WeMef lost 54 billion won, 11Street lost 9.8 billion won, what happened to Korean e-commerce?

South Korea's online shopping market has grown rapidly due to the increased demand for non-face-to-face shopping caused by the new coronavirus, but some e - commerce companies are still losing money . Despite the expansion of the market size, the number of operators has also increased, and competition in South Korea's e-commerce is becoming increasingly fierce .

According to data released by the National Statistics Office on the 4th , South Korea 's online shopping transactions last year amounted to 16.11 trillion won, an increase of 19.1% from 2019 , with transactions for catering and household goods also increasing to 48.3% and 44.1% respectively .

Last year, mobile transactions also exceeded 100 trillion won for the first time , with mobile shopping transactions reaching 10.87 trillion won, up 24.5%, a record high.

However, most e-commerce companies are facing losses because some companies have made large-scale investments in order to monopolize the market.

WeMef announced on the 3rd that its sales last year reached 386.4 billion won, a 17% decrease from the previous year, and its operating loss was estimated at 54 billion won.

A Wemef official said: “Due to the epidemic, overall sales have increased, but most of them are concentrated in daily necessities and food, while sales in areas such as fashion and travel, where the company has an advantage, have decreased.”

For 11Street, sales increased 2.8% from last year to 545.6 billion won, but operating income was a loss of 9.8 billion won . Although sales increased slightly due to increased non-face-to-face demand, the company had difficulty controlling costs due to declining performance in the travel and fashion industries and the state of emergency in South Korea , resulting in an operating deficit.

An 11Street official said: "As the demand for online shopping increases, the e-commerce industry has also benefited. The demand for daily necessities and food has surged, but the demand for fashion , beauty, travel, and accommodation has dropped significantly. In order to stand out from the crowd of e-commerce platforms, a large amount of marketing expenses have been increased, resulting in increased costs. "

In addition, industry insiders predict that Coupang will have accumulated a deficit of 4.5 trillion won as of last year. However, there are some data showing that Coupang's transaction volume increased significantly last year, and the proportion of products purchased directly through Rocket Delivery was higher than other companies .

An industry insider said: " South Korean e-commerce companies have benefited from the epidemic , but in fact , except for large companies, the performance of many companies is lower than expected. 2020 is both a growth and crisis for the e-commerce industry. As the market expands, the number of e-commerce companies is also increasing. Companies should continue to accumulate experience, improve their competitiveness, and get a share of the e-commerce market."

South Korea

E-commerce

Loss