplying to the wholesale market, but we were able to grow after reflecting the numerous customer reviews on Coupang,” said Cheol-shik. Specifically, he wanted to expand the customer base by targeting younger customers in their 20s to 40s, and took their feedback to heart in redesigning their products. Comments such as “the color is out of style” and “please pay attention to the stitching” led Hanil Medical to release new products with patterns such as four-leaf clovers, polar bears, and reindeer, leading to a rapid increase in purchase from young customers.
As Hanil Medical has grown, so too have the benefits for employees. The company has more than doubled its employment over four years, and salaries have increased by 10 to 15% since it entered Coupang. Hanil Medical is also increasing the electric mats it donates to the elderly living alone in their town, paying the benefits forward. “We want to grow into a small but strong company that provides great benefits to its employees and creates jobs that are needed in the local community,” said Cheol-shik.
