Connectwave, a specialized e-commerce company, reported a decline in its first-quarter performance due to unfavorable external factors such as a slowdown in the e-commerce market growth, decreased demand for computers and home appliances, and a sluggish online advertising market, which led to a decrease in transaction volume and advertising revenue. However, operational indicators such as monthly active users (MAU) and the number of customers (sellers) maintained a steady upward trend.
On the 16th, Connectwave announced that it recorded a consolidated total transaction volume (GMV) of 3 trillion KRW, operating revenue of 109.6 billion KRW, and adjusted EBITDA of 14.1 billion KRW for the first quarter of this year. Compared to the same period last year, GMV decreased by 5.1%, and operating revenue and adjusted EBITDA decreased by 10.5% and 8.1%, respectively. The adjusted EBITDA margin improved by 0.4% year-on-year as a result of efforts to improve profitability, including cost reduction.
Connectwave has e-commerce business platforms encompassing services, solutions, and data for B2C and B2B transactions both domestically and internationally across three business divisions: ‘Data Commerce (Danawa, Enuri, BuiltOn, SweetTracker)’, ‘E-commerce Solutions (MakeShop, PlayAuto, LinkPrice)’, and ‘Cross-border Commerce (Malltail, ShipGet)’.
In the Data Commerce division, MAU grew by 5.8% to 18.8 million in the first quarter of this year, while GMV and operating revenue decreased by 9.5% and 7.1% year-on-year to 600 billion KRW and 50 billion KRW, respectively.
Thanks to platform enhancements and category expansion efforts for the price comparison platforms Danawa and Enuri, MAU grew compared to the same period last year. However, GMV declined due to decreased demand for computers and home appliances and intensified competition in the e-commerce market. Operating revenue partially offset the GMV decline through increased sales from services other than price comparison, such as delivery tracking services, but still showed a downward trend due to the unfavorable e-commerce market environment.
In the E-commerce Solutions division, the number of customers (sellers) increased from 44,274 in the same period last year to 45,604 in the first quarter of this year, supported by a 3% increase in customers for PlayAuto and MySoho. GMV recorded 2.3 trillion KRW, down 3.7% year-on-year. Despite the increase in customers (sellers), GMV declined due to a decrease in sellers’ sales amid the slowdown in the e-commerce market. Operating revenue decreased by 9.4% from 23.5 billion KRW in the first quarter of 2023 to 21.3 billion KRW, affected by a decline in advertising revenue from MakeShop due to the slowdown in the online advertising market.
The Cross-border Commerce division (Malltail, ShipGet) experienced declines in shipment volume, GMV, and operating revenue due to unfavorable external factors such as increased transportation costs caused by high exchange rates and inflation, as well as a decrease in overseas direct purchases of high-priced items like alcoholic beverages and large home appliances. Shipment volume recorded 540,000 units, down 5.1% compared to the same period last year. Due to the decrease in shipment volume and the reduction in overseas direct purchases of high-priced products such as alcoholic beverages, GMV and operating revenue fell by 15.7% and 17.1% year-on-year to 50 billion KRW and 35 billion KRW, respectively.
Lee Geonsu, CEO of Connectwave, said, "Although our performance declined due to the slowdown in the e-commerce market growth and continued unfavorable environment, the e-commerce specialized generative AI ‘PLAi (Play)’ to be launched in the second half of the year will introduce customers to a new world of shopping they have never experienced before." He added, "We will continuously strive not only to improve the business divisions’ fundamentals but also to enhance services and create synergies.”
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