CJ OnStyle Q3 operating profit down 46.8% amid increased investment in new businesses

[Financial News] CJ OnStyle’s profitability worsened in the third quarter of this year amid increased investment in new businesses, despite growth in its mobile content commerce business. GMV for mobile businesses such as creator commerce and short-form content rose sharply, but the burden of investing in future growth businesses led to lower operating profit.
According to the Financial Supervisory Service’s Data Analysis, Retrieval and Transfer System (DART) on the 5th, CJ OnStyle’s operating profit for the third quarter of this year was 6.7 billion won, down 46.8% from 12.6 billion won in the same period a year earlier. Revenue for the same period fell 1.9% to 348.9 billion won from 355.7 billion won.
Compared with the previous quarter, revenue fell 13.4% from 402.8 billion won, while operating profit fell 74.2% from 26 billion won.
CJ OnStyle said expanded investment in future growth businesses, including the development of its creator business platform ONTNER, had contributed to the decline in operating profit. Growth centered on its mobile content commerce (MLC) business continues, but the related investment costs are understood to have weighed on short-term profitability.
In the third quarter of this year, GMV for CJ OnStyle’s mobile content commerce rose 104% year over year. Mobile content commerce combines live commerce, short-form content and creator commerce. GMV for creator commerce and short-form content grew 172% and 129%, respectively, driving the growth.
Its customer base also expanded. CJ OnStyle increased traffic to its mobile app through collaborations with entertainment intellectual properties (IPs) with fan bases, including Pa-kimchi Gang and izna. As a result, app downloads increased 10.6% year over year, while monthly active users (MAU) rose 11.0%.
On the product front, CJ OnStyle expanded its offerings in categories with strong demand among customers in their 30s and 40s, including travel and baby and children’s products. As a result, overall GMV rose 5.8% year over year.
A CJ OnStyle representative said, “In the third quarter, as mobile content commerce (MLC) continued its strong growth, we increased proactive investment in future growth businesses such as creator commerce. In the fourth quarter, we will focus on maximizing the benefits of the peak season for commerce.”
[email protected] Kim Hyun-ji Reporter