Cafe24, Continued Revenue Growth in Core Business

[Asia Economy Reporter Jang Hyowon] IBK Investment & Securities analyzed that although profitability improvement at Cafe24 is slow, sales growth in its core business continues.

On the 27th, Lee Minhee, a researcher at IBK Investment & Securities, stated in a report, "Last year's fourth-quarter performance met sales expectations, but profitability fell short of market expectations due to increased fixed costs from the expansion of supply chain services (fulfillment, product supply, etc.) and continued investments."

Cafe24 reorganized its business structure into EC platform, infrastructure, and others. The EC platform consists of payment solutions, EC solutions (SMS, domain, etc.), business solutions (CS, operations, sales agency, etc.), supply chain services (fulfillment, product supply, etc.), and marketing solutions (advertising, consulting, etc.).

The researcher explained, "Notably, the core businesses, payment solutions and EC solutions, grew by 23% and 38% respectively last year, significantly exceeding the company's overall sales growth rate of 14%, driving top-line growth. The ratio of shopping mall transaction amount (GMV) to revenue is also on the rise, indicating ongoing efforts toward high value-added services, which is positive."

He added, "According to Statistics Korea, the domestic online shopping mall transaction amount reached 161 trillion won last year, growing 19%. Although Cafe24's GMV growth in the fashion and accessories sectors, which were nearly half of its portfolio and adversely affected by COVID-19, was sluggish, the rapid growth in non-fashion sectors such as daily necessities and food led to an overall GMV increase of 18%."

Furthermore, he said, "Considering this year as the year when consumption activities normalize after vaccine distribution, despite a slowdown in the non-fashion sector, a 16% growth driven by fashion recovery seems possible. Cafe24's sales are expected to grow by 15% this year," he added.

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