[비즈한국] A new CEO has taken the helm at the 'emotional channel' design shopping mall, Tenbyten. This marks a replacement of the top leadership position, which had remained unchanged even after the company was acquired as a GS Group affiliate in 2013. As a flagship name in the first generation of design and stationery e-commerce, all eyes are on whether Tenbyten can undergo a transformation under new leadership amidst the crisis in the e-commerce market.
Tenbyten, which started as Korea's first specialty design shopping mall, has welcomed a new CEO for the first time in 11 years. The person who stepped into the role on August 1st is Song Seung-hoon, the Chief Financial Officer (CFO) of Backpacker. Choi Eun-hee, the founder and former CEO who has led the company since 2013, will remain at Tenbyten as an advisory director until the end of this year. On July 31st, former CEO Choi left a farewell message on the partner bulletin board, stating, "I will provide support through a new role to ensure Tenbyten continues to grow and develop."
Tenbyten was founded by five classmates from the Hanyang University Department of Architecture class of '92, including Lee Chang-woo, CEO of Dot Slash Dash (founder of 29CM), and Bae Woo-hyun, CEO of Ithinkso. As the original founders left the company one by one over the 20+ years of Tenbyten's operation, former CEO Choi Eun-hee remained the only founding member serving as a registered executive. If former CEO Choi steps down from her position as an internal director after this year, it appears Tenbyten will reach a major turning point.
Tenbyten launched its services in October 2001 as Korea's first online mall specializing in design. It established itself as a leading brand in the design goods market by opening its first offline store in Daehak-ro in September 2003. In 2013, GS Home Shopping acquired an 80% stake for 16 billion won, bringing Tenbyten into the GS Group. By expanding its lifestyle business sector, GS Home Shopping aimed for synergy by acquiring Tenbyten, the then-market leader in design goods.
While Tenbyten grew in size, achieving an annual transaction volume of 110 billion won in 2019 and reaching 6.1 million members in 2021, its profitability deteriorated due to the aftermath of COVID-19 and market shifts. Tenbyten turned into a net loss (-400 million won) in 2020 and has been unable to escape the red. Net losses ballooned to 4.5 billion won in 2021, 5.6 billion won in 2022, and 7.1 billion won in 2023. Ultimately, GS Retail007070 sold its entire stake in Tenbyten to Backpacker in December 2023, citing that "the synergistic effect with the online business was minimal."
Backpacker, which acquired Tenbyten, is the operator of the handmade marketplace Idus, crowdfunding platform Tumblbug, and creator community Steady. Seven months after the acquisition, Backpacker appointed its own internal executive as the new head of Tenbyten, explaining, "Idus, Tumblbug, and Steady are all services that build a creator ecosystem. This leadership change is intended to create synergy between the existing services and Tenbyten, a design shopping mall."
However, it remains uncertain whether Backpacker can improve Tenbyten's profitability, given the poor conditions across the e-commerce industry. Babosarang, another design shopping mall that followed Tenbyten, went bankrupt last June due to management difficulties, amid allegations of a 'run-and-gun' closure. Tenbyten has also recently reduced its staff significantly. According to the National Pension Service, 22 employees left Tenbyten as of July. The total number of employees has decreased by nearly 40 in one year (from 164 to 125).
Backpacker has previously failed to improve the profitability of other companies it acquired before Tenbyten. Tumblbug, the crowdfunding platform, remained in the red from its acquisition by Backpacker in 2020 until it was absorbed and merged by Backpacker in July 2023. According to the Financial Supervisory Service disclosures, Tumblbug’s net loss grew steadily from 300 million won in 2020 to 1.8 billion won in 2021, and 2.7 billion won in 2022.
There is also interest in whether Tenbyten's operating policies will change. Last April, Backpacker faced controversy after implementing free shipping on its main service, Idus, and passing the costs on to the vendors. At the time, Backpacker CEO Kim Dong-hwan addressed the vendors, stating, "We have massive accumulated deficits due to years of losses," and admitted, "Over 100 team members—nearly half of Idus' staff—have left the company." In fact, the number of Backpacker employees has dropped from 247 in July 2023 to 179 this year.
Nevertheless, Backpacker’s cost-cutting efforts succeeded in producing a surplus in 2023. While revenue decreased from 54.7 billion won in 2022 to 50 billion won in 2023, the company successfully pivoted to an operating profit of 300 million won during the same period, compared to a loss of 10.8 billion won in the previous year.