GS Retail invests in U.S. organic food start-upGS Retail has acquired a $30 million stake in Thrive Market, a U.S. e-commerce retailer of organic food and products, the company said on Wednesday.
The investment is the largest that GS Retail has made in a foreign company so far. The Korean operator of GS25, GS Supermarket, GS Fresh and Lalavla said in a statement that the purchase was intended to strengthen its capacity in organic products and consumer data analysis.
Established in 2015, Thrive Market runs a membership program in which clients pay an annual fee of $60 and purchase organic products at a markdown of 25 to 50 percent compared to brick-and-mortar stores. The company says the price cut is possible because it directly connects manufacturers and consumers online, reducing the cost of intermediaries. The aim is to lower the barrier to organic products, which have the image of luxury in the United States.
Business has been thriving with revenue growing at an average speed of 40 percent each year, according to GS Retail. The start-up expects to rake in at least 200 billion won this year.
“We’re confident the investment will turn out to be a successful one in terms of profitability and future collaboration opportunities to create synergy with GS Retail’s existing businesses,” said Jung Chun-ho, GS Retail’s vice president in charge of strategic planning.
GS plans to sell some of Thrive Market’s products at its retail channels within the next year. “The company believed it was critical to find a supplier of high-quality organic products worldwide in order to grab the lead in the local market,” GS Retail said in a statement. The number of products sold will gradually expand.
Another attractive point for GS was Thrive Market’s capacity to analyze consumer data and suggest products according to their past purchases. The e-commerce retailer also develops products according to customer preferences.
For the Korean retailer, consumer analysis and developing ways to apply data to marketing are core tasks for the future, areas in which Thrive Market offers a reference.
The two companies are still in talks to find ways to collaborate, including a possible quarterly workshop and networking between their staff.
“We’re hoping that the investment and collaboration with Thrive Market will help us develop our data analysis system through benchmarking,” GS Retail said.
BY SONG KYOUNG-SON [firstname.lastname@example.org]
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