SoftBank-backed Korean flea market app sees overseas growth

Danggeun Market Inc., South Korea’s largest online flea market service provider, enjoyed growth in other countries with its Karrot app briefly beating X last month in Canada, a top executive said on Sunday.

“Users in Canada and Japan more than tripled last year,” Danggeun co-CEO Hwang Do-Yon told The Korea Economic Daily in an interview. “Our hyperlocal strategy worked in North America and Japan as there are few services dedicated to neighborhoods in other countries.”

The Karrot: Buy & Sell locally app ranked No. 5 briefly last month, beating global social media giant app X, formerly Twitter, on the Google Play Store’s free social app list, according to Danggeun.

The SoftBank-backed unicorn, which was valued at around 3 trillion won in August 2021, began overseas businesses by launching the app in the UK in November 2019. Danggeun introduced the app in Canada in September 2020, the US in October 2020 and Japan in February 2021, quickly expanding its global presence amid the fierce competition in South Korea.

The strategy raised concerns that the company may have too aggressively expanded overseas before dominating the local market. A company usually targets other markets after securing a strong foothold in one country.

UPGRADED SERVICES, LOCALIZATION

Danggeun is applying know-how from its South Korean business and localization strategies to bolster overseas markets, Hwang said.

“We are trying to boost other markets based on our learnings and upgraded services in Korea,” he said.

The online marketplace operator for secondhand goods implemented different strategies for each market.

It allows users to make deals with others within a 10-kilometer (6.2 miles) radius in South Korea and Japan while facilitating transactions for customers as far away as 50 km in the US and Canada, for example.

“It will take very long to succeed in overseas markets, but we will keep on the challenge,” Hwang stressed.

TURNAROUND, GROWTH

Danggeun reported its first annual profit in 2023, which is expected to accelerate its global push.

The company logged an operating profit of 17.3 billion won on a separate basis last year, swinging from a loss of 46.4 billion won in 2022, as sales more than doubled to 127.6 billion won.

Its advertising business for small neighborhood shops powered the turnaround with more than 800,000 clients using the service. The number of Danggeun’s monthly active users topped 19 million in South Korea.

The company has been improving the app to increase users and usage times, Hwang said.

“We are assessing about 30 new functions after testing hundreds of new services last year,” he said. “The returning customer rate and satisfaction are more important than sales and operating profits.”

Danggeun is set to increase investments in new businesses this year with plans to launch platforms for jobs, used cars and real estate.

It introduced various services including a short-form video and a local encyclopedia providing neighborhood information last year.

Write to Joo-Wan Kim and Eun-Yi Ko at kjwan@hankyung.com
 

Jongwoo Cheon edited this article.