Gmarket aims to provide e-commerce infrastructure

By Yoo Soh-jung



For Ku Young-bae, outrunning global e-commerce giants Internet Auction and eBay in the home market is like a dream come true. But it does not mean he can kick up his legs and relax.

The president and chief executive officer of Gmarket Inc., Korea`s leading retail e-commerce marketplace, is rather at the beginning of building a mountain out of a molehill.

"Our e-commerce market has passed the growth stage and has now entered a mature stage, which I think means it is time to create a new higher level of e-commerce industry," Ku told The Korea Herald at his company headquarters in Seoul.

This ambitious goal includes pioneering a "ubiquitous shopping" industry that includes mobile and offline shopping.

"The e-commerce market will evolve to take on a life of its own (in Korea). It will become a `new industry` that is the union of marketing, distribution, and manufacturing, as well as the union of both online and offline shopping," explained Ku.

Gmarket`s vision does not stop here. It also aspires to be a hub of global commerce and a global trendsetter of the e-commerce marketplace.

"Our company`s vision is to be a global e-commerce infrastructure provider; this means becoming a hub of the global market," Ku stressed.

Such a vision may not be so far-fetched. At home, Gmarket has outpaced global giants eBay and Internet Auction, eBay`s Korean subsidiary. The local site (www.gmarket.co.kr) currently attracts an average of 18 million visitors a month, making it the most-visited publicly listed e-commerce site in the country. Gmarket commands the largest share of the e-commerce market here with about 19 to 20 percent, Ku said.

In its most recent financial disclosure, the Korean upstart in November announced that revenue totaled 41.2 billion won ($43.5 million) for the third quarter of 2006, a 125 percent jump from the 18.3 billion won recorded in the third quarter of 2005.

The company`s gross merchandise value, which represents a total of all items sold in its website, increased by 103 percent to 573 billion won from 282.7 billion won for the same period in 2005. The net income for the third quarter of 2006 was 5.4 billion won compared to 0.2 billion won in the same period in 2005. During the same quarter, the company had 17.1 million visitors, a 34 percent increase from 12.7 million visitors recorded in the third quarter of 2005.

Reflecting Gmarket`s potential worldwide, the company listed on the NASDAQ on June 29 last year. Yahoo! also has a 9.1 percent stake in the Korean venture.

In terms of further growth potential in the local market, Ku said that Korea has the largest per capita expenditure rate compared to other advanced countries with comparatively larger e-commerce markets, such as the United States, Germany, and Japan.

The 41-year-old CEO declared that Gmarket will continue to focus on being unique and retain leadership in the industry.

"We don`t spend time on benchmarking. We`re making our own model, which other places may be eager to adapt," emphasized Ku.

He confidently says that eBay and Auction would feel threatened.

"We`re ahead of our competitors by a big gap," said Ku, who is rather soft-spoken and reserved.

This year, the entrepreneur plans to establish a basic blueprint for building the so-called "new industry." He also plans to expand the number and category of items sold at Gmarket to include furniture, sporting goods, and food.

Ku`s ambitions do not end here. He is also out to establish a name in foreign markets. His first target is Japan. Even Meg Whitman, the CEO of eBay Inc., hailed as the "powerhouse of the World Wide Web`s business," failed to get a firm footing in Asia`s largest economy.

The United States is next on his target list.

Ku believes Gmarket`s NASDAQ-listing and ties with Yahoo! will help leverage deals and expand in foreign markets, especially the United States.

"I focus on the `common` aspect of consumers. I believe people all over the world have more in common than differences," he emphasized. Ku, who has a degree in engineering from Seoul National University, says he gained entrepreneurial skills during his nine years of working in oil service industry in the Middle East. Upon his return to Korea in 1999, he took a position as head of the overseas business division of Interpark, a local internet portal operator that is also the third-largest player in the online retail market.

Interpark is the largest shareholder of Gmarket with a 33.74 percent stake. Ku was assigned to lead the Gmarket development team at Interpark in 1999. He has been acting as CEO of Gmarket since it spun off from the parent company in 2000.

"I will ensure continual upgrading of our services and will expand our product category for steady growth, and as the industry leader rapid growth and retaining momentum are most important," said Ku.

(sohjung@heraldm.com)