"The First Year of Profit Turnaround"…An Jung-eun, CEO of 11st's Challenge

Declared Open Market Profit Turnaround This Year
"2025 Performance Turnaround"
Profitability Improvement Through Strengthening Commerce Competitiveness

An Jung-eun, CEO of 11st, announced that "this year will be the inaugural year for profitability improvement." The plan is to turn a profit in the open market (OM) business this year and to challenge a performance turnaround by generating operating profit across the entire company, including the retail business, next year.

According to the company on the 12th, CEO An held the first company-wide '2024 1st Town Hall Meeting' for all employees yesterday afternoon at the 11st headquarters located in Seoul Square, Jung-gu, Seoul. The event was shared with all 11st employees through both on-site participation and online live streaming.

On the 11th, 11st held the '2024 1st Town Hall Meeting' for all employees at the 11st headquarters located in Seoul Square, Jung-gu, Seoul. An Jeong-eun, president of 11st, is speaking at the town hall meeting.
[Photo by 11st]

Through this town hall meeting, CEO An expressed confidence in the goal of a performance turnaround by 2025. He said, "Under a steady profitability improvement trend, we succeeded in reducing operating losses last year, and especially the open market business recorded a profit based on EBITDA last month." He added, "11st will focus more on strengthening commerce competitiveness and simultaneously work on efficiency improvements to secure business sustainability, aiming to achieve an annual profit in the open market business in 2024."

11st reached the break-even point (BEP) for the open market business in June last year and recorded EBITDA profits for three consecutive months from May to July. In December, it again recorded an EBITDA profit in the open market business. 11st expects that the open market business will enter a full profitability trend within the first quarter of this year, making an annual profit achievable.

To strengthen profitability this year, 11st will operate five new 'Single Thread (ST)' organizations focused on ▲seller growth ▲pricing ▲traffic ▲delivery ▲artificial intelligence (AI). Each ST organization will concentrate on executing core tasks to enhance the fundamental e-commerce competitiveness in ▲product ▲price ▲traffic ▲delivery ▲convenience, aiming for improvements in each area. Through this, 11st expects the performance of the ST organizations to create a 'Flywheel' effect, leading to a virtuous cycle of profitability improvement.

CEO An emphasized, "Despite the continued consumption downturn in the second half of last year, intensified e-commerce competition, and changes in the market environment, all 11st employees united and worked toward the company’s goals. Although this year will also be challenging due to the emergence of new platforms, the entry of global players, and changes in the surrounding environment, we must believe in 11st’s strength and continue our efforts for our customers."

Alongside turning a profit in the open market, 11st aims to achieve an annual profit turnaround by 2025 through efficient operation and growth of its retail business, including the next-day delivery service Shooting Delivery. A 11st official stated, "Through steady profitability improvement efforts, the annual operating loss last year was reduced by several hundred billion won compared to the previous year. We expect 2024 to be the turning point for 11st’s profitability."

Meanwhile, 11st has posted losses for three consecutive years since 2020. Starting with an operating loss of 9.8 billion won in 2020, it recorded losses of 69.4 billion won in 2021 and 151.5 billion won in 2022. The cumulative loss up to the third quarter of last year also reached 91 billion won. This is due to intensified competition in the e-commerce market combined with a deteriorating economy.

As a result, 11st is undergoing a forced sale process amid financial difficulties. Nile Holdings Consortium, a financial investor (FI) in 11st, invested 500 billion won in 2018 and holds an 18.18% stake. However, due to continued operating losses, the IPO, which was a condition of the investment agreement within five years, was not realized. Subsequently, SK Square, 11st’s parent company, gave up exercising the 'call option' to repurchase the shares held by the FI, and the sale is currently underway.