Ex-Goldman Banker's Quest for Fresh Food Turns Into a Hit App
(Bloomberg) -- A mobile app created by a former Goldman Sachs banker obsessed with fresh food is disrupting South Korea’s retail industry by giving grocery shoppers fewer reasons to visit a store.
With the Market Kurly app, shoppers can order in the evening and have fresh vegetables, eggs and other perishable foods delivered directly to the doorstep by sunrise. The company promises delivery before 7 a.m. for orders made before 11 p.m.
The overnight service has caught on among high-income families with little time to go grocery shopping and is nipping at the heels of chaebol-run companies like E-Mart and Softbank-backed Coupang over the country’s 23-trillion-won ($20 billion) fresh-food market.
“Market Kurly is becoming an alternative for hypermarkets like E-Mart, whose sway over fresh foods has been unchallenged until now,” said Kim Hyun-Su, a fund manager at IBK Asset Management. “More and more people who work will probably turn to this kind of service.”
After mostly focusing on Seoul’s posh Gangnam neighborhoods the delivery service is expanding beyond the country’s largest city thanks to a 67 billion won ($60 million) investment last year from investors including Sequoia Capital Ltd.
“I knew this type of business would thrive with the rise of working women, including moms,” said Sophie Kim, the 35-year-old founder of Kurly Inc. “As income rises, people start caring more about quality.”
Kim began her career as a banker in mergers and acquisitions at Goldman Sachs Group Inc. in Hong Kong before working at firms like Temasek Holdings Pte and McKinsey & Co. It was at management consulting firm Bain & Co. that she came up with the idea for Market Kurly, after becoming frustrated with spending most of her downtime searching for fresh foods to take care of her deteriorating health. Kurly, formed in 2015, is a play on the word “culinary”
About 300,000 people now use the app each month to buy everything from salmon and beef to sea cucumbers and kale, according to Kim, who sometimes stays up at the company’s warehouse on the outskirts of Seoul until 3 a.m., when delivery begins.
A typical pack of 10 eggs sold on Market Kurly can cost from 5,400 won to 19,000 won while a similar product will sell for less than 5,000 won on other online stores. Most customers range in their thirties and forties with many enjoying posting photos of their food on social media like Instagram, Kim said.
Kim, who declined to provide company sales and earnings for 2018, said she hopes to have Kurly turn a profit in a couple of years and is pushing for more funding from other investors. The company probably quadrupled its revenue to 160 billion won ($142 million) in 2018, according to business journal E-Today.
Other retailers are trying to catch up. E-commerce startup Coupang last year began to offer overnight delivery for fresh foods in certain locations, and E-Mart also rolled out a similar service, hoping to stem the hemorrhage of store customers. Kim said she welcomes the competition because it’ll help expand the market for overnight delivery services.
“Some rivals are trying to build their own shipping centers for grocery and catch up with Market Kurly,” said Park Hee-jin, analyst at Shinhan Investment. But Market Kurly is “competitive in its selection of premium foods,” which may not be readily available at E-Mart or at other grocery stores.
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