SKT denies rumors it is planning to sell 11stSK Telecom CEO Park Jung-ho denied speculation that the carrier is considering selling 11st, an e-commerce platform operated by the company’s subsidiary SK Planet.
There have been rumors among industry insiders that SK Planet will spin off 11st to sell its stake to other retail companies such as Shinsegae or Lotte as it has been posting operating losses despite its high brand recognition and trading volume.
“SK Telecom is looking for ways to digitize 11st to make a futuristic e-commerce platform,” Park was quoted as saying by SK Telecom. “We have no intention to sell it off.”
Park added that the only thing the company is considering is the right strategy to make 11st grow further into a true cash cow in the future.
While 11st has already been offering artificial intelligence-based services like chatbots and image recognition-based searching, SK Telecom aims to bolster the digitization of the online commerce platform to compete with traditional brick-and-mortar marketplaces like hypermarkets and department stores.
Ultimately, the mobile carrier aims to utilize its artificial intelligence engine Nugu so customers can browse products on the platform more conveniently.
Currently only frequently purchased products can be brought through the Nugu device.
“In the future the growth of the retail industry will mainly be led by e-commerce platform operators,” SK Telecom said in a statement, adding that the spotlight has already moved over to major e-commerce firms like Amazon from traditional chains like Wal-Mart.
“Disruptive technologies like artificial intelligence, Internet of Things and big data have largely changed the consumer’s shopping patterns and it is a worldwide trend,” Park said. “By expanding partnerships with various parties in the industry, we will create the country’s leading e-commerce ecosystem.”
11st is one of most well known e-commerce platforms in Korea. According to data from Koreanclick, which measures app traffic, 11st recorded a monthly average of 8.1 million unique visitors, followed by Coupang with 6.4 million and TMON with 5.6 million.
Trade volume on the platform had also increased by a whopping 52 percent year on year during the first half of this year to 4.2 trillion won ($3.72 billion), according to SK Planet.
However, SK hasn’t been able to convert that into profit.
Last year, SK Planet posted 365.2 billion won in operating loss largely due to marketing costs spent enlarging the 11st platform, giving a boost to speculation that SK Telecom would eventually sell of the cash-consuming commerce unit.
SK Telecom currently owns a 98.5 percent stake in SK Planet, which means the loss incurred from the e-commerce platform is also a burden for the mobile carrier.
BY KIM JEE-HEE [firstname.lastname@example.org]
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