TMON's IPO plan looks unfavorable this year

TMON CEO Lee Jin-won poses in his office in Seoul in this 2020 file photo. Korea time file

By Kim Jae-heun

E-commerce firm TMON has successfully attracted 305 billion won in investments, allowing it to get back on track for an initial public offering (IPO) on the local stock exchange in the second half of the year.

However, after falling behind competing players such as Coupang and Naver, the company faces a hard task to persuade investors of its future sales growth and profitability.

“Given TMON's worsening financial soundness, it won't be easy for TMON to seek an IPO this year,” an industry source said.

TMON is aiming to get listed within the year, however, it's been suffering heavy losses with total liabilities of 658.1 billion won as of 2019.

The local stock exchange has advised the e-commerce firm to improve its financial status first and luckily it secured 255 billion won from a consortium led by PSA Alliance, a domestic private equity fund.

If it is listed on the Kosdaq, TMON will utilize money raised from the IPO to invest in marketing and logistics. TMON thinks it has competitiveness over its peers by continuously offering special discount events taking place every hour and minute that will attract new membership customers online.

“Our Time Commerce strategy introducing new special deals every minute has been attracting new customers and getting them to revisit our platform. It also brought up the number of newly registered customers by 47.8 percent compared to last year,” a TMON official said.

TMON is also expected to benefit from Coupang's planned IPO, set for sometime next month. Coupang's corporate value is estimated at 55 trillion won. TMON CEO Lee Jin-won said earlier the investment his company recently secured will help it make up for losses and be used for the IPO process in the second half.

Last March, the e-commerce company marked its first operating profit since its establishment a decade ago. However, because it downsized its businesses to cope with snowballing losses, its annual sales decreased by 17 percent to 286.4 billion won in 2020.