Timon Eases Burden Significantly, Aiming for Profit Turnaround This Year

Disclosure of Sales Performance Under New Standard Reflecting 2019 Discontinued Business Losses... Sales 175.1 Billion KRW, Operating Loss 75.3 Billion KRW

[Asia Economy Reporter Kim Cheol-hyun] E-commerce company TMON has disclosed its performance for last year by applying conservative accounting standards in preparation for its initial public offering (IPO), counting only commission revenue, which is the actual operating income. This is a new standard audit report reflecting the suspension of direct logistics services such as the mart business last year. Although the sales scale significantly decreased compared to the previous year, it is interpreted as reflecting the company's intention to focus on strengthening its fundamentals by improving the quality of earnings.

On the 29th, TMON (CEO Lee Jin-won) announced through a new standard audit report reflecting the loss from discontinued operations in 2019 that it recorded sales of 175.1 billion KRW and an operating loss of 75.3 billion KRW. Sales significantly decreased compared to 497.2 billion KRW in 2018, which is a result of the business structure reorganization carried out last year. TMON attempted to improve its business structure by shifting to a healthy sales structure while actively implementing the 'Time Commerce' strategy last year. To this end, it boldly discontinued loss-making businesses such as the mart business. The sales of 175.1 billion KRW and operating loss of 75.3 billion KRW disclosed in this audit report are figures calculated based on net sales from commissions and other advertising, reflecting the loss from discontinued direct logistics operations. Before reflecting the loss from discontinued operations including direct purchase sales, sales were recorded at 672.1 billion KRW, a 35.2% increase compared to the previous year.

The reason TMON adopted conservative accounting standards while foregoing visible sales scale is analyzed as a strategy to focus on improving profitability and strengthening financial soundness rather than competing to expand its size in preparation for the upcoming IPO. Based on this, TMON was able to record its first monthly profit in March this year and is also targeting an annual profit. Industry insiders expect TMON to prove this sustainable profit structure to the market and aim for listing next year.

The driving force behind TMON's ability to improve its profit structure is the 'Time Commerce' strategy. By offering products at special prices for a fixed period, sellers can sell large quantities in a short time, and consumers develop the perception that they can purchase products at exceptional prices while browsing TMON. Operating this 24 hours, TMON has continuously developed time stores such as '10-Minute Attack' and '100-Second Attack.' According to TMON, as of the fourth quarter last year when Time Commerce was fully implemented, the number of partners participating in special deals at time stores increased by 42.4% compared to the first to third quarters, and among them, partners generating sales exceeding 100 million KRW also increased by 16% during the same period.

Lee Jin-won, CEO of TMON, said, "Last year can be called the first year of a complete transformation for the next 10 years of profitable management," adding, "A company must be able to generate profits on its own, and based on this, sound investment and growth follow. We will prove at TMON the task of turning uncertainty and doubts about profitability in the e-commerce industry into trust."

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