SOCAR user count drops 26% as company revises 'SOCAR 2.0' goals

Korea's leading car-sharing company SOCAR is struggling to increase its user base. Due to the effects of economic recession, the demand for car-sharing has decreased, leading to a decline in SOCAR's average monthly users last year. As a result, SOCAR has conservatively lowered the target goals of its originally planned 'SOCAR 2.0' strategy.

According to the application information company Mobile Index on the 23rd, the monthly active user count for the SOCAR app recorded 708,559 in December of last year. This is a 26.8% decrease from 969,036 during the same period the previous year, resulting in a user loss of 260,477 over the year. Even considering the winter off-season, the user loss has reached a quarter compared to a year ago. This contrasts with the increasing number of users for taxi-hailing apps such as KakaoT and Uber.

Founded in 2012, SOCAR has led the trend in the domestic car-sharing market by innovating the inefficiencies of car ownership through car-sharing. SOCAR's car-sharing service allows users to rent cars via a mobile app. Users can rent any desired car anytime as long as they register their driver's license and payment card. Depending on the usage purpose, they can use the one-way service to return the car to a desired location, or request delivery to a specified location through the car delivery service. Notably, SOCAR has secured over 5,000 SOCAR zones across the country, allowing easy and quick access to car-sharing services.

Earlier, SOCAR established a management strategy to develop its app into a super app that encompasses not just car-sharing but also shared parking (Madu's Parking Lot) and electric bicycles (SOCAR E-Lek). However, car-sharing still constitutes an overwhelming 91% of total sales. To realize the super app strategy, SOCAR faces a situation where direct competition with companies like KakaoT and Uber is inevitable, especially as the user base of its core business, car-sharing, is dwindling.

The inability to expand its user base to middle-aged individuals is also identified as a weakness. SOCAR has gained popularity among users in their 20s and 30s who do not own cars, but it is facing difficulties in targeting users aged 40 and above, resulting in a perceived limit to its growth. According to SOCAR's own data analysis conducted last October, 8 out of 10 one-way usage cases were from the 2030 demographic. High rental fees compared to car ownership, inconvenience of having to return the vehicle to the location used, and high service fees are hindering effective targeting of the middle-aged audience.

In response, SOCAR will lower the goal of 'SOCAR 2.0' which it had initially set for this year. SOCAR 2.0 is a management strategy aimed at maximizing the lifecycle value (LTV) of vehicles and customers, which was announced in November 2023. Instead of reducing the volume of used car sales, SOCAR focuses on operating vehicles longer through its long-term car-sharing product 'SOCAR Plan.' Through this, SOCAR aims to achieve an annual revenue of 702 billion won and an operating profit of 10 billion won this year.

However, SOCAR has noted that while it will continue with the SOCAR 2.0 strategy, it will adjust its targets considering the market situation, including the economic recession. In reality, the securities industry is also significantly lowering its forecasts for SOCAR's performance compared to the SOCAR 2.0 targets. According to the financial data company FnGuide, SOCAR's revenue and operating profit are projected to be approximately 515.8 billion won and 20.3 billion won, respectively, in 2025.