“Despite the declining birth rate, the baby product market in Korea has grown by 10-20% every year, driven by premium products. Significant changes are taking place both in scale and quality.”
According to data from Statistics Korea, the total birth rate in Korea in 2020 was 0.84, a record low for four years in a row since 2017, but the baby care market is soaring despite the current situation.
In this regard, Korean companies are showing active movements in this market, pronounced more in the software sector than in the hardware sector.
YLABS is a resident company in Digital Contents Center Growth Support Center. With the launching of the baby product experience review service LOMA BOX, it is gaining enormous popularity from the MZ generation that has newly emerged as the major consumer group. MZ generation is a group sensitive to trends and familiar to digital consumption. As this group became adults and started families, customized childcare services using AI have become popular.
AVING News had a non-face-to-face interview with YLABS CEO Yoo Jong-woo, and listed to the company’s secret to success of LOMA BOX.
Q1. Company introduction
YLABS is a venture certified company specializing in childcare customized service. It was established in June 2017 with the goal to provide a better baby care environment. Our main product LOMA BOX is a baby product experience service. It analyzes customer reviews acquired from the app with AI technology to provide customized baby products and childcare information by age groups.
Since its launch in early 2020, LOMA BOX exceeded one billion won in sales and 460,000 accumulated inflows, establishing itself as a must-have item for mothers in childcare. We are recognized for our potential to succeed with the designation as a promising export SME by the Ministry of SMEs and Startups and also as a BLUE 100 company in Anyang-si.
Also, estimating sales of three billion won this year, we will build a platform in 2022 so that we can promote the baby products and products for moms and dads made by Korean SMEs to Southeast Asia.
Q2. Who are your sales and business target?
Our primary customers are pregnant women to moms with babies of up to 24 months old. We are going to expand to moms with toddlers who are five to six years old. We are also going to expand our product line to products for moms and dads, in addition to baby products and services. We are currently giving out LOMA boxes to postpartum care centers, local governments, and large corporations to increase brand awareness.
Q3. How did you come up with LOMA BOX?
The current trend of leaning towards eco-friendly and high-quality products, sample packs, user reviews, and mom influencers have become new influencers in the childcare market. Currently in the childcare market, there are many review websites for baby products, but it is not easy to get the information consumers want because there are so many advertisements that are disguised as reviews. To solve this problem, we have opened a review collection website where you can share actual user reviews.
LOMA BOX is our baby product sample box with the aim of collecting reviews from real users, and we are going to utilize the childcare customized service as the basic data. Our review system is very strict. It is registered only when the users enter the detailed information about the child’s growth status and physical details, so advertisements are blocked in advance.
Currently, we have about 11,800 review data, and we are analyzing it by applying it to AI technology. After that, based on the opinions of external parenting experts and the internal data analysis team, we created customized childcare service that provides information on the best baby products and childcare methods by age and physical characteristics.
Q4. How competitive is LOMA BOX?
We are analyzing data obtained from our own sample boxes, review websites, and online malls with AI technology. Based on the analyzed data, we provide customized services according to children’s age and physical characteristics. This is what differentiates us from competitors that post advertisement reviews. Also, we concluded a supply contract with a baby product manufacturer at the lowest price, so we are highly price-competitive.
Q5. How did you do in the Korean market after launching?
After launching LOMA BOX, we had accumulative sales of one billion won, 460,000 accumulated visitors, and average daily visitors of 1,000. For 2021, we are aiming for 30 billion won in sales and 100,000 data on baby products.
Also, we have been recognized for the business’s growth potential and technological prowess, and this led to attracting seed investment from Korea Venture Investment Corp in 2020. We were also selected as Anyang Blue100 company to receive 200 million won in funding for the next five years. We are discussing crowdfunding (security type) in August 2021 and Series A investment by the end of 2021.
Q6. What is the growth potential of the Korean baby product market?
Despite the declining birth rate, the baby product market in Korea has grown by 10-20% every year, driven by premium products. Significant changes are taking place both in scale and quality. As millennial parents and the golden kids era meet, the demand for ethical distribution process and high quality without harmful ingredients is increasing.
This will lead to actual user reviews and quality verification, which is expected to further increase the influence of the online community. Going beyond just information sharing, we are expecting that the interest in customized services based on AI technology will increase significantly.
Q7. Do you have plans to enter the global market?
We are aiming to enter the Southeast Asian baby product market by 2022..
Recently, we were selected as a “Ho Chi Minh Shared Office Member” by NIPA by exporting our baby product samples two times, local market research, and making promotion video in Vietnamese. We were also designated as a promising export SME from the Ministry of SMEs and Startups in 2021. By developing our own technology and utilizing our baby product mall LOMA Mall, we are developing the platform that connects Korean SME’s baby products with consumers in Southeast Asia, where the birth rate is much higher than us.
Q8. Lastly, do you have any future business plans and major issues?
Currently, our second-hand baby product transaction app, LOMA Mall, review website, and customized childcare service are separated. But by 2022, we are going to integrate them all and implement the first childcare platform LOMA in Korea.
You will be able to find everything about childcare in LOMA, ranging from baby products, childcare community, second-hand shop, and customized childcare information in this one-stop service. We are always going to care about our customers’ childcare needs and step beyond baby product e-commerce and provide the childcare curation commerce where customized solutions can be given.
YLABS is a resident company of the Digital Contents Center Growth Support Center hosted by the Ministry of Science and ICT (Minister Lim Hye-sook) and operated by National IT Industry Promotion Agency (President Kim Chang-yong) and Next Generation Convergence Contents Industry Association. The company is currently selected for the Advanced Startup Program by the Gyeonggi Contents Agency.
LOMA BOX 1 – Diapers | Courtesy of YLABS
LOMA BOX 2 – Wet tissue | Courtesy of YLABS
LOMA BOX 3 – Masks | Courtesy of YLABS