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Kurly Inc., the operator of grocery delivery platform Market Kurly
South Korea’s Kurly Inc., the operator of grocery delivery platform Market Kurly, achieved 641.7 billion won ($511.6 million) in gross merchandise value (GMV), or total sales monetary value of online retailing, during the first quarter of this year, up 49.2% compared with the same period of 2021, according to e-commerce sources on Thursday.It compares with the 11.8% increase in the local online shopping GMV during the same period. Online retail giant SSG.COM saw a 23% rise and Gmarket Global, formerly eBay Korea before conglomerate Shinsegae Group acquired in 2021, had a 14% decrease in GMV in the same period. This will boost Kurly’s initial public offering this year, market watchers say. The grocery delivery service provider applied for a preliminary review of its IPO in March and waiting for the Korea Exchange’s approval. Kurly's GMV has steadily grown up, logging 160 billion won in 2018, 450 billion won in 2019, 1.2 trillion won in 2020 and 2 trillion won the last year. “The 641.7 billion won GMV in the first quarter means buying fresh food online has become new normal,” a Kurly official said. “We believe consumers will keep purchasing groceries online in the post-pandemic,” the official added. Kurly’s quarterly contribution margin, the selling price per unit minus variable cost per unit, has been positive since 2019. Kurly’s operating profit will be in black once the contribution margin is over fixed costs such as equipment and labor costs. However, some market watchers say the company’s labor costs should be regarded as variable costs and not fixed costs. Kurly employs its in-house delivery professionals, and its labor costs for the delivery workers increase in line with rising sales. To address the labor costs issue, Kurly has introduced a so-called curated marketplace service for non-food items. Through the service, the product manufacturer takes responsibility for storage and delivery of the items and Kurly only checks the product quality. In a bid to accelerate the service operation, Kurly is set to launch online payment system “Kurly Pay” this year, which will facilitate sales and delivery payments to the manufacturers. Kurly’s IPO is expected to take place in July, becoming Korea’s first e-commerce platform to go public this year, to be followed by Shinsegae Group’s SSG.COM and Oasis Corp. Founded in 2014, the unicorn startup garnered market attention with “dawn delivery” service, which delivers products by 7 a.m. the next day if customers order before 11 p.m. on the previous day. Last December, Kurly raised $210 million from Hong Kong-based private equity firm Anchor Equity Partners in pre-IPO funding, valued at 4 trillion won. However, Kurly’s performance the last year failed in easing investors’ concerns over its IPO plan. The company posted an operating loss of 217.7 billion won last year, up 87.2% from the previous year, according to its annual report in April. Selling and administrative expenses soared 79% to 511.3 billion won, overwhelming the gross profit of 293.5 billion won. By Seok-Cheol Choidolsoi@hankyung.comJihyun Kim edited this article.
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