IPO Race in E-commerce... Losing Momentum Amid Stock Market Decline

Curly·SSG.com·Oasis Market
Struggling Amid Sharp Decline in Comparable Companies' Valuations
Food Service Industry Prioritizes Survival Over IPO
Moms Touch Voluntarily Announces Delisting

[Asia Economy Reporter Lim Chun-han] As SSG.com, Kurly, and Oasis Market accelerate their initial public offerings (IPO), they find themselves in a difficult situation due to a simultaneous global stock market downturn. Typically, underwriters determine the offering price by referencing the price-to-earnings ratio (PER) or earnings before interest, taxes, depreciation, and amortization (EBITDA) of comparable companies with similar business models, but the valuation of peer companies has sharply declined. The dining industry has experienced an overall slump due to the prolonged COVID-19 pandemic, causing IPO news to disappear.

According to industry sources on the 26th, Kurly is expected to become the first e-commerce company to list on the domestic market. Recently, Kurly has been fostering an IPO atmosphere by announcing performance incentives such as stock options for all employees. In October last year, Kurly selected NH Investment & Securities, Korea Investment & Securities, and JP Morgan as joint lead underwriters. Recently, it attracted a pre-IPO investment of 250 billion KRW from the Hong Kong-based private equity firm Anchor Equity, recognizing a corporate value of 4 trillion KRW. The industry expects Kurly’s valuation to reach between 5 trillion and 7 trillion KRW at the time of listing. On the 12th, Kurly CEO Kim Seul-ah held a town hall meeting with employees and set a transaction amount target of 3.2 to 3.3 trillion KRW for this year. Last year, Kurly expanded its dawn delivery service nationwide to regions including Chungcheong, Daegu, Busan, and Ulsan, and expectations were raised by the introduction of an open market service.

SSG.com selected Citigroup Global Markets Securities and Mirae Asset Securities as lead underwriters in October last year. SSG.com’s valuation is expected to reach the 10 trillion KRW range, surpassing the market capitalization of its parent companies Emart and Shinsegae. Ahead of its listing, SSG.com is expanding its scale. Last year, it acquired the fashion platform W Concept and officially launched its open market service. Additionally, SSG.com’s domestic e-commerce market share was around 3%, but following Emart’s acquisition of eBay Korea, its market share rose to the 15% range.

Oasis Market is the only profitable company among the three preparing for listing, with a corporate value estimated around 1 trillion KRW. Oasis Market selected NH Investment & Securities as lead underwriter in August last year and Korea Investment & Securities in June this year, appointing CFO Ahn Jun-hyung as CEO. The company plans to expand the number of offline markets from about 50 to 100 within the year to increase scale and enhance online-offline synergy to boost net profit.

The dining industry has focused on survival rather than listing due to damage from strengthened social distancing measures. Initially, as the dining industry grew significantly, companies such as bhc, Caffe Bene, Nolboo, The Born Korea, Ediya Coffee, and Twosome Place pursued IPOs. However, since the listing of Kyochon F&B in 2020, only Korea 105 (Cheogajip Yangnyeom Tongdak) is currently pursuing an IPO.

Mom’s Touch, the largest hamburger franchise company in Korea, voluntarily announced delisting. Mom’s Touch reportedly judged that maintaining its listed status was not beneficial amid difficulties expanding franchise stores due to the prolonged COVID-19 pandemic. In particular, as specific performance data was disclosed, conflicts with franchisees intensified based on that information. Early last year, franchisees formed a franchisee council in protest against the headquarters’ unilateral raw material price increases. The company notified the store manager of Sangdo Station, who led this movement, of contract termination and stopped supplying raw materials, leading to legal disputes. Mom’s Touch is also undergoing an on-site investigation by the Korea Fair Trade Commission for alleged violations of the Fair Franchise Transactions Act.

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