A small-time con led computer firm to big-time sales

Home > Business > Industry

print dictionary print

A small-time con led computer firm to big-time sales

테스트

Song Si-mon, founder and chief executive of the computer maker Jooyontech Co., has managed the company to 15 straight years of profits, and hopes to account for 40 percent of the market over the next decade. By Choi Seung-shik

While he was a college student in 1991, Jooyontech Co. founder and chief executive Song Si-mon was hunting for something to sell.
He found it at the crowded electronics market in Yongsan ― the personal computer.
Then a senior at the International Trade school at Hanyang University, Mr. Song recalled, “Every person will need at least one computer in the future.”
At the time, any type of computer cost at least 1 million won ($1,078), whereas today some laptops are cheaper than that.


Immediately after graduation, he started selling assembled computers, marking the beginning of Jooyontech, a computer company that was listed on the stock market Nov. 15.
Some compare Jooyontech to Dell Computer, the U.S.-based, lower-priced computer vendor. Michael Dell, a 19-year-old freshman in 1984, invested $1,000 in discounted computer parts he bought from a retailer and used them to upgrade old computers. The first month of business netted $180,000 in sales. Within a decade, that leaped to $33 billion.
Dell is renowned for its build-to-order service, in which it produces only computers that customers order, removing the risk of inventory overflow. That enables Dell to cut product prices and build consumer confidence by using top-quality parts.
Jooyontech opted for a similar strategy.
Mr. Song realized the power of a large-scale sales strategy after bumping into a minor fraud artist while his business was finding its feet. In 1992, a man who claimed to be working for a government-controlled company in another city ordered 50 computers for an apartment complex he was building in the region.
“At the time, I used to sell only one or two computers a month,” Mr. Song said.
He was pleased by the order, but weeks went by without the money arriving, and Mr. Song realized he had been taken for a ride.
“But looking into the estimate I wrote for the order, I realized that ordering parts for 50 computers hugely cut costs for producing them,” he said.
Immediately Mr. Song ordered computer parts in bulk, and he was able to sell computers for 690,000 won that were usually sold at 800,000 won to 900,000 won, thanks to lower part prices. From that point on, he sold three to four computers per day even without advertising.
In 1998, right after the Asian currency crisis, the company sold 2,000 units per month and monthly sales volume soon topped 10,000 units, largely boosted by the Internet boom that swept Korea in the late 1990s.
He may buy in bulk, but Mr. Song makes it a rule to use the best parts. For motherboards, for instance, Jooyontech is always fitted with Intel or Asus of Taiwan.
The computer firm has posted a surplus for the past 15 years in a row. It is now tackling the faltering demand for desktop computers.
As part of its business strategy, Jooyontech accepts customer inquiries until 9 p.m. every day ― even during holidays and weekends. That service, Mr. Song said, is something other computer firms don’t offer customers.
He forecasts that the country’s desktop market, which now stands at 2.8 million units in annual sales, will wind up in the 2.2 million range after declining for a while.
And Jooyontech has an ambitious goal ― accounting for 40 percent of the market over the next decade, with 1 trillion won in sales.


By Kim Chang-woo JoongAng Ilbo spring@joongang.co.kr
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
s
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)