Summary
- Revenue Growth: CJ Olive Young(owned by CJ Corp, 001040:KS) reported a 41% YoY revenue increase in 2Q23.
- Card Transaction Data: Aicel Technologies’ card transaction data indicates heightened transaction volume and increased average spending per transaction for Olive Young.
- Market Reshuffle: The exit of competitors like LOHB’s and Lalavla has benefited Olive Young.
- Promotional Events: Significant increases in transactions during Olive Young’s flagship promotional events.
- IPO Potential: Consistent business growth fuels speculation about a potential IPO.
Introduction
CJ Olive Young, a health and beauty (H&B) retail subsidiary of CJ Corp, has demonstrated remarkable growth in recent quarters. This article explores the factors contributing to this success, leveraging card transaction data from Aicel Technologies to provide insights into the company's performance and the potential for an IPO.
Revenue Growth and Market Reshuffle
Impressive Revenue Increase
CJ Olive Young (owned by CJ Corp, 001040:KS) reported a 2Q23 revenue of KRW 968 billion, marking a 41% YoY increase. This growth follows a substantial 42% increase in revenue during the first quarter of the year. Aicel’s consumer transaction data indicates that spending at CJ Olive Young continued to rise throughout the first half of 2023, driven by both heightened transaction volume and an increase in average spending per transaction.
Benefiting from Market Changes
Despite an overall contraction in the cosmetics market due to the reverse base effect from last year’s substantial growth, Olive Young's distinct expansion stands out. The company has benefited from the market reshuffle triggered by the shutdowns of competitors LOHB’s and Lalavla in 2022. Given that a significant portion of the cosmetics sold at Olive Young consists of products from indie and mid-low priced brands, this trend could accelerate the performance growth of small to medium-sized cosmetics and OEM companies.
Promotional Events and Card Transaction Data
Flagship Promotional Events
Significant increases in transaction data have been observed during Olive Young’s flagship promotional events, known as the ‘Olive Young Sale’, which take place in March, June, September, and December. These events, associated with a culture of ‘hoarding’, contribute to a steadily elevated basket price.
Emphasis on Mobile and Online Sales
Particularly noteworthy is Olive Young’s emphasis on mobile visitors and the further development of the ‘Today’s Dream’ delivery service. This strategy has driven rapid growth in online sales, resulting in a consistent rise in the proportion of online transactions within total sales. Olive Young offers complimentary delivery for orders above KRW 30,000 through the ‘Today’s Dream’ service, which contributes to higher online basket prices. The expansion of online sales not only helps alleviate fixed costs but also significantly contributes to Olive Young’s revenue growth.
IPO Potential and Market Speculation
Withdrawal and Future Plans
Last year, Olive Young withdrew its IPO plans, citing market conditions. However, as the largest H&B store continues to demonstrate consistent business growth, the potential for enhancing its corporate value and successfully reentering the public market has been capturing public attention.
Strategic Implications
For professionals in hedge funds and asset management, leveraging Aicel's card transaction data offers a strategic advantage in assessing CJ Olive Young's growth and IPO potential. Detailed insights into transaction trends and market performance are crucial for making informed investment decisions.
Conclusion
CJ Olive Young's impressive revenue growth and strategic initiatives highlight the company's strong market position. Aicel Technologies' card transaction data provides critical insights into these trends, helping stakeholders understand the dynamics and future prospects of CJ Olive Young, including the potential for an upcoming IPO.
