|Market Kurly CEO Kim Seul-ah, left, poses with CJ Logistics CEO Kang Sin-ho after signing an MOU to cooperate on delivery service, at CJ Logistics headquarters in Seoul, April 27. Courtesy of CJ Logistics|
By Kim Jae-heun
The all-time-high numbers of daily new COVID-19 cases here are helping Market Kurly with its initial public offering (IPO) plan, while some are worried about the retailer's business continuity due to its growing losses.
Market Kurly changed its IPO plan earlier this month, aiming to go public in Korea rather than the United States after receiving series F investment worth 225.4 billion won ($196 million).
The Korea Exchange's recent softening of listing regulations for the KOSPI to attract local unicorn companies also influenced Market Kurly to opt for the domestic stock market, although the retailer has to show it will swing into the black in the near future.
Market Kurly says it is a matter of time before it achieves a turnaround.
"Our sales growth has more than doubled every year and the ratio of operating loss to revenue has been decreasing gradually from 23 percent in 2019 to 12 percent last year. Excluding the investment the company attracted, our contributing profit, excluding variable costs from sales, has made a turnaround to a surplus from three years ago. Market Kurly will naturally swing into the black when the scale of economies is achieved."
The resurgence of COVID-19 infections is helping Market Kurly with its goal by increasing the number of new subscribers to the online shopping platform.
After the government adopted Level 4 quarantine measures, the toughest curb to ban more than two people from gathering after 6 p.m., new paid-membership customers for Market Kurly increased by 43 percent between July 12 and 20 compared to July 3 and July 11.
In the same period, the total number of online orders and sales volume rose by 12 percent and 9 percent, respectively.
Although, this can be seen as a passing phase, it could act as momentum for Market Kurly to improve its business continuity.
Despite the Korea Exchange's easing of the local unicorns' access here, its screening department will not allow a company to go public if it shows no signs of reducing its deficit.
Market Kurly's sales and deficit last year marked 953.1 billion won and 116.3 billion won, respectively. Its revenue skyrocketed by 123.7 percent year-on-year, but its operating loss also increased by 15 billion won in the same period.
To come out of deficit, the online groceries retailer needs to cut down its sales, general and administrative (SG&A) spending that comes mostly from delivery and packaging services.