KT Alpha has improved its operating profit and net income in the first half of the year, despite a decline in revenue, marking a successful shift towards profitability. The company's strategy to reduce direct purchases and restructure its product portfolio around consignment sales has resulted in lower total sales but higher profit margins.
On August 12, KT Alpha reported first-half revenue of 192.5 billion won, an operating profit of 26.2 billion won, and a net income of 24.7 billion won. While revenue decreased by 2.1% compared to the same period last year, operating profit and net income increased by 0.3% and 2.8%, respectively.
In the second quarter, revenue was 96.4 billion won, with an operating profit of 12.7 billion won and net income of 13.3 billion won. Compared to the same period last year, revenue fell by 3.7%, operating profit by 8.6%, while net income rose by 0.4%.
The revenue decline is attributed to a reduction in direct purchase products in T-commerce and an increase in consignment products. Direct purchases account for the entire sales amount recognized as revenue, while consignment sales only reflect the commission in revenue. Consequently, while reported revenue has decreased, total transaction volume for the first half increased by 9.0% year-on-year.
By business segment, KT Alpha Shopping, a data home shopping service, saw its transaction volume increase by 3.0% compared to the same period last year. The growth was driven by an expanded mobile share, an increase in exclusive brands, and promotional products, as well as the expansion of sales channels like shopping lounges.
The mobile gift certificate 'Giftishow' experienced even greater growth. First-half revenue reached 64.5 billion won, a 4.7% increase, while transaction volume surged by 14.6%, setting a record high. The expansion of partnerships with major platforms like Gmarket and Toss, along with increased demand for integrated gift certificates, contributed to this growth. The 'Giftishow Biz' service for corporate clients is also enhancing seasonal marketing and specialized services.
Mobile gift certificates are becoming a key growth driver for KT Alpha. Last year, mobile gift certificate revenue was 127.4 billion won, a 12.9% increase from the previous year, while T-commerce revenue declined. In the first quarter of this year, mobile gift certificate revenue rose by 7.5% year-on-year to 32.4 billion won, with transaction volume increasing by 43.3%.
KT Alpha is also accelerating its business transformation using artificial intelligence (AI) and data in the second half of the year. The company plans to enhance AI-based search and recommendations, as well as personalized curation, and to implement a more real-time shopping experience using AI shopping agents in broadcasting.
In July, KT Alpha celebrated its 35th anniversary by announcing its management strategy 'SHIFT 2026.' The plan outlines a vision to evolve into a 'Connected Commerce Company' that integrates all of the company's competitive strengths based on AI and data.
In the second half, KT Alpha Shopping will expand its exclusive brands and promotional products while strengthening its strategy to connect TV and mobile. Giftishow will introduce integrated gift certificates that allow customers to select desired products and will also work to secure business-to-business (B2B) clients.
Park Jung-min, CEO of KT Alpha, stated, "In the second half, we will expand our T-commerce exclusive brands and strengthen our AI-based Live-like strategy, while also enhancing the scale of B2B clients in the mobile gift certificate business and advancing AI-based customer analysis to further strengthen our business competitiveness."
* This article has been translated by AI.
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