이 기사는 2022년 03월 28일 08:00 thebell 에 표출된 기사입니다.

South Korea’s online grocery startup Kurly saw its contribution margin increase over the past three years, heightening expectations that its profitability will improve down the road.

Kurly recorded an operating loss of 217.7 billion won ($179 million) in 2021, up 87% year-over-year, but posted contribution margin for the third consecutive years since 2019, according to industry sources on Wednesday. Contribution margin shows the aggregate amount of revenue available after variable costs to cover fixed expenses and provide profit to the company.

According to Kurly, the contribution margin from Seoul and some regions of Gyeonggi Province was up to six times larger than that of other regions. The company plans to improve its profitability by expanding this trend to Chungcheong Province, Daegu, Busan and Ulsan, where it launched its overnight delivery service last year.

Even though the company has generated contribution margin, its loss also has increased due to fixed costs caused by expansion of distribution centers and an increase in manpower. The firm’s distribution centers in Songpa and Gimpo started full operations in 2021.

Kurly said it recognizes this loss as an investment and its revenue grew at a rate of 64% last year, higher than its competitors, thanks to infrastructure expansion. Kurly’s gross merchandise value grew by 67% year-on-year in 2021 to surpass the 2 trillion won mark for the first time in its history.

Kurly has diversified its business portfolio for further growth. The proportion of non-food sales in the company’s total revenue increased to 33% amid its business diversification efforts.

Its revenue from beauty items increased by 3.1 times compared to 2020 and 2.3 times for home appliances. It also started to sell hotel accommodation vouchers and flight tickets to Jeju Island.

Thanks to its business strategy, about 75% of Kurly’s first-time users returned for shopping in 2021, three times higher than its peers. Around 61% and 65% of Kurly’s first-time users returned for shopping in 2019 and 2020, respectively. The company had more than 10 million users as of the end of last year. (Reporting by Seon-ho Kim)