Domestic corporations in the massage industry are seeking a rebound in performance as they expand their market to public institutions such as police departments and fire stations.
However, some analysts suggest that due to the limited scale of the public market, merely expanding sales through B2G (Business to Government) transactions may not significantly improve performance.
According to the massage industry on the 28th, Bodyfriend is recently expanding its sales from B2B (Business to Business) to B2G.
In the first half of this year, the B2G transactions supplied by Bodyfriend included public institutions (38%), community centers (32%), and police and fire stations (30%). As a result, Bodyfriend's B2G sales in the first half increased by 22.3% compared to the same period last year.
Ceragem also entered the B2G market in September last year by listing its massage chair products on the Korea Public Procurement Service's comprehensive shopping mall, G2B. G2B is a shopping platform dedicated to public institutions operated by the Public Procurement Service, allowing central government, local governments, and public institutions nationwide to contract necessary goods and services. With Ceragem's listing, public sector clients such as government offices and schools are now able to lease products and receive free maintenance services for a period of 3 to 4 years.
The entry of the massage industry into the B2G market is seen as a strategy to recover from weakened performances due to domestic recession. Bodyfriend's revenue in the first quarter of this year was 100.7 billion won, a 13% decrease compared to the same period last year (116.2 billion won). Operating profit also plummeted by 88%, from 12 billion won to 1.5 billion won. Given that the first and third quarters are typically peak seasons for massage chairs, the performance is not favorable. Ceragem recorded revenues of 520.8 billion won and operating profits of 18.9 billion won in 2023, but in 2024, these figures are expected to drop to 456.3 billion won and 2.1 billion won, respectively.
In this context, it is analyzed that the two corporations are seeking to expand into the B2G market, bolstered by an increase in purchasing demand due to the enhancement of welfare for public institution workers. According to the Public Procurement Service's open procurement information portal, the number of procurement orders for massage chair rental services was only 14 in 2019, but it increased to 121 in 2020 and is expected to reach 165 in 2024.
In particular, the increase in demand in police and fire departments is notable. Bodyfriend achieved more than five times the results in police and fire stations compared to the previous year. A Bodyfriend official noted, "After introducing healthcare robots into roles with limited rest due to hard work, the welfare satisfaction and productivity of members have improved."
Some also view that the overall size of the B2G market is limited, making general performance improvement difficult. The massage market is largest for B2C (Business to Customer), followed by B2B and B2G.
The industry estimates the B2G market to be about 3 to 3.5 billion won, which is only 0.6% to 0.7% of the average annual revenue of 500 billion won for massage corporations. Given that the overall market is small, even with a high growth rate in sales, there are limitations to performance improvement.