Timon Achieves First Profit in 118 Months... Sets New Milestone in E-commerce

After CEO Lee Jin-won's Appointment Last Year, Focus on Reducing Costs and 'Time Commerce'
Giving Consumers the Perception of a 'Great Deal Space'... "At This Trend, Annual Profit Is Also Possible"

[Asia Economy Reporter Kim Cheol-hyun] The e-commerce company TMON's turnaround to profitability has become visible. It is expected to record monthly profits this month. This is the first profit since the service started in May 2010. Since CEO Lee Jin-won took office in June last year, the company has adopted a 'time commerce' approach, placing products sold at special prices depending on the time at the forefront, successfully securing customers who enjoy window shopping online. This is seen as a significant case of overcoming the economic recession and consumption contraction caused by the recent spread of the novel coronavirus disease (COVID-19).

According to the related industry on the 12th, TMON is expected to put an end to its deficit streak that lasted for 118 months since its founding this month. Choi Young-jun, TMON's Chief Financial Officer (CFO), said, "We expect to record monthly profits in March, and if this trend continues, annual profitability will also be possible by the end of the year." E-commerce companies have continued aggressive investments to enhance platform competitiveness despite ongoing deficits. Coupang incurs an annual deficit of about 1 trillion won, and WEMAKEPRICE's cumulative deficit reaches 370 billion won. TMON was also accumulating nearly 10 billion won in losses every month.

Jinwon Lee, CEO of TMON

TMON set its goal to turn profitable after CEO Lee Jin-won took office in the second half of last year, stepping back from the competition to increase volume and reducing costs while improving its business model to 'time commerce.' CFO Choi explained, "Online, besides shopping quickly for groceries or comparing prices to purchase products, various models can survive. TMON targets consumers who window shop filtered inexpensive products without deciding what to buy." By offering products at special prices for a fixed time, sellers can sell large quantities in a short period, and consumers develop the perception that they can purchase products at exceptional prices while browsing. To increase transaction volume, TMON avoided spending on marketing to provide discount coupons and instead created a space where consumers could make 'deuktem' (great finds), continuously attracting consumers.

This strategy began to show effects from the second half of last year, significantly reducing TMON's deficit. In the first quarter of last year, monthly losses averaged around 7 billion won, but by the fourth quarter, they dropped sharply to around 1 billion won. Although the COVID-19 situation has influenced this year, CFO Choi explained that profitability is expected to be achievable.

COVID-19, which rapidly spread last month, became a variable in TMON's plan to achieve profitability this year. Cancellations surged in travel products, which had been steadily growing. Travel products account for about 10% of total transactions, so the impact was inevitable. While orders increased due to demand concentrated in offline stores, overall consumer sentiment was also affected. TMON compensated for this with growth in other sectors. In fact, sales of essential daily items such as ramen, detergent, and bottled water in February increased more than threefold compared to the previous year.

If this performance improvement trend continues, TMON plans to actively pursue an initial public offering (IPO) early next year. Regarding last year's sale rumors, the company drew a clear line. CFO Choi said, "We expect to achieve annual profitability this year and will build and train the organization to strengthen our capabilities. We believe selling the company is better after the IPO."

This content was produced with the assistance of AI translation services.