Karrot posted its highest single-day transaction volume ever during Karrot Day, a secondhand trading festival, according to industry figures. Use of its Direct Purchase service, which combines payment and delivery, surged in particular, confirming strong demand for contactless secondhand trading. The results are expected to bolster Karrot's push to develop brokerage fees into a new revenue source beyond its advertising-centered business.
Total secondhand transactions, combining in-person deals and Direct Purchase, rose 141% from a typical Saturday during Karrot Day, the company's first such festival held on the 10th of this month, according to retail industry sources on the 17th. It was the largest single-day volume since Karrot was founded.
Direct Purchase, which bundles payment with delivery, saw the sharpest gains. Payments through the service on the day of the festival were 7.3 times the level recorded during the same hours, from 9 a.m. to 6 p.m., on the previous Saturday. Over the same period, the number of buyers using Direct Purchase rose 4.6 times and the number of sellers 5.2 times.
The jump in contactless demand is attributed to Karrot covering shipping costs in full for up to five Direct Purchase transactions per user during the festival. With the increase in Direct Purchase payments far outpacing the rise in overall transactions, analysts said the figures highlight the growth potential of a model that pairs escrow payments with contactless delivery.
Karrot expanded Direct Purchase nationwide in March this year as it moved into the contactless secondhand market. The service allows buyers to pay for an item and receive it by parcel delivery without meeting the seller. It operates on an escrow system that holds the buyer's payment and releases it to the seller once the transaction is complete.
Karrot collects a brokerage fee at a set rate on Direct Purchase transactions, meaning fee revenue grows as use of the service expands. The company aims to diversify a revenue base now dominated by advertising. Karrot's consolidated revenue for the first half of this year was 170.3 billion won ($119 million), with advertising accounting for 163.3 billion won, or about 96% of the total.
Brokerage revenue from escrow payments is growing quickly. In the first half of this year it reached 6.8 billion won, already exceeding the 2.1 billion won booked for all of last year. The segment still accounts for only about 4% of total revenue, but expectations are rising that it can establish itself as a new earnings driver after the demand for Direct Purchase demonstrated at the festival.
A Karrot official said the festival confirmed strong user interest in and demand for Direct Purchase, adding that the company will continue to upgrade the service so users can trade secondhand goods more conveniently and safely.