A spring Lotte ☕
Retail giant Lotte is acquiring Joongganara, Korea’s largest online ‘reseller’ platform, for $100 million. The deal comes just days after Shinsegae’s E-mart announced its partnership with Naver to boost joint e-commerce initiatives.
Backstory: Joongganara is Korea’s prime virtual destination for ‘pre-owned’ goods. From luxury goods to cars to video games, close to 400,000 items are posted daily on Joongganara’s mobile application and their Naver cafe. The company made over $4 billion in sales revenue last year, riding the pandemic e-commerce boom.
In comparison, brick-and-mortar giant Lotte Shopping saw sales shrink 9% (to $14 billion). In an attempt to revive the chaebol’s dynamism in the digital era, CEO Hee Tae Kang is putting together a task force to get online, faster and better than its competitors. Between the group’s department stores, supermarkets, hypermarkets, electronics-focused hi-marts, and home shopping channels, Lotte has over 40 million membership subscribers.
Bottom line: Data is the new oil. And Lotte has access to a lot of it. Lotte ON is using AI to analyze online and offline data from the group’s seven retail affiliates to make product recommendations. While Lotte has struggled to keep up with the likes of Naver and Coupang, the company is aggressively making a comeback.
Lotte was amongst the players putting in bids for eBay Korea. If they win, Lotte will reign as the largest e-commerce company in Korea.
Fun fact: Lotte Internet Department Store, launched in 1996, was Korea’s first online shopping mall.
The Sneakers Game
Backstory: The platform was spun-off from Naver in 2019 in response to what the internet giant saw as the ‘resell trend’ amongst the MZ (millennial and Z) generations. KREAM is operated by Camp Mobile, the Naver subsidiary in charge of LINE, SNOW and BAND. From a meagre $57 million investment, KREAM has grown into a $240 million dollar revenue generating machine.
Big picture: “Pre-owned” is all the hype. Korea’s reseller market is worth over $20 billion dollars, up more than five times since 2010. Sneakers are the most popular and lucrative product category in the resellers market. It’s estimated to be worth $2 billion, and expected to grow to $6 billion by 2025.
To give you a sense of how it works: Nike’s “Air Force 1 Para-Noise” sneakers, designed in collaboration with K-pop star G-Dragon, were released for $200 last winter. The value of these limited edition shoes has skyrocketed, with some selling for $11,000 on various online resale markets.
Looking forward: KREAM has garnered its user base by providing real-time market prices and hiring professionals to authenticate products. The fresh capital will be used to build out the platform’s digital infrastructure, including the introduction of an AI-driven pricing mechanism.
On the radar
Companies raising over $1 million last week.
Mildang is raising $10 million in a Series B deal from Coolidge Corner Investment for their AI-driven language learning platform.
Team02 (Carmore) is raising $9 million in a Series B deal from Bon Angels Partners for their car rental price comparison platform.
My Chef is raising $9 million in a Series B deal from AIM Investment for their meal kit service platform.
April Bio is raising $9 million in a Series C deal from Yuhan Bank for their anti-bodies biotechnology.
The Check is raising $9 million in a Series A deal from Mashup Angels and Strong Ventures for their integrated sales and personnel management platform.
Qraftec Technologies is raising $9 million in a Series A deal from Smile Gate Investment AI-driven asset management platform.
Welt is raising $5.3 million in a Series B deal from POSCO and Smile Gate for their personalized digital therapeutics solution.
Caran is raising $5 million in a Series A deal from IBK and Mega Investment for their business automotive servicing platform targeting enterprise customers.
Hu Master is raising $2 million in a Series A deal from Shinhan Alternative Investment Management and Ark Impact for their anti-pollution humidifier.
More Seoul Hits
Hyundai’s ready to plug & charge. The company is setting up high power charging stations across the country in preparation for the launch of Hyundai Ioniq 5 and Kia EV6.
New diversity rules for boardrooms. Under the new Capital Markets Act, Korean board rooms will start getting more femme energy.
K-dramas are so real. SKT's over-the-top (OTT) service Wavve is ramping up investments to produce original content in an attempt to overtake Netflix. But Netflix is doing the same to keep its lead.
Where's the best donkkaseu (돈까스) in Seoul?🥩
We vote for a little hole-in-the-wall place in Mangwon-dong, that also serves divine udong (우동). You can find it here.