GMKT

As South Korea's e-commerce market has grown over the past few years, small business owners have tried to cash in. Problem is small- and medium-sized businesses often don't have the financial resources or brand power to develop and sustain their own Web sites, says Young Bae Ku, chief executive of South Korea's Gmarket. So, many of them sell their wares on Gmarket's Web site, gmarket.co.kr, which is a retail e-commerce marketplace. qGMKT owns no inventory. Rather it hosts transactions between other parties. It helps sellers manage, promote and service transactions. Owners opt to sell on Gmarket because it offers the advanced sales support and systems required for business sellers, says Ku, compared to the "relatively simple" sales functions occasional sellers need. qGMKT rivals don't provide such sophisticated support, he adds. qGMKT's tools help sellers promote their products and enhance sales. Its free Gmarket Sales Manager software helps sellers manage the entire sales process. That entails helping sellers list products, monitor inventory levels and track delivery status. Gmarket computes its share by dividing its gross merchandise value, or GMV, for a given period by the South Korean e-commerce industry total. GMV is the total value of products sold on Gmarket's site in a given period. During this year's 2Q, Gmarket's GMV rose 43% from last year to $846.6M. Gmarket's biggest rival is eBay's (EBAY) Korean arm, Internet Auction. qGMKT is doing well on the financial front. The co. went public on June 29, 2006. It has been on fire ever since. For four straight Qs, sales and earnings have grown at least by double-digit rates. In the 1Q, earnings more than tripled to $.14 a/s. Sales grew 74% to $50.9M. Registered users, which includes buyers and sellers, grew to about 11.8M from 11M at the end of last year's 4Q. During the Q, the site averaged 16.9M monthly unique visitors, up from 15.2M the prior year. The site gets 17M unique visitors per Q, Ju says. The co. gets nearly two-thirds of sales from transaction fees that are charged sellers when they close a sale on its Web site. Its transaction fees are between 6% and 12% of the sales price. It also generates revenue from premium listing fees and advertising. Watchers expect the co. to stay on the fast track. First Call expect full-year earnings to rise 76% to $.65 a/s, then increasing another 26% in 2008.