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Kurly's open market service may hurt product quality

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Grocery products in a Market Kurly delivery box / Courtesy of Market Kurly
Grocery products in a Market Kurly delivery box / Courtesy of Market Kurly

By Kim Jae-heun

Investors are voicing doubts over the feasibility of Market Kurly's move to introduce a planned open market service. They fear the service may hurt the quality of foods the online grocery service plans to deliver to customers.

Market Kurly will open its platform for individual sellers to sell their products along with items exclusively offered by the retailer.

Kurly, which operates Market Kurly, plans to go public in Korea next year after its ambitious New York listing plan received a lukewarm response from investors. The company is taking similar steps as Coupang, with both companies highlighting the faster delivery of fresh foods as their top goals.

But investors' concern over Kurly is how the operator can provide its services on a platform background. Its decision to activate the open market service follows growing calls from investors.

One of the biggest advantages of an open market is that Kurly can provide customers with a wide range of shopping choices that can help the company gain competitiveness in the intensifying e-commerce market.

"However, when individual sellers come in, Kurly cannot control the quality of the products they offer on its platform," said an industry source, Tuesday.

Specifically, Market Kurly's strengths lie in the quality of the items it sells. Founder and CEO Sophie Kim said she will directly review all the products before selling them to customers. Its business model took the concept of a "curator" that filters out bad-quality products when the retailer purchases groceries directly from a farm or manufacturer.

As a result, the main competitive edges of Market Kurly's products have been early-morning delivery and top-notch quality in terms of freshness.

Kim meets with company merchandisers at Kurly's headquarters in Seoul every Friday and tests all the products. She said earlier that the company will only introduce its open market service if quality can be guaranteed.

Another issue that Kurly will face is that its service is already offered by rival retailers here.

Local retail giants Lotte Shopping and Shinsegae introduced open markets in April 2020 and 2021, respectively, and the competition to secure new customers is fierce.

"It is most important for Market Kurly to keep its loyal customers by maintaining the current quality of the products sold on its platform. The online grocery retailer's repurchase rate stands at 71.3 percent, more than double the industry average. This comes from customers trust in Market Kurly's product quality," said an industry source.

Regarding the specifics of its open market plan, Kurly only said: "We will maintain providing the best quality products. The process of selecting products that Kurly offers to customers remains the same as before."



Kim Jae-heun jhkim@koreatimes.co.kr


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