"Starting with a Profitable System and Expanding the Logistics Center"

Oasis Aiming to Become 'Korea's First Listed E-commerce Company'
Reducing Logistics Costs by Building a Combined Shipping System
Cooperative DNA ... Win-Win Management with Partner Stores

[Asia Economy Reporter Hwang Yoon-joo] Oasis, which is highly likely to claim the title of 'the first e-commerce listed company in Korea,' is attracting the market's full attention. This is because it is considered the first major IPO of the new year amid a cold wave of initial public offerings (IPO) due to sluggish stock markets, and it is the first domestic fresh food delivery company to achieve profitability.

Oasis will conduct demand forecasting on February 7-8 and accept general subscriptions on February 14-15. The KOSDAQ listing is planned to be completed in February. Oasis will offer a total of 5,236,000 shares in this IPO. The expected offering price ranges from 30,500 to 39,500 KRW per share, with the total offering amount estimated between 159.7 billion and 206.8 billion KRW. Based on the offering price, the market capitalization after listing is expected to be around 1 trillion KRW. NH Investment & Securities and Korea Investment & Securities are joint lead managers.

◆Parent Company Developed IT Logistics System...Improved Work Efficiency, Reduced Costs = The market points to Oasis's differentiated strength as its IT logistics system, 'Oasis Route.' It is an efficient logistics management application developed in-house by its parent company, GeoSoft. Even employees on their first day can perform picking and packing smoothly by simply installing the app on their smartphones. It is praised for reducing workers' movement and lowering costs.

Oasis Route was developed to operate a consolidated delivery system. Consolidated delivery is a logistics method that packs all products ordered by a customer into one box for delivery. Traditional e-commerce companies would deliver 6 to 10 boxes for an order of 10 items. In contrast, Oasis organizes and packs customer orders at once, reducing logistics costs.

The logistics center's IT system operates at a golden ratio, maintaining approximately an 8:2 ratio between IT and workers. After trial and error, they realized this is more efficient than a 100% smart factory. Robots handle large box loading tasks, while picking is optimized using Oasis Route, tailoring systems to each task.

This was the strategy of founder Chairman Kim Young-jun. At the time, Chairman Kim emphasized, "We must first build a profitable system and then expand logistics centers," adding, "It is inefficient to recklessly invest in facilities while running at a loss." While competitors aggressively invested in logistics facilities, Oasis focused solely on building the Seongnam 1 and 2 logistics centers.

His strategy was proven by results. Oasis's operating profit was 9.7 billion KRW in 2020 and 5.7 billion KRW in 2021. Expectations for performance are also growing. Sales from the Seongnam 1 and 2 logistics centers can reach up to 500 billion KRW. The Uiwang logistics center, completed in October last year, is larger and more efficient, about five times the size of the Seongnam logistics center.

An investment banking (IB) official explained, "Oasis applied the optimal IT system and cost-saving know-how learned from the Seongnam logistics center to the Uiwang logistics center," adding, "As the operating rate of the Uiwang logistics center increases, Oasis's sales and profits will increase proportionally."

◆Cooperative DNA...Adherence to Direct Transaction Method = Oasis's image of coexisting with partner vendors is also considered an advantage. E-commerce platforms often have conflicts over margins with partner vendors, especially accusations of lowering vendors' margins to increase profitability. The conflict between Coupang and CJ CheilJedang is a representative example.

A distribution industry insider said, "During the year-end supply contract renewal between Coupang and CJ CheilJedang, I heard that Coupang raised its margin rate from 30% to 40% and demanded CJ CheilJedang to lower the supply price," adding, "Both sides were sensitive to performance, making negotiations more intense."

In contrast, Oasis was founded in 2011 by Chairman Kim, who came from Woori Consumer Cooperative (Woori Saenghyeop). Unlike competitors who use agents for annual supply contracts, Oasis sticks to direct transactions. While margin negotiations with suppliers are inevitable in e-commerce business structures, Oasis explains that coexistence is possible.

Thanks to these strengths, Oasis is on the verge of becoming the first e-commerce food company to be listed. Oasis expects a successful IPO. However, the sale of existing shares may pose a burden on the stock price. The sale of existing shares refers to existing shareholders such as major shareholders or investors selling part of their holdings to the public. The company does not receive new funds from the sale of existing shares during the offering process. Oasis's existing share sale volume is 1,571,000 shares, accounting for 30% of the total offering shares (5,236,000 shares).