E-commerce firms post gains

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E-commerce firms post gains

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Workers at a Coupang logistics center. [JOONGANG ILBO]

Earnings reports from local e-commerce operators showed varying degrees of success last year as they all retooled their business models to stay competitive in Korea’s cutthroat online shopping realm.

Coupang, the industry leader by market share, posted 1.9 trillion won ($1.7 billion) revenue, 73 percent more than the previous year, in an earnings report released Friday. Its operating loss, on the other hand, deepened slightly, to 560 billion won from 547 billion won.

Since last year, Coupang has been moving away from the business model it started with in 2010, a Groupon-like platform that offered daily discounts and deals, to focus on its open market platform that connects consumers directly with small retailers. It terminated the daily deals service in February, acknowledging its low profitability, and shored up investment in delivery services for its social commerce platform.

The company built two logistics centers in Incheon and Gyeonggi last year and expanded its free Rocket delivery service that sends select items to customers within 24 hours. It now operates all across the country, with 85 percent of packages delivered by staff the company itself hires and maintains.

“Coupang moves with a big picture and long-term focus,” a company spokesperson said. “Instead of easily predictable small attempts, we are making big challenges to offer something that customers have never experienced before. For that, we invest boldly.”

WeMakePrice, which still operates a daily deals service, showed the biggest improvement in its earnings last year. It reduced operating loss by 55.3 percent from the previous year, posting a 63.6 billion won loss. Revenue jumped 70.5 percent to 369.1 billion won.

The company has pursued a strategy of offering the lowest prices on certain daily necessities like powered milk and baby diapers to compete against other e-commerce sites.

“WeMakePrice is going to further enhance the company’s profitability by concentrating on a few select strategies,” CEO Park Eun-sang said. “We will continue to boost sales and try to give back the profit generated from pursuing a ‘cheapest rate’ strategy to consumers.”

WeMakePrice added that its monthly transaction volume surpassed 300 billion won in March for the first time since the company was founded in 2010.

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TMON, the smallest of the three e-commerce operators, expanded its revenue 46 percent to 286 billion won last year, but its operating loss also increased 12 percent to 158.5 billion won.

The daily deals service operator chalked up the loss to investment in a new business segment. Last year, TMON expanded its Super Mart service, which used to handle only daily necessities, to frozen food and fresh groceries.

TMON also added an airline ticket price comparison service to its range of offerings. Before, it used to only provide discounted hotel rates and tickets to museums, amusement parks and tourist spots. TMON entered partnerships with major travel agencies in Korea including Hana Tour, Mode Tour and Interpark Tour to help customers compare ticket prices.

“TMON invested 60 billion won to businesses that will drive the company in the long run and differentiate TMON from others,” the company said in a statement.


BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]

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