Retail technology company Kurly(컬리) posted record sales of $ 1.54 billion (KRW 2.0774 trillion) last year, the largest in its history. Its annual loss was $106.3 million (KRW 143.6 billion), down about 40 per cent from the previous year. This is the first time Kurly’s annual loss has decreased since the company was founded.
According to Kurly’s annual report released today, the company’s revenue for the fourth quarter of 2023 (hereafter referred to as consolidated) was $393 million (KRW 531.1 billion), up 5 % year-on-year. During the same period, the operating loss narrowed by 50 % to $18.58 million (KRW 2.51 billion). Notably, the company recorded positive adjusted earnings before interest, tax, depreciation and amortisation (“EBITDA”) in December for the first time since its inception. December EBITDA increased by approximately $7.4 million (KRW 1.0 billion) year on year and the positive trend has continued for three consecutive months as of the end of February this year.
Annual revenue for 2023 was $1.54 billion (KRW 2.0773 trillion), up 2% year over year. Operating loss was $106.2 million (KRW 143.6 billion), down 40% in one year. In terms of operating margin, it improved by 4.5% points (p) compared to 2022. EBITDA for the full year also increased by $70.7 million (KRW 95.6 billion).
Kurly’s performance is attributed to fundamental improvements in its cost structure, including marketing, logistics and fixed costs, as well as a sustainable revenue structure. This was partly due to the stabilisation of logistics through increased productivity at the Changwon and Pyeongtaek logistics centres, which were opened last year, and the elimination of inefficient cost execution through the closure of the existing Songpa logistics centre.
In terms of logistics costs such as transportation and packaging, Kurly saved approximately $11.8 million (KRW 1.6 billion) through improved delivery efficiency and economies of scale. Kurly reduced the unit cost of purchases while maintaining the quality of existing services. At the same time, Kurly reduced fixed costs such as IT expenses by $16.3 million (KRW 2.2 billion) and streamlined our marketing budget.
The new Beauty Kurly business and the fee-based 3Ps, Kurly Members, also contributed to the improvement. Beauty Kurly has established itself as an important business, accounting for 10% of Kurly’s total GMV. It also contributed to the improvement in profitability as it sells products with higher unit costs compared to food.
The 3P business also almost doubled year on year and Kurly’s own membership, Kurly Members, grew by 200% in the six months since its launch in August last year. The retention rate, a measure of member satisfaction, was 85%. As a result, Kurly’s GMV is expected to be approximately $2.07 billion (KRW 2.80 trillion) in 2023, an increase of 6.1% year-on-year.
“Last year, thanks to new business wins and structural cost improvements, we were able to achieve both sales growth and improved profitability amid the retail downturn,” said Jonghoon Kim, CFO of Kurly. “Now that major investments such as the construction of new distribution centres have been put on hold, we plan to focus on growth this year while further consolidating our profitability,” he also said.
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