SEOUL, Apr. 2 (Korea Bizwire) – South Korea’s online shopping malls posted a combined operating loss of more than 700 billion won (US$661 million) last year as they have relied on excessive discounts to compete effectively with rivals in a growing market, industry sources said Monday.
The amount compares with nearly 1 trillion won of operating losses tallied in the previous year.
The losses come amid growing sales by the online retailers, which have been trying to win over consumers in the new market despite falling profitability on a short-term basis.
Coupang Inc. suffered about 500 billion won in operating losses last year, sources said.
The figure is almost the same as the operating losses in 2016, and slightly less than its losses of 560 billion won reported in 2015 and 547 billion won in 2014.
Coupang’s sales jumped to nearly 3 trillion won last year from 2 trillion won the previous year, a Coupang official said.
“Sales rose to nearly 3 trillion won last year, about 1 trillion won up from the previous year,” the official said. “The size of the losses compared to sales dropped greatly last year from the previous year.”
11st, run by SK Planet Co., is forecast to report about 100 billion won in losses on sales of 600 billion won last year, an improvement on a deficit of 180 billion won the previous year.
Ticket Monster Inc., or TMON, suffered 110 billion won in losses on sales of 350 billion won last year, a TMON official said.
WeMakePrice Inc., meanwhile, accrued 40 billion won in losses on sales of 400 billion won last year, according to a company official.
Ebay Korea is the only exception with an expected operating profit of 60 billion won on sales of 900 billion won last year, industry data showed.