Many observers are worried about Coupang’s continued loss-making performance, but the e-commerce unicorn -- backed by SoftBank’s Vision Fund -- has narrowed its operating loss to 720 billion won ($582.9 million) in 2019, with revenue of 7.2 trillion won, jumping 64 percent on-year.
Revenue at Kurly -- operator of grocery delivery platform Market Kurly – rose 173 percent on-year to 328.9 billion won in 2019. But its operating loss also soared 179 percent from a year earlier to 97.5 billion won in 2019.
WeMakePrice’s revenue inched up 8 percent in 2019 but its operating loss doubled due to heavy marketing costs while. WeMakePrice’s revenue and operating loss for the year stood at 465.3 billion won and 75.6 billion won, respectively.
E-commerce platforms focusing on specific areas enjoyed two- or three-digit growth in profit, proving that their focused business can be lucrative. So booming that fashion e-commerce platform Musinsa joined the list of South Korean unicorn startups in December last year.
E-commerce startups are likely to enjoy further growth this year as customers spend more time and money online amid the COVID-19 pandemic.
Fintech leader crosses W100b threshold
Viva Republica, which operates mobile fintech platform Toss, made a 100 billion won in revenue, becoming the first fintech startup to reach that milestone. Toss’ archival Kakao Pay, backed by mobile giant Kakao, also saw its revenue double from 69.5 billion won in 2018 to 141.1 billion won last year.
The difference between Viva Republica and Kakao Pay was operating losses. While Viva Republica’s operating loss widened from 44.5 billion won in 2018 to 115.4 billion won, Kakao Pay managed to reduce operating losses from 96.5 billion won in 2018 to 65.3 billion won in 2019.
It is good news for the industry that more people are using mobile payment but the bad news is that the competition is fierce. Viva Republica is vying not only with Kakao Pay but also Naver Financial, which spun off from leading Internet portal Naver to enter the financial sector. These fintech companies are gearing up to expand to other financial sectors such as securities and insurance later this year.
Delivery war turns to monopoly
Even though Woowa Brothers’ revenue grew, it went back into the red for the first time in three years due to heavy marketing costs. It reflects cutthroat competition among delivery platforms as well as new rivals such as Coupang Eats and Uber Eats and also costs for new businesses such as micro-fulfillment service B-Mart it launched last year.
Woowa Brothers, whose revenue grew by 8.6 billion won in 2019, runs Korea’s No.1 delivery app Baedal Minjok.
At the end of last year, Baedal Minjok founder Kim Bong-jin decided to sell it to Germany’s Delivery Hero in a 4.8 trillion-won deal. Now Delivery Hero, which owns the country’s No. 2 delivery service Yogiyo, and No 3. player Baedaltong, occupies 99 percent of South Korea’s delivery market.
So Woowa Brothers could feel comfortable in restructuring fees to improve financial soundness. But when the startup introduced a new fee system on April 1, it soon found itself in growing criticism from restaurant owners who said they had to face higher costs from the new pricing system.
Global hit helps
What Krafton and SmartStudy share in common is that they stole the hearts of international audience. After gaining fans across the globe, SmartStudy arm PinkFong’s “Baby Shark” song for children became YouTube’s second most viewed video earlier this year.
Krafton is the South Korean game company behind hit survival shooter game PlayerUnknown’s Battlegrounds.
Their popularity translates well onto their balance sheets. SmartStudy’s profit jumped 91 percent from 2018 to 2019 while its operating profit soared 316 percent during the same period.
Krafton’s revenue fell by almost 20 percent from a year earlier in 2019 but its operating profit rose 20 percent.
By Park Ga-young (firstname.lastname@example.org)