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INTERVIEW'Individuals can become sales channels'

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Joonggonara CEO Lee Seung-woo / Courtesy of Joonggonara
Joonggonara CEO Lee Seung-woo / Courtesy of Joonggonara

Joonggonara evolves from online community into IT firm

By Jun Ji-hye

Lee Seung-woo created online used goods marketplace Joonggonara in 2003 with two other friends on Naver Cafe, an online community site operated by the nation's largest internet portal.

At the time, Lee and friends collected users by contacting people, who put their used goods up for sale on various sites, one by one.

The Joonggonara Cafe soon became famous through word of mouth and has jumped to being the nation's largest platform for the sale and purchase of secondhand goods with 21 million users.

The online community was incorporated as a venture company in 2014, and is now aiming to be transformed into an IT company that offers more varied and secure services.

"I believe that Joonggonara has been able to continue to grow for a long time on the back of our trustworthiness," Joonggonara CEO Lee Seung-woo said in a recent interview with The Korea Times. "Advertising was almost our only source of revenue at the beginning, but we placed ads in limited spaces so they did not interrupt the use of the website."

About 230,000 used goods are put on sale per day via the Joonggonara platform.


Aggregate turnover at the Joonggonara Cafe, which was tallied at 1.8 trillion won ($1.5 billion) in 2016, has continued to grow every year, and is expected to reach 3 trillion won this year.

Aggregate turnover of the mobile application, which was launched in 2016, has also accelerated from 88.1 billion won that year to 460 billion won this year.

"After operating Joonggonara in the form of the online community for about a decade, we established a corporate body in January in 2014 as there were limits to the services we could offer within Naver Cafe. We also faced difficulties in managing users as the number of users has kept increasing." Lee said. "We wanted to utilize our knowhow, accumulate data and advance our services as a company."

After becoming a corporation, Joonggonara raised 8 billion won in investment from Yuanta Securities and other venture capital investors in 2015.

The company also raised 5 billion won in fresh investment from JB Woori Capital and Kiwoom Securities, and 5 billion won from NHN PAYCO in 2018.

Lee said Joonggonara, which now has about 100 employees, has put in extra effort to recruit talented developers in a bid to evolve into an IT company.

"In the past, we had low technical skills, thus were forced to contract out a lot of work to outsourced personnel," he said. "Now, our developers account for about 30 percent of the total number of employees, and we are working to develop and advance services based on our own technologies. We will increase the ratio to 50 percent."

He said dealing in used goods requires various technologies as the service needs to offer more advanced search functions and to provide accurate information about sellers' credibility and characteristics.

Joonggonara's mobile app / Courtesy of Joonggonara
Joonggonara's mobile app / Courtesy of Joonggonara
From 2016, Joonggonara has been available as a mobile app, which features the National Police Agency's Cybercop service designed to check whether any complaints or fraud cases had been reported about the sellers.

"As our developers are continuing to advance the app, we will be able to offer many desired mobile services next year," Lee said.

New business development

Over recent years, Joonggonara has been pushing to create several new businesses to generate new profits.

Among them was the Partner Center launched in April, which allows anyone to become a seller certified by Joonggonara, and sell goods through the company to 21 million users.

Those who do not have a history of fraudulent dealings can be registered as a certified seller after verifying their identity with their real name, and contact and bank account details.

Once being registered as certified sellers, they can visit the Partner Center website and simply select the goods they want to sell. Then, the goods will be displayed on the Joonggonara Cafe and the mobile app.

The company said its merchandisers put up a variety of goods, which are stored at the firm's logistics center in Gwangju, Gyeonggi Province, on the Partner Center website.

Once the goods are sold, they are delivered by the company, and sellers and the company share revenue.

"Through the Partner Center, we are aiming to encourage each user to become a sales channel," Lee said. "Once an increasing number of sellers get enjoyment from selling goods, they will continue to cultivate their own marketplaces within the Joonggonara platform, and will eventually become influential sellers with a lot of followers.

"This will create a variety of opportunities, helping manufacturers gain more profits while supporting offline-based restaurants and other companies seeking to enter the online market."

Though the company did not carry out particular marketing activities, about 800 users have already registered as certified sellers as of October.

The service has attracted enormous interest from manufacturers and home shopping companies as well as foreign investors, Lee said, noting that his company has recently drawn investment from China International Capital Corp., one of China's leading investment banking firms.

Other new businesses pushed for by Joonggonara include the used car trade.

The company made inroads into the used car market in April 2017, and opened its first offline store at Yongin, Geyonggi Province, in June this year.

About 40 imported and domestic used cars are on display at the store.

"Thirty-six used cars were sold in a month after the launch of the offline store," Lee said. "We are aiming to accumulate knowledge about the offline market and reflect this in our online business."

Lee said his company, which has so far made bold investments, is now seeking to raise the profitability and go into the black by the first half of next year.

"We have increased research and development to study ways of raising profitability and the benefits of each seller," Lee said. "Once Joonggonara becomes a fun place where anyone can earn money, this will naturally lead to the improvement of our performance and overall bottom line."


Jun Ji-hye jjh@koreatimes.co.kr


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