[Company Insight] Curly Ultimately Delays Initial Public Offering

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Securing New Growth Engines Including Beautycurly Launch

[Asia Economy Reporter Park So-yeon] Kurly is a platform company operating 'Market Kurly,' a fresh food delivery service founded in 2015 by CEO Kim Seul-ah, a former Goldman Sachs analyst. It pioneered the dawn delivery market with its 'Saetbyeol Delivery' service, which allows customers to receive products at their doorstep before 7 a.m. the next day if they order food before 11 p.m. It is a pioneering company in the domestic dawn delivery market. Recently, it has expanded its presence in the e-commerce market by launching the beauty platform 'Beauty Kurly.'

Market Kurly started with sales of 2.9 billion KRW at its founding in 2015 and achieved over 500 times sales growth in seven years. As of 2021, the transaction amount through this platform exceeds 2 trillion KRW.

In July 2021, Kurly was recognized with a corporate value of 2.5 trillion KRW and became a unicorn (a private company valued at over 1 billion USD). In December of the same year, it attracted a pre-IPO investment of 250 billion KRW from Anchor Equity Partners, valuing the company at 4 trillion KRW.

As of the end of 2021, the cumulative number of customers surpassed 10 million. The number of customers increased 200 times in seven years. Since about 65% of the products handled are food items, and households tend to subscribe as a unit rather than individuals, it means approximately 10 million households are subscribed. This number is similar to the total number of households in the metropolitan area as of 2018.

The repurchase rate is 75%. The repurchase rate is an indicator of customer loyalty. The repurchase rate, calculated based on the proportion of new customers in a given year who purchase products again within the same year, was 61.2% in 2019, 65.2% in 2020, and 75% in 2021. This means that 7 out of 10 new customers return to purchase from Market Kurly again.

The monthly active users (MAU), which measures customer usage rates for online-based companies, also records high numbers. According to Mobile Index's announcement in June last year, Market Kurly's MAU was 3.56 million. The online food market is growing rapidly every year. Especially after COVID-19, consumer trends changed drastically, leading to steep growth in the online food market. According to global management consulting firm AT Kearney, the online food market exceeded 30 trillion KRW two years ago and is expected to steadily grow to 70 trillion KRW by 2025.

Saetbyeol Delivery Service Expanded to Chungcheong and Yeongnam Regions

A point to note is the online penetration rate. The online penetration rate refers to the proportion of online transactions within the total consumer market. As of 2021, the online penetration rate of the entire consumer market was 36%. The online penetration rate for the food sector is lower than the industry average at 25.2%. This suggests that about 75% of the online food market remains untapped. It is expected to exceed 30% in 2023.

Kurly is actively investing in IT system construction, logistics operation structure introduction, and talent recruitment. Currently, Kurly operates logistics centers in Songpa and Gimpo and is preparing to secure additional logistics centers in Changwon and Pyeongtaek. The Saetbyeol Delivery service area has also significantly expanded from the metropolitan area to include Chungcheong, Daegu, Busan, and Ulsan.

The IT workforce has also increased significantly. New businesses include Off-Kurly, Kurly Pay (tentative name), curated markets, exports to Singapore, and expansion of third-party delivery services. The proportion of non-food items in Market Kurly's product lineup has gradually increased from the low 20% range in 2020 to about 30% in 2021 and 35% in 2022. Market Kurly is expanding non-food products by leveraging its curating capabilities. In November last year, it launched the beauty platform Beauty Kurly. Most global beauty brands such as Est?e Lauder, La Mer, and MAC officially joined Beauty Kurly. These are representative luxury brands that were previously only available at department store first-floor stores, now brought online. Each brand supplies products directly. Leading K-beauty brands such as Sulwhasoo, Hera, and O Hui have also joined in large numbers.

Overcoming deficits and entering the stock market remain challenging tasks. Market Kurly recorded operating losses of 98.6 billion KRW in 2019, 116.2 billion KRW in 2020, and 217.7 billion KRW in 2021. Although sales rapidly increased due to growing dawn delivery demand, initial investment costs such as logistics center construction were high. Investment for business expansion over a certain period is inevitable. Delivery labor costs are also higher than during daytime, and inventory management costs for fresh food are substantial.

However, with Coupang, which initially faced deficits, recently turning profitable, positive expectations for Market Kurly's long-term growth and business viability are emerging. The immediate challenge is to succeed in going public. Kurly received preliminary review approval for listing from the Korea Exchange on August 22 last year, with validity until February 22 this year. To proceed with demand forecasting and public subscription, the securities registration statement must be submitted by late January to early February at the latest. However, the company suddenly postponed the listing on the 4th, judging that it would be difficult to receive a fair valuation amid the stock market downturn.

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