CJ Freshway has moved to secure long-term profitability by acquiring restaurant ingredient-ordering platform Marketboro after surpassing 100 billion won in operating profit for the first time since its founding.

CJ Freshway posted 3.48 trillion won in consolidated revenue and 101.7 billion won in operating profit last year. It was the first time it topped 100 billion won in operating profit since its founding. The company said the results came from strengthening profitability-focused models across all distribution and catering businesses and securing new growth engines through digital transformation (DT) and online-to-offline (O2O) initiatives.

CJ Freshway's online distribution revenue last year rose 55 percent from a year earlier.

CJ Freshway began laying the groundwork for DT in 2022. It focused on changing its existing order structure, which relied on an offline sales network and manual ordering, into a model that links offline and online channels.

CJ Freshway CEO Lee Geon-il (이건일) is seen as having delivered results after taking over leadership of the DT effort in 2024.

Lee set up an information technology-focused organisation, the O2O Tech Center, in August last year to combine operation of its online mall and external channels with technical support. In July that year, it merged subsidiary Freshone into the company to integrate scattered distribution functions. In November, it launched Freshen, an online food ingredient mall for restaurant operators.

CJ Freshway is now moving up a notch in platform scale. The recent acquisition of foodtech company Marketboro is seen as part of that effort. CJ Freshway said in a filing on Feb. 5 that it acquired an additional 1,657 shares in Marketboro for about 40.3 billion won. Including its existing stake, it now holds 3,314 shares, or 55 percent, securing a majority and becoming the largest shareholder. CJ Freshway previously made its first investment in June 2022, buying a 27.48 percent stake for about 40.3 billion won. Total acquisition spending is 80.6 billion won.

Apart from top-line growth, profitability is a task Lee must solve. Marketboro posted 26.1 billion won in revenue in 2024, up 77 percent from a year earlier, but remained in the red with an operating loss of 9.9 billion won. Marketboro rapidly increased cumulative transaction value as franchise owners placed orders by mobile and managed settlements, purchases and sales, but on-the-ground promotional spending and labour costs weighed on profitability.

CJ Freshway plans to combine its logistics network with Marketboro's technological capabilities over the long term. It aims to improve convenience in online platform purchases, from compiling data by identifying users' buying patterns to offering customised product suggestions. Lee said of the Marketboro acquisition, "I expect the combination of CJ Freshway's logistics network and Marketboro's technological capabilities will energise the overall online market."

CJ Freshway's internal IT management and control of related fixed-cost spending are also important issues. Platform growth requires substantial investment in labour costs, system maintenance and the building of security systems. As the food industry entered DT somewhat late after 2023, IT investment remains in the early-to-mid stage compared with other industries. CJ Freshway currently runs IT staff for online system management and other tasks across six teams.

The company expects limited cannibalisation between Freshen, its own online mall, and Sikbom, Marketboro's open-market platform for food ingredients. It said Sikbom is an open market for restaurant operators, while Freshen functions as a company-run mall focused on CJ Freshway private-brand products, meaning the platforms play different roles in what they sell. It aims to cover both Sikbom's more than 200,000 types of food ingredients and Freshen's 10,000 private-brand products.

A CJ Freshway official said Freshen, launched last year, is a company-run mall operated around CJ Freshway's own products and is a separate channel distinct from Sikbom, an open market. The official said customer needs and targets differ by channel, and the company plans to operate each separately according to customer characteristics.