E-commerce platform companies that gained popularity for their early-morning delivery services in South Korea are rushing to tap the local stock market, which is enjoying high liquidity and increased investors’ appetite for initial public offering shares.

Competition among early-morning delivery platforms -- Shinsegae Group’s online mall arm SSG, Market Kurly and Oasis -- is becoming fierce, with some market watchers believing those who go public ahead of their rivals may have a higher chance of dominating the market.

With several online retailers eyeing IPOs, competition has also been heating up for selecting underwriters, according to investment banking sources.

After withdrawing its plan to go public in the US, Market Kurly is aiming to debut on the market here in the first half next year. But the e-commerce grocer is facing pressure to pick up the pace with choosing underwriters as its rival SSG sent requests Friday to seven domestic and global brokerages for proposals ahead of selecting lead managers for its IPO.

Shinsegae’s e-commerce arm has not confirmed the specific time for its market debut yet, however, it is widely expected to go public in 2022, a year earlier than it was previously anticipated, the insiders said.

To avoid conflict of interest, brokerage houses only choose to participate in one company’s IPO in the same industry. One investment banking official, who spoke on condition of anonymity, said brokerage houses appear to be leaning toward SSG, rather than Market Kurly.

The main consideration is the underwriting fee, the payment that brokerages earn as commission for underwriting a public offering, which is worth around 0.8 percent of the total amount a company raises through its IPO. An additional 0.2 percent performance fee follows as an incentive of completing a successful IPO, meaning that the larger deal brings a bigger payoff for IPO managers.

Market insiders value SSG at around 9-10 trillion won ($7.63-$8.5 billion), while Market Kurly is estimated at 2.5 trillion won so far. Although the company’s market valuation after listing is anticipated to reach between 4 to 5 trillion won, that is still less than half the size of SSG. That is why Shinsegae’s e-commerce unit has become a high-profile IPO deal among securities firms.

Oasis, which operates its own fresh-food delivery service Oasis Market, has kicked off its IPO process ahead of SSG and Market Kurly. The company picked NH Investment & Securities and Korea Investment & Securities as its lead underwriters under the goal of going public next year. Its valuation is around 750 billion won so far.

“Unlike offline markets here, online delivery service platforms especially those providing early-morning deliveries have achieved a rapid growth during the pandemic. ... To compete with other service providers such as the US-listed Coupang and immediate delivery service operators, e-commerce companies need massive amount of funds,” one industry insider said.

“Especially those firms with (market) competitiveness tend to ‘strike while the iron is hot’ as abundant capital is much-needed. Their desire for successful IPOs creates a fiercer competition with rivals and even among potential underwriting companies.”