Carousell, the secondhand goods marketplace, is expecting to achieve profitability this year by significantly reducing its losses in a healthy manner, according to the company’s CEO. Quek Siu Rui, co-founder and CEO of Carousell, mentioned in an interview with CNBC that the company’s revenues are expected to grow healthily this year, while losses are also projected to see a healthy reduction. This positive development puts Carousell on track to attain its profitability goals.
Carousell, based in Singapore, reported a 67% increase in revenue to $82.5 million in 2022, compared to the previous year’s figures, according to official filings. However, losses widened by 57% year-on-year due to higher expenses.
Established in 2012 as an online classified advertisements marketplace for used goods, Carousell is investing in various initiatives and strategies to tap into the recommerce opportunity.
Quek noted that the global circular economy, which aims to reduce waste and promote recycling and reusing, could generate an additional $4.5 trillion in economic output by 2030, according to research.
Southeast Asia Expansion
Carousell has been actively expanding its presence across Southeast Asia by venturing into different sectors. In 2019, the company merged with Telenor Group’s classifieds firm 701Search, which operates popular marketplaces such as Mudah in Malaysia, Chợ Tốt in Vietnam, and OneKyat in Myanmar. Carousell also acquired OLX Philippines, the largest online classifieds site in the Philippines, during the same year.
The company further strengthened its position by acquiring OneShift, an online automotive platform, in 2018 and Ox Street, a marketplace for authenticated sneakers and streetwear, in 2021. Carousell introduced the Ox Luxe service, enabling users to buy, sell, and consign pre-owned luxury items like handbags and watches.
In order to expand its reach in the fashion and electronics markets, Carousell acquired Refash, a Singapore-based second-hand fashion retailer, and Laku6, an Indonesian electronics recommerce platform, in the previous year. Quek expressed confidence in the company’s ability to achieve healthy growth in the recommerce sector, thanks to strong capitalization and investor support.
Carousell raised $100 million in a funding round in September 2021, valuing the company at $1.1 billion. However, merger talks with private equity firm L Catterton were discontinued due to market volatility caused by challenging macroeconomic conditions like high interest rates and inflation.
Cost Cutting
Carousell’s recent funding round and valuation reached $1.1 billion, with reports suggesting the company had dropped SPAC merger talks with L Catterton due to market volatility. SPACs, or special purpose acquisition companies, are shell companies that raise capital through an IPO to merge with private firms and take them public. Challenging macroeconomic conditions, including high interest rates and inflation, have led to delays and cancellations of IPO plans for many companies.
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