KTH and KT M-House Merge... "Leap to a Digital Commerce Specialist Company"

KT Mhouse, Strength in Mobile Coupons

[Asia Economy Reporter Minyoung Cha] KTH and KT M-House are merging to become KT Group's specialized digital commerce company.

On the 30th, both KTH and KT M-House held board meetings and resolved the merger plan. The surviving entity after the merger will be KTH, with a merger ratio of approximately 1 to 13.3, meaning 13.3 new shares of KTH will be allocated for each share of KT M-House. After regulatory approval for the corporate merger and a shareholders' meeting around May next year, the merger is planned to be completed by July 2021.

If this merger is successful, the commerce business capabilities of KTH, a leading T-commerce operator, and KT M-House, which has strengths in mobile coupons, will be combined to more proactively respond to the rapidly changing market competition environment.

The new integrated company is expected to create customer value through the distribution infrastructure owned by KTH, including product procurement, marketing, delivery, and management, as well as KT M-House's 30,000 corporate clients and 90,000 offline franchise stores. Additionally, based on KT Group's strengths in artificial intelligence (AI), big data, and cloud technology, it plans to build a differentiated commerce business model.

KTH's T-commerce service, 'K Shopping,' which was first introduced domestically, recorded an average annual growth rate of 30% over the past three years. Sales and operating profit also grew at average annual rates of 19% and 37%, respectively, achieving high growth. However, as the TV home shopping market has reached saturation, competition among companies has intensified, prompting active digital transformation (DT) efforts beyond TV to mobile commerce and other areas.

The merger target company, KT M-House, is an early player in the mobile coupon market and the number one company in the mobile coupon B2B market, with sales of its mobile coupon 'Giftishow,' based on differentiated marketing know-how and IT expertise, surpassing 500 billion KRW this year. Through differentiated customer service, its average annual sales and operating profit increased by 17% and 21%, respectively, over the past three years. Building on this, it has expanded into the commerce market by launching the limited-edition sneaker resale platform 'Ripple' service beyond the mobile coupon business.

CEO Iljae Lee of KTH stated, “The two companies, which have operated businesses centered on TV shopping and mobile coupons, share the common denominator of strengthening ICT-based commerce competitiveness and will grow into a massive digital commerce platform to realize customer value. Through this merger, we will thoroughly prepare for the digital transformation era and accelerate growth by seeking new opportunities.”

CEO Jungyong Moon of KT M-House said, “This merger will be an opportunity not to settle as the leading player in the mobile coupon market but to continuously implement new customer-centric commerce businesses and realize a bigger dream of changing the commerce market landscape.”

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