Not a Sprint but a Long-Distance Race
Friday, January 15th, 2016
By Donna Kreutz
Twelve years ago, ChungHo purified water coolers were unknown in the United States. Today, ChungHo U.S.A. serves tens of thousands of customers and works with more than 200 dealers across the nation.
“Our vision is to make ChungHo water purifiers as ubiquitous in the US as they are in Korea,” said Founder, President and CEO Edward S. Park. He estimated that a great majority of households in his homeland, South Korea, use RO purification products over bottled water. Park said ChungHo introduced the world’s first RO POU water cooler with a built-in ice maker, so customers automatically got ice as pure as their drinking water. “I saw the market potential.”
He left his job as a vice president of an IT security company (funded by Samsung) in the Silicon Valley to launch this company with personal and private angel investments. He founded ChungHo U.S.A. on June 25, 2003 and began marketing directly to Korean-American communities in California, leveraging the power and brand recognition of ChungHo Nais, an established premium brand in Korea founded in 1993. “I personally installed the first hundred or more units throughout California,” he said. “I believe every leader must have walked the walk in order to truly understand the dynamics of the business.”
Today, ChungHo U.S.A. has three facilities, including its headquarters in Irvine, south of Los Angeles. “Our retail division operates direct retail service centers in southern and northern California, and our wholesale division operates a national dealer program serving the US and parts of Canada.” The parent company, ChungHo Group, was established with the philosophy of “promoting a healthy lifestyle for today’s society.” It currently holds several US patents and has received numerous awards for technology advancements and customer satisfaction.
Poised for rapid growth
Park said, “It’s been a tough 12 years of business development, but through perseverance and dedication day in and day out, we have managed to develop a distribution infrastructure and establish the ChungHo brand in the United States. The company is poised for rapid growth going forward. Establishing local brand recognition and product localization were the biggest challenges in the early stages of our business development. Through the natural course of organic business growth and the ability to persevere through tough economic and market conditions, we have become an established brand and are poised for expansion via accelerated market penetration, through both direct and indirect channels. We currently have 20-plus employees and expect to double in size by the end of 2016.”
He projects that over the next five years “ChungHo U.S.A. will become a dominant brand in the business-to-business marketplace, working with 500+ independent dealers throughout North America.” The company already provides products to major brands and features some 30 corporate logos on its website, including automobile dealerships, hotels, Amazon, LG, Sony and Samsung.
The company offers a complete spectrum of bottle-less water purification products that heat, chill and freeze water. All come with the built-in icemaker option that produces purified ice. “This is a unique product feature that is unparalleled in the industry today,” Park said. “This is an important differentiation for dealers because it helps them stand out from the competition and provides a value that other products do not offer.” Dealers can diversify their revenue stream with both residential and business customers by leasing, renting, selling and servicing the units. Early on, he found it beneficial to establish a solid rental base with the resulting residual income.
Growing one customer at a time
The retail division achieved success through its in-house rental/retail programs to obtain critical mass through a combination of local media advertising campaigns and regional roadshows. Once that base was well established, they transitioned into the wholesale business by launching an indirect independent dealer program. Park learned that doing business in the water cooler industry “is not a sprint, but a long distance race,” he said. “Growing the customer base still happens one customer at a time.” Testimonials on the company’s website include feedback from Kelly K., a longtime customer: “ChungHo U.S.A. units have been in my family household for 12 years. Water never tasted so amazing and pure. You can taste a significant difference between normal tap and ChungHo filtered waters. The units are incredibly, aesthetically pleasing and functional.”
The company has a culture of giving back to the communities it serves. ChungHo U.S.A. sponsors the annual Irvine Korean Cultural Festival, showcasing Korea’s customs, heritage, arts and cuisine. It also sponsors Little League to promote healthier youth and a travel baseball club with the mission of providing young players proper fundamental skills and strategies and to “develop higher baseball IQ.” Park is an avid baseball fan and regularly tweets action updates on the Irvine Tigers.
This summer, the company introduced the ChungHo Essay Contest to encourage the next generation to learn more about the importance of clean water. There were prizes for three different grade levels, from fourth grade through high school. Eighth-grader Daniel Kwon won $300 cash and an ice water purifier. He wrote, “When I first started researching facts about water, I was pretty stunned to find that we used hundreds and thousands of gallons just to make a car, or to take a shower, or even to simply make a fast-food quarter-pounder. If you leave a single 60-watt light bulb on for 12 hours, you’d also be wasting 60 liters of water.”
Park said the water cooler market still has tremendous untapped potential. “Even now, Americans predominately drink bottled water, not purified water.” Looking ahead, he expects that “in 10 years ChungHo U.S.A. will be the impetus that propels the consumer market toward purified water and ice. ChungHo is revolutionizing the way everyday people across America are drinking water and enjoying purified ice.”