11번가: 6 Months of Surging Profits in the Open Market - What’s Behind This Success?

11번가's Open Market Business: Six Months of Consistent Profit - What Drives This Growth?

The open market has never been this competitive, but 11번가 has just achieved something remarkable: six consecutive months of operating profit in its open market business. If you think that’s impressive, you're right. This e-commerce giant has managed to transform potential setbacks into opportunities, even turning challenges like the settlement delay crisis into a springboard for success. But what’s the secret to their triumph, and what lies ahead?

A Strategic Shift: From Crisis to Confidence

Back in August, 11번가 announced a 150 billion KRW improvement in operating profit compared to the same period last year. This surge wasn’t just in their open market sector but extended across their entire business, with a 300 billion KRW improvement overall. This remarkable turnaround occurred despite the challenges posed by a settlement delay crisis in August, which shook the foundation of trust between sellers and customers.

But instead of crumbling, 11번가 fortified its position by introducing measures that not only restored trust but boosted engagement. One standout initiative was their "Safe Settlement" program, which was designed to ensure timely payments to sellers, safeguarding their cash flow. They also introduced promotional events aimed at assisting affected sellers, winning over countless customers in the process.

Seller and Customer Growth: A Success Story

One of the biggest success stories to emerge from this period is the rise of small business sellers. Thanks to 11번가's "Original Seller" program, which offers zero commission fees for sellers until they hit 10 million KRW in sales, participation soared. Notably, in July and August, despite the ongoing crisis, sellers in the program saw a 45% increase in monthly payment transactions and a 53% growth in product sales compared to the monthly average for the first half of the year.

Moreover, the trust established with customers during this time was palpable. A "Good Company" promotion in August showcased businesses that upheld their delivery promises despite facing settlement delays. Customer response was overwhelming, with some sellers experiencing up to a 100-fold increase in transaction volumes. One seller’s sales increased by an astounding 40 times, demonstrating the impact of maintaining trust in the face of adversity.

Surging Customer Numbers and Engagement

It wasn’t just sellers that benefited from 11번가’s actions. In August, new customer signups surged by 23% compared to June, just before the crisis hit. Furthermore, according to Mobile Index, 11번가’s monthly active users (MAU) in August jumped by 100,000 to a total of 7.7 million, securing their position as the second-largest player in the industry.

Innovative Services: Setting a New Standard

Looking ahead, 11번가 plans to continue its aggressive customer acquisition efforts. One key initiative is the launch of their "Club Membership" program, which targets specific customer segments with personalized benefits. For example, they recently rolled out the "Beauty Club," offering tailored perks for beauty product shoppers, and the "Campus Club," which provides exclusive deals for students.

The success of the "Beauty Club" has been immediate. In the 11 days following its September 1st launch, participating sellers saw a 51% increase in transaction volumes compared to the previous month. Another notable innovation is the "Family Payment" service, which allows one designated "Family Representative" to pay for orders placed by up to four "Family Members." Within just three weeks of launching this service on September 2nd, the number of families using it has grown 2.3 times.

What's Next for 11번가?

As 11번가 wraps up the year, they’re focused on enhancing customer convenience and maintaining their positive profit trajectory. They aim to build on the momentum created by the launch of services like the "Family Payment" and further expand their "Club Membership" offerings to attract even more customers.

But perhaps the most important takeaway from their story is the resilience and adaptability they've shown in the face of adversity. The trust they’ve rebuilt with both sellers and customers isn’t just about solving short-term issues—it’s a foundation for long-term growth. With a combination of innovative services, customer-first strategies, and a keen understanding of market dynamics, 11번가 is well-positioned to continue its upward trajectory.

NK