Inflation and a rise in interest rates are causing the consumption demand to decrease, which in return increases worries about economic recession. “Warning” signals are on even for companies that were growing over the ceiling thanks to ample liquidity and vigorous investment. With the bigger size they became through bold investment, hiring, and business expansion, some of them have gone bankrupt because they couldn’t keep up with investment attraction and a sudden drop in demand.
But there are companies who show great performance consistently even in these difficult times, reforming their structure. When the competitor is hesitant to make a bold investment, they cannot expand their business or find a new market. Following the global financial debacle in 2008, companies that rose drastically are ‘FAANG(Facebook∙Apple∙Amazon∙Netflix∙Google).’ These companies saw the risk as a chance, and they became leaders in the global IT market.
• Quickly preoccupy or have outstanding competitiveness
What companies that overcome depression have in common is that they either catch the trend, quickly preoccupy the market or have outstanding competitiveness in their business.
Going through the global financial debacle, Google figured out that offline advertising costs are quite a burden for companies and expanded their business to the online advertising market. They invested in cloud computing and OS while increasing their size through M&A. Alphabet, Google’s parent company, achieved a $257.6 million profit even in the last year during COVID 19, which is 41% higher than the previous year.
In Korea, Naver overcame the economic crisis and strengthened their position as a leading company. Preoccupying the search engine market following the “Dotcom Bubble” in the early 2000s, Naver had to undergo a global financial debacle in 2008 again, but they rose above it successfully, resulting in a bigger influence on the market. Before Naver’s split, NHN switched from KOSDAQ to the stock market in 2008 and they were able to accomplish sales higher than 1 trillion won (approx. 1 billion USD) by investing in content such as search advertisement and online gaming, consolidating their place as the top internet company in Korea.
◇ Startups rising above depression
If you look at the situation with startups, you’ll notice a lot of them are suffering from stagnant investment markets. But even among them, some startups come through with great breakthroughs. RSQUARE is one of them. Even though they are in the real estate market, receiving a direct hit from the rise in interest rates, they showed a competitive advantage. RSQUARE’s accumulated sales record from orders during Jan-Jul, 2022 reached ￦120 billion. It is far ahead of those among prop tech companies. They received an investment of ￦85 billion last year, which has been the biggest attraction of investments going to prop tech companies. Their main business was with leases/rentals of offices, but they are expanding it to distribution centers, retail, interior and remodeling as well as advancing towards PM, data analytics, consultation for buy/sell and overseas projects such as Vietnam and Singapore.
OASIA, a company that runs Oasis Market for early morning delivery services, became a rare case to of making a surplus in the e-commerce industry. Following a 5.7 billion won operating profit from last year, they are continuing their surplus streak. Sales in this year’s 1st quarter were ￦98.9 billion which is an increase of 26% compared to the same time last year with their operating profits of ￦4.5 billion which is a 171% increase. Recently, they’ve also gotten to have ELAND RETAIL as SI. With the company value of ￦1.1 trillion, Oasis Market is currently preparing to go public on the KOSDAQ.
With a profit system where the company takes 7% of a hired employer’s annual salary as a commission from a hiring company when hired, Wanted Lap was able to turn last year into a profit-making year with ￦31.7 billion in sales and ￦6.1 billion of operating profits. By the end of March this year, the cumulative number of registered users reached 2,430,000 and the monthly number of newly hired users were 1,528.
“Due to higher standard rates and economic slowdown, investors’ attentions are drawn to companies that can make surplus. Companies with a clear profit system will be able to come through the crisis.” said a person concerned in the investment industry.
Media Contact
Company Name: RSQUARE
Contact Person: Seunghyeon Kim
Email: Send Email
Country: South Korea
Website: https://brand.rsquare.co.kr/
