[Into the Stocks] Oasis Across the Street... Dreaming of the Next Coupang

E-commerce Profitable Company Oasis
Reviewing Both Domestic and International IPOs
Expanding Logistics via Fulfillment Silk Road
Business Expansion into Brands and Electronics
Stock Market Calls It an 'Unchanging Rising Star'

Oasis Market CEO Choi Woo-sik, an online dawn delivery company, poses before an interview at the Oasis Market logistics center in Seongnam, Gyeonggi Province.
Seongnam=Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Junho Hwang] "Milk 1,500 won, bean sprouts 700 won, two blocks of tofu 2,200 won, 10 free-range fertilized eggs 2,900 won."

These are prices never experienced before. All are also eco-friendly products. When Jiseon Kim leaves work early, she stops by the newly opened Oasis Market in Deungchon-dong, Gangseo-gu. Ms. Kim checks out good products here. If she finds food she likes, she orders through the app. Because she can receive it via dawn delivery. Although daily life has changed due to COVID-19, it feels like the quality of food has actually improved.

It's not just about food. Oasis Market is evolving into a 'good platform' by expanding its scope from brand malls to small business coexistence projects. In a market where ESG (environment, social, governance) is the trend, it is securing solid performance with a strategy different from traditional distribution companies, showing steady growth. As domestic and foreign investors continue to show interest, attention to its initial public offering (IPO) has also increased.

Oasis Market: The Only Profitable e-Commerce Company
Will It Join the Exchange After 20 Years?

The most noticeable aspect when analyzing Oasis Market as a stock is its performance. After achieving an operating profit of 2 billion won in 2017, it recorded steady profits of 300 million won in 2018 and 1 billion won in 2019. It can be considered the only profitable domestic e-commerce company. Considering that investments in growth companies usually realize profits through initial public offerings (IPOs), Oasis Market can be seen as an attractive asset. Unlike Coupang, which had accumulated losses of 4 trillion won and went public on the New York Stock Exchange, or Kim Seul-ah, CEO of Kurly, who plans to follow Coupang's precedent, Oasis Market is also considering domestic listing. In fact, Oasis Market is exploring both domestic and international listings. If it enters the Korea Exchange this year, it will become the first e-commerce company to be listed in over 20 years since Interpark's listing in 1999. If it goes to overseas stock markets, it is expected to be spotlighted as the second Coupang.

Investor response has been very enthusiastic. Since last year until now, Oasis Market has raised a total of 56.4 billion won. Last year's provisional sales are expected to be around 240 billion won, which is about 23% of this amount. Last year, Kakao Investment made a bold investment in Oasis Market, valuing the company at 223 billion won. The Must 1st and 2nd Venture Investment Associations and Cornerstone Pentastone 2nd New Technology Association, which decided to invest 15 billion won on the 1st of next month, valued it at 315 billion won.

Oasis Market Business Outlook
"Slowly, but Hurry"

Remarkable factors are also being secured from a business perspective. This year, Oasis aims to open its 50th store. Recently, it opened its 39th store in Gangseo-gu. Contrary to retail giants reducing offline stores, Oasis Market is expanding offline. Interest in good food has increased due to COVID-19, and interest in Oasis Market, which offers affordable prices, is growing. From the consumer's point of view, they can check products in-store and order via the app to receive dawn delivery, making it a win-win.

Online, the business area is expanding. Recently, a brand mall was opened to start selling clothing and shoes. In the future, smartphones, air fryers, and more will be displayed. This is not just about expanding sales areas. As a good platform, it plans to expand sellers' domains. To recruit sellers, the commission fee was set at the industry's lowest. Utilizing this strength, this year, Oasis Market plans to promote a small business discovery project in cooperation with the Small and Medium Business Distribution Center under the Ministry of SMEs and Startups. This project helps small-scale sellers, whose sales channels were blocked by COVID-19, to utilize Oasis Market. Oasis Market users will also be able to subscribe to daily necessities from sellers registered with the Small and Medium Business Distribution Center.

The 'price competitiveness,' Oasis Market's selling point, is expected to increase further. The secret to Oasis Market's affordable prices lies in logistics. Unlike competitors like Market Kurly, which operate separate logistics centers for frozen, refrigerated, and room temperature goods, Oasis Market handles all logistics in one place. All ordered products can be packed in one box, making it eco-friendly. Through 'Oasis Route,' developed by its parent company, GeoSoft, the picking route is minimized, significantly reducing the time to packaging, which plays a major role in securing logistics efficiency. Additionally, GeoSoft recently established Silk Road, a fulfillment company, to support Oasis Market's logistics. Oasis Market, which was looking for a third logistics center, plans to expand regional bases using Silk Road's Uiwang logistics center as a hub.

The 'people'-friendly HR policy also sends positive signals to the market. Even during the COVID-19 period, Oasis Market increased its frontline workforce by 130%. All are full-time employees. In the fourth quarter of last year, it hired about 30 people per day. This year, the goal for new full-time hires is 1,000. This can be seen as a wise solution to the biggest problem cited in responding to the 4th Industrial Revolution, a key government project: 'recruitment.'

The securities industry's outlook is bright. Chansol Park, a researcher at SK Securities, said, "This year, the number of dawn delivery days increased from six to seven days a week," and "growth is expected to continue as regional logistics center bases are secured." Myungjoo Kim, a researcher at Mirae Asset Securities, said, "Silk Road plans to provide fulfillment services focused on non-food items, which will improve seller convenience for Oasis Market, contribute to commission revenue and transaction volume growth on the Oasis platform," and "considering 2022 growth, GeoSoft is an undervalued stock."

As of the 18th, GeoSoft's stock price is 20,400 won. Last month, Hana Financial Investment set GeoSoft's target price at 21,900 won. At that time, the stock price was 15,800 won.