SKT's One Store on track for IPO

By Kim Bo-eun

Preparations for SK Telecom's market app One Store to go public are set to accelerate after the affiliate posted its first annual profit in 2020.

One Store had been running at a deficit for four years since its launch in 2016, but the profit signals that its business has stabilized and is now on a growth trajectory.

The company said this week it posted profits for the fourth quarter of 2020 and that it saw growth for 10 consecutive quarters. One Store did not unveil earnings figures; but according to its parent company SK Telecom's filings, the affiliate posted cumulative sales of 123 billion won in the first three quarters and a net profit of 2.3 billion won.

"The profit is the result of continuous growth based on the expansion of customers and product offerings," a One Store official said. "2020 was also a good year because of the growth of mobile content services due to COVID-19."

"Growth was pronounced in games and apps enabling subscriptions of webtoons and other content. One Store also achieved growth based on a fee cut."

One Store's market share had grown to 18.4 percent as of September last year. Its market share is now estimated to have reached 20 percent. Apple App Store's market share is around 10 percent and Google Play, 70 percent.

One Store's fee policy appears to have attracted customers. Apple charges a 30 percent commission on app developers, while Google also gets a 30 percent fee but only for games.

One Store, however, cut its fee from 30 percent to 20 percent in July 2018. It also allowed app developers to develop their own payment system and collects 5 percent in commission from their respective systems.

Since September last year, One Store has been providing a 50 percent commission discount on businesses that see less than 5 million won in monthly transactions. The discount will run through 2021.

One Store said this policy will benefit up to 16,000 developers and businesses, as well as One Store users as they will see the commission discount reflected in the payments they make.

One Store said its fee cut contributed significantly to earnings. The company posted 110 billion won in sales and a net loss of 20 billion won in 2017. However, after the fee cut in 2018, its net loss narrowed to 13.9 billion won the same year and to 5.4 billion won in 2019.

One Store's growth is drawing attention to the timing of its stock market debut. The company is known to have selected brokerages last year to manage the IPO.

"We are planning for the IPO to take place in the latter half of this year," the One Store official said.

One Store's value is estimated at around 1 trillion won, which is double its estimated value when it attracted investments in November 2019. And the app market's value is expected to grow beyond 1 trillion won given it is now on a stable growth trajectory.

A successful IPO is also expected to contribute to a rise in SK Telecom's share price. The telecom giant is also preparing for the IPOs of its pharmaceutical affiliate, SK Bioscience, and advanced materials unit, SKIET.

SKT is One Store's largest shareholder with a 52.7 percent stake, followed by Naver with 27.7 percent.