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🇰🇷 11st's Bold Shift to Profitability

Korean e-commerce platform 11Street’s open market crosses break-even level - Pulse by Maeil Business News Korea
11st Shifts Focus to E-commerce Amid Financial Struggles

11st is prioritizing profitability, even to the extent of terminating new business ventures it embarked on just two years ago. The company's focus is now firmly on enhancing its e-commerce operations.


End of MyData Service

11st recently announced the discontinuation of its MyData service, "Moneyhanjan," which it had launched in October 2022. This service aimed to consolidate financial information from various sources such as banks, card companies, and fintech firms. Initially, MyData was a strategic move to secure a new revenue stream, but it failed to meet profitability expectations.

Despite efforts to expand the service, including the launch of "Moneyhanjan Consumer Research Lab" to analyze user data and provide shopping trends, the venture did not deliver the desired financial results. This decision reflects the management's strategy to focus on the more profitable e-commerce sector, especially in the face of fierce competition from Coupang, AliExpress, and Temu.


Ongoing Financial Challenges

11st has consistently grown in the e-commerce market, but profitability has been elusive. Last year, the company recorded its highest-ever revenue of 865.5 billion KRW, a 9.7% increase from the previous year, yet it still posted an operating loss of 125.8 billion KRW and a net loss of 131.3 billion KRW. The company has faced continuous losses since its spin-off in 2018, with the pandemic exacerbating the situation.

The company's strategic shift from an open market model to a direct purchase model, while increasing transaction volumes, has also significantly raised operational costs. In 2023, the company's operating expenses nearly reached 1 trillion KRW, with a substantial portion attributed to product purchases.


Focus on Core E-commerce Business

Amid these challenges, 11st is intensifying its focus on its core e-commerce business. The company aims to enhance profitability by boosting user acquisition and expanding B2B services like "Shooting Seller." The goal is to achieve a turnaround and return to profitability by next year.

CEO An Jung-eun has emphasized a resolute approach to navigating these difficult times, aiming to deliver top performance and foster a collective effort among team members to overcome the current financial hurdles.


Future Prospects and Potential Sale

The prolonged financial difficulties have put 11st in a precarious position. It failed to meet its IPO commitments to financial investors, raising the possibility of a forced sale by SK Square. The company's valuation has dropped from 2.7 trillion KRW to about 500 billion KRW over five years.

Despite these setbacks, 11st remains focused on reversing its fortunes. The company aims to leverage its strong e-commerce base, improve profitability, and avoid a forced sale scenario. The management is committed to navigating through these challenges and achieving a successful turnaround.

11st's decision to end the MyData service underscores its strategic shift towards its core e-commerce operations, aiming to improve profitability and secure a stable financial future.

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