BALAAN and the Era of Major Re‑Bundling

According to News1 and Yonhap Infomax, South Korea’s luxury commerce platform BALAAN has entered into corporate rehabilitation proceedings. Unlike bankruptcy, corporate rehabilitation is a process aimed at continued operation of the company by adjusting its debt and coordinating the interests of creditors, shareholders, and other stakeholders.

On March 4, BALAAN raised 15 billion won from Silicon Two at a valuation of 30 billion won, just one-tenth of its previous 300 billion won valuation. Of this, 7.5 billion won was initially invested in the form of CBs (convertible bonds), but controversy erupted when, on the 24th, BALAAN notified marketplace sellers that settlements would be made 2–3 days later than scheduled. Some sellers who visited BALAAN’s office for an emergency meeting presented what they claimed was evidence that the company was delaying settlement payments while preparing for rehabilitation, and as of the 26th BALAAN switched to remote work, fueling concerns that this could escalate into a second TMON/WeMakePrice-style crisis.

In 2020, as the COVID‑19 pandemic triggered a temporary global economic crisis and liquidity surged in response, vertical services ("vertical" refers to a business with deep specialization or a highly focused service in a particular field) sprang up everywhere. Buoyed by a spike in luxury spending, domestic luxury e‑commerce verticals such as Must’It, Trenbe, and BALAAN (often grouped together as “Meot‑Bal,” short for Must’It, Trenbe, BALAAN) each raised hundreds of billions of won in funding on the back of rapidly growing transaction volumes.

These players built their vertical e‑commerce businesses on the hypothesis that luxury consumption would move online, leveraging lower prices than department stores and the convenience of mobile apps. But as we entered a high‑interest‑rate era, overall luxury spending slowed, and because their core customers were price‑sensitive consumers, their sales fell sharply, raising serious doubts about the sustainability of their long‑term profit models.

As I argued earlier, the domestic e‑commerce market would eventually be split between Coupang and Naver—with Coupang ultimately emerging as the winner. In line with that prediction, last year’s non‑payment of settlement funds at Qoo10 affiliate e‑commerce platform TMON/WeMakePrice effectively ended what had resembled a Warring States period in Korean e‑commerce. The market has since been reshaped, with Coupang consolidating its position as the clear number one and Naver left struggling to catch up.

When the economy is expanding in quantitative terms, people with fuller wallets develop diverse interests, and vertical platforms that focus on just one thing gain popularity. But when the cycle turns to tightening, platforms that can deliver multiple services at once so users can extract maximum utility from limited resources regain the upper hand. The rise of verticals is known as “unbundling,” and the subsequent reintegration of these services is called “bundling.”

If you read my March 2023 Facebook post on Netflix (NFLX) above, it becomes easier to understand the bundling phenomenon. Bundling has recently accelerated in the streaming (OTT) industry because, as I noted in that post, Netflix is effectively the only streaming company generating meaningful profits. Disney (DIS), which had stopped licensing its content to rival streaming platforms when it launched Disney+, is once again supplying content to Netflix, and U.S. cable TV company Comcast has begun selling bundles that package multiple streaming services such as Netflix, Hulu, and Apple TV+. Today, SK Square CEO Han Myung-jin also stated that "the merger review of TVING and Wavve is underway," underscoring that the consolidation of domestic streaming platforms—through mergers and restructuring—is proceeding entirely out of necessity.

The same logic applies across many other industries, with the software market being one of the most representative examples.

In 2024, Microsoft (MSFT) generated about $245 billion in annual revenue, while Salesforce recorded $9.9 billion. By contrast, the entire Korean SaaS (Software as a Service) market is only around $2.5 billion, meaning the gap with a single leading global SaaS company is several dozen times. This disparity goes beyond simple market size; it reflects fundamental differences in product strategy, customer lock‑in mechanisms, and the competitive strength of integrated platforms.

There are many vertical SaaS startups specializing in specific industries, but most remain fragmented, feature‑level solutions. A few exceptions—such as Sendbird, Moloco, and Channel Corporation—have secured global customers and are expanding into integrated B2B platforms, but these cases are still rare.

Compared with Japanese SaaS companies, which are going public with annual recurring revenue (ARR) in the hundreds of billions of won, Korean SaaS remains a latecomer in terms of global expansion and structural bundling capabilities.

Being functionally specialized is no longer a competitive edge. What companies truly need is a default infrastructure that can naturally orchestrate workflows across the entire organization.

SaaS, in the end, is a platform game. The question is no longer about the capabilities of an individual SaaS tool, but how many capabilities can be delivered within a consistent UX and cost structure. As Microsoft and Salesforce have demonstrated, the SaaS market is shifting into an era where the competitive advantage lies not in “tools” but in the overall “environment.”