Startups operating funeral service platforms are making inroads into the funeral market, which amounts to 10 trillion won, with services different from those of existing funeral companies. Although they lag behind in terms of revenue and awareness, assessments indicate that the market size is large and, considering future demographic changes, profitability is sufficient.
According to the funeral industry on the 29th, funeral service startups are offering services such as post-payment funeral services, bouquet business linked to obituary messages, funeral home management systems, and burial site comparisons. The aim is to lower the amount consumers have to pay through price comparisons and improve the efficiency of funeral home operations.
The 'Gooi Funeral Research Institute' launched its integrated funeral platform 'Gooi' in 2021, using post-payment funeral services as a weapon. Existing funeral companies provide a comprehensive range of services such as supplying goods and handling administrative tasks upon a funeral occurrence, after receiving advance payments divided based on contract duration. In contrast, Gooi Funeral Research Institute has designed its services so that consumers can choose only the services they want by specifying the cost for each item and pay only that expense. This has reduced the burden on consumers.
Although Gooi Funeral Research Institute is currently recording a deficit, it received an investment of 2.5 billion won last year after being recognized for its growth potential. Revenue was approximately 3.5 billion won last year, about three times the 2023 figure of approximately 1.2 billion won.
'Sangka' and 'Iris Corporation' are providing services such as bouquet business linked to obituary messages, funeral home management systems, and services for improving funeral planning and funeral home management. Each recorded sales of approximately 6.7 billion won and 4.2 billion won last year, respectively. Both companies are also recording low operating profits or deficits, but they are attracting consumers with their differentiated services.
A platform expert noted, 'Looking at the business content, a significant portion of fixed expenses will inevitably be invested in developing IT infrastructure, promotional activities for customer acquisition, and establishing partnerships with funeral homes and burial sites.' He said, 'The deficit for funeral service startups is between 100 million won and 600 million won, suggesting there is room to turn a profit.'
The domestic funeral market has grown to 10 trillion won based on advance payments, but startups still hold a low market share. Freed Life recorded advance payments of 2.22 trillion won and revenue of 276.5 billion won last year, followed by Boram Funeral Services (advance payments of 1.5 trillion won, revenue of 120.9 billion won) and Kyowon Life (advance payments of 1.45 trillion won, revenue of 125.5 billion won). Including these companies, Daemyung Station and The K Yeda Ham account for 75% of total sales.
While the market share of existing funeral companies remains solid, latecomers are entering the market, focusing on its potential.
Chotjang Company, the operator of the comprehensive funeral platform 'Chotjang,' which started as a corporate venture within Kyowon Group, spun off as an independent corporation in November last year. Chotjang Company, which offers services such as burial site comparisons in the metropolitan area, recorded approximately 110 million won in sales and an operating profit of 18.34 million won in its first month as an independent spinoff in November last year.
Jang Won-bong, CEO of Chotjang Company, said, 'More consumers are beginning to prepare for funerals in advance, similar to weddings,' and added, 'While startups are currently focusing on targeting one area in the funeral sector, in the future, all related procedures will be handled by a single funeral platform.'
An industry insider said, 'Currently, those in their 40s and 50s are the main consumers of funerals, but as younger generations, who are familiar with digital and mobile technologies, emerge as key consumers, there will be a significant change in the demand and consumption of funeral platforms in the market.'