Entered 2024.03.29 18:34 Modified 2024.03.29 20:18 Ground A13
‘Transaction fee 0 won’ Carrot Market
Profit after 8 yearsNeighborhood advertising sales drive performance
36 million ‘National Used Trading’ App
Pioneering advertising in 800,000 local stores
Sales more than doubled last year
Carrot Pay and overseas subsidiaries continue to lose money
Photo = Carrot Market Official BlogCarrot Market achieved its first annual surplus in 8 years of its founding. Advertising sales, which more than doubled from the previous year, drove performance. The number of local stores using Carrot advertising exceeded 800,000 at the end of last year. A characteristic of Carrot local advertising is that it can target nearby users based on their living area. It is evaluated that the local advertising market, which had been fragmented offline, such as leaflet distribution, was successfully converted to online.
○ Carrot, which has been in deficit for 10,000 years, turns into a surplus for the first time
Carrot Market announced on the 29th that it recorded sales of 127.6 billion won and operating profit of 17.3 billion won last year through its region-based platform Carrot. In 2022, it turned from an operating loss of 46.4 billion won to a surplus. Sales more than doubled from the previous year (KRW 49.9 billion). This is the first time Carrot has made a profit since its founding in 2015. Carrot, with a cumulative subscriber base of 36 million, is called the ‘national used goods trading app.’ Its characteristic feature is that it does not charge a separate second-hand transaction fee. This is in contrast to the global second-hand trading platform Poshmark, which charges a 20% commission per transaction. For this reason, at the beginning of last year, there were many concerns that Carrot, which promoted free services, could fall into a swamp of long-term deficit as it could not find an appropriate profit model. An investment industry official said, “We succeeded in gathering tens of millions of users, but there was great concern and interest in the industry as to whether we would find an answer to linking this to profits.”
Carrot found its breakthrough in local advertising. Local restaurants, beauty salons, gyms, etc. used a strategy to move the local advertising market, which had been operating offline by distributing flyers, to online. We have launched a product that can target advertising to users on a regional basis, such as at the town/myeon/dong level or customers within a 5-minute walk (300m radius of the store). A company official explained, “Carrot’s local advertising is a business model that did not exist before,” adding, “It was highly competitive because local advertising, which had been segmented mainly offline, was moved online.”
Advertisers rushed to place advertisements in response to the carrot of 36 million cumulative subscribers. Last year, the number of Carrot advertisers and executed advertisements doubled compared to the previous year. In addition to small neighborhood stores, large brands such as Coupang and Baskin Robbins also began running regionally targeted advertisements.
○ “We need to diversify our profit models”
Carrot Market expects to further expand the advertising market by connecting various local businesses. In addition to used trade, the Carrot app has various categories open, including direct used car trade, direct real estate trade, and tutoring. When each category is activated, more accurate target advertising becomes possible. Just as Kakao diversified its business areas into games, pay, taxis, etc. based on KakaoTalk traffic, Carrot Market is also trying out various regional services to find new sources of revenue.
There are also predictions that it will not be easy for Carrot to establish itself as a comprehensive regional portal. This is because there are platforms specialized in these areas, such as Zigbang for real estate and HeyDealer for used cars. Another challenge for Carrot is to diversify its profit models. Last year, advertising sales accounted for 99% of all carrot sales.
Sales of Carrot Pay, a subsidiary that continues to suffer losses, and overseas subsidiaries must also be boosted. Carrot Pay, a region-based simple payment service, had a deficit of 7.7 billion won last year, down from the previous year (8 billion won), but is not making a profit. Carrot’s Canadian and Japanese subsidiaries also recorded operating losses of 7.4 billion won and 3.2 billion won, respectively, last year.
Reporter Go Eun-i koko@hankyung.com
2024-03-29 09:34:53
#worry #finally #profit.. #Reversal #carrot #deficit #years
