Sales fell 17% and 12% respectively, and the development of Korean e-commerce WeMakePrice and TMON suffered setbacks

South Korea's e-commerce industry has benefited greatly from the impact of the COVID-19 pandemic, but WeMakePrice and TMON may not be able to smile anymore!

The lower circle of reverse growth

According to the latest data from the National Statistical Office of Korea on the 20th , in terms of share in the domestic e-commerce market , Naver (18.6%), Coupang (13.7%), eBay Korea (12.4%) , 11th Street (6.2%), WeMakePrice (4.3%) and TMON (3.1%).

The total transaction value of the Korean e-commerce market increased from 135 trillion won in 2019 to 161 trillion won in 2020. Naver Shopping's annual transaction volume increased by 43% from about 21 trillion won in 2019 to about 30 trillion won in 2020. Coupang's sales in 2019 were about 7 trillion won, but in 2020 it was about 14 trillion won, doubling in one year.

While leading e-commerce companies such as Coupang and Naver have expanded their scale and taken the lead due to the epidemic , WeMakePrice and TMON's sales have shown reverse growth , and have not made any progress but have regressed, further widening the gap with these top players .

WeMakePrice's sales fell from 465.3 billion won in 2019 to 385.3 billion won in 2020, a decrease of 17% in one year. The same is true for TMON, whose sales in 2020 were 151.2 billion won, a decrease of 12% from 172.2 billion won in the previous year.

The two companies explained: "The overseas travel and performance ticketing divisions, which are major sales divisions, were hit by the epidemic, resulting in a decline in performance." In addition, declining consumer confidence in the relatively strong fashion category also contributed to the decline in sales.

The only consolation is that the scale of the deficit of these two e-commerce platforms has been reduced. WeMakePrice's operating loss in 2020 was 54 billion won, an improvement of 29% from 77.5 billion won in the previous year. TMON's operating loss in 2020 was 63.1 billion won, a decrease of 15% from 74.6 billion won in the previous year.

E-commerce tends to be more inclined towards upper-tier enterprises

The problem is that revenue growth is slow and market share continues to decline, so they can no longer focus solely on reducing deficits. Faced with their own lagging situation, the two platforms have also taken corresponding measures.

TMON began to expand the scale of the public market through the "sales fee -1% policy", and increased traffic by attracting more sellers and selling commodity groups, preparing for the successful completion of the IPO in the second half of the year. WeMakePrice was not far behind, and launched a series of combined punches such as appointing new representatives, investing in technology development platforms, and announcing "single-piece delivery".

However , a researcher at a securities company said : " Unlike other offline distribution companies such as supermarkets , the larger the e-commerce market , the more it tends to favor companies in the upper circle. "

Therefore, some industry insiders have observed that although WeMakePrice and TMON have made such efforts, the trend of leaning towards upper-tier e-commerce companies such as Naver and Coupang will become stronger in the future. And this may be a difficult transformation process for middle- and lower- tier companies !

South Korea

E-commerce

Sales