Gmarket Reports Second Quarter 2008 Financial Results

SEOUL, SOUTH KOREA, Jul 29 (MARKET WIRE) --
Gmarket Inc. (NASDAQ: GMKT) ("Gmarket") announced today its financial and
operating results for the second quarter ended June 30, 2008.

Gmarket reported total revenues of Won 70.0 billion ($66.9 million) for
the second quarter of 2008, representing a 26% increase from total
revenues of Won 55.6 billion for the second quarter of 2007.

The Company's gross merchandise value ("GMV"), which represents the total
value of all items sold on Gmarket's website, increased by 25% to Won
971.1 billion ($927.7 million) for the second quarter of 2008 compared to
Won 780.0 billion for the same period in 2007. Transaction fee revenues
for the second quarter of 2008 were Won 37.4 billion ($35.7 million),
representing a 16% increase from Won 32.1 billion for the second quarter
in 2007. Advertising and other non-transaction revenues for the second
quarter of 2008 were Won 32.6 billion ($31.2 million), representing a 39%
increase from Won 23.4 billion for the same period in 2007.

Operating income for the second quarter of 2008 was Won 13.2 billion
($12.6 million), representing a 74% increase from Won 7.6 billion for the
same period in 2007.

Net income for the second quarter of 2008 was Won 16.1 billion ($15.4
million), representing a 91% increase from Won 8.4 billion for the same
period in 2007. Earnings per diluted share for the second quarter of 2008
increased to Won 317 or $0.30, up from Won 167 for the same period in
2007.

"We are pleased with our second quarter performance and the progress with
our initiatives. We are continuing to strengthen our growth drivers by
focusing on emerging categories including food and lifestyle products and
developing categories for future opportunities," said Young Bae Ku, Chief
Executive Officer of Gmarket. "Through improved operational efficiency and
expanding advertising revenue streams, we are continuously increasing our
profitability."

During the second quarter of 2008, the Company's registered user base grew
to approximately 14.7 million from 14.3 million registered users at the
end of the first quarter of 2008. In addition, the Company averaged 18.7
million monthly unique visitors in the second quarter of 2008, compared to
17.6 million unique visitors during the second quarter of 2007.

On June 27, 2008, the Company was granted renewal of its status as an
eligible venture Company under the Special Tax Treatment Control Law of
Korea. This renewal entitles the Company to a reduced tax rate of 13.75%,
which is 50% of the statutory tax rate, for taxable income directly
generated from operations, effective until 2008. This discounted tax rate
was not applied in the first quarter 2008 as the Company had deemed that
renewal of the 13.75% rate was not probable at that time.

Investor Conference Call / Webcast Details

The Company's management will review detailed second quarter 2008 results
on Tuesday, July 29, 2008 at 6:00 p.m. U.S. Eastern Time (7:00 a.m., July
30, 2008 in Seoul, South Korea). A live webcast of the conference call
will be available on Gmarket's website at www.gmarket.co.kr/IR/.

Dial-in details for the conference call are as follows:

US: +1 800 884 5695 or +1 617 786 2960
Hong Kong: +852 3002 1672
Singapore: +65 6823 2164
U.K.: +44 207 365 8426
Korea: +82 00 308 13 1153
Password for all regions: Gmarket

A replay of the call will be available beginning July 29 at 8:00 p.m.
U.S. Eastern Time (9:00 a.m., July 30, 2008 in Seoul) at
www.gmarket.co.kr/IR/ and by telephone at +1 888 286 8010 or +1 617 801
6888 with passcode 92291558 (telephone replay available through 10:59
a.m. on August 6, 2008 U.S. Eastern Time (11:59 p.m., August 6, 2008 in
Seoul)).

Notes: (1) The Dollar amounts provided in this release are based on an
exchange rate of Won 1,046.80 to US$1.00, which is the noon buying rate in
effect on June 30, 2008 as quoted by the Federal Reserve Bank of New York.
(2) GMV should not be construed as an alternative to revenues or any other
measure of performance determined in accordance with U.S. GAAP. Other
companies may determine GMV in a different manner than Gmarket does.

About Gmarket

Gmarket Inc. is a leading retail e-commerce marketplace in Korea, offering
buyers a wide selection of products at competitive prices and sellers a
comprehensive and flexible sales solution. Gmarket's e-commerce
marketplace is highly scalable and facilitates the sale of products in
small or large quantities to a large number of potential buyers in a
convenient, cost effective and secure manner. Gmarket's e-commerce
marketplace is located primarily at www.gmarket.co.kr.

Safe Harbor Under the Private Securities Litigation Reform Act of 1995

Certain statements in this filing on Form 6-K may include, in addition to
historical information, "forward-looking statements" within the meaning of
the "safe-harbor" provisions of the U.S. Private Securities Litigation
Reform Act of 1995. Forward-looking statements can generally be identified
by the use of forward-looking terminology, such as "may," "will,"
"expect," "intend," "estimate," "anticipate," "believe," "project,"
"continue," "plan" or "predict" or the negative thereof or other similar
words, although not all forward-looking statements will contain these
words. These forward-looking statements are based on the Company's current
assumptions, expectations and projections about future events. All
forward-looking statements involve risks and uncertainties that may cause
the Company's actual performance, financial condition or results of
operations to be materially different from those suggested by the
forward-looking statements, including, but not limited to, the Company's
ability to diversify revenues; the Company's ability to compete
effectively in a highly competitive industry; the Company's ability to
anticipate and access technological developments in the Company's
industry; the Company's ability to recruit and retain quality employees
as the Company grows; the Company's ability to implement the Company's
growth strategies; and economic and political conditions in and outside
of Korea. Investors should consider the information contained in the
Company's submissions and filings with the SEC, including the Company's
registration statement on Form F-1, as amended, together with such other
documents as the Company may submit to or file with the SEC from time to
time, including on Forms 20-F and 6-K. The forward-looking statements
speak only as of this filing on Form 6-K and the Company assumes no duty
to update them to reflect new, changing or unanticipated events or
circumstances.

GMARKET INC.
UNAUDITED BALANCE SHEETS

(in millions of Korean Won and in thousands of US dollars)

December 31, June 30, June 30,
2007 2008 2008
------------ ------------ ------------
Assets
Current assets:
Cash and cash equivalents W48,367 W55,051 $ 52,590
Cash on deposit 190,000 213,275 203,740
Restricted cash 8,110 10,100 9,648
Accounts receivable, net 52,565 54,659 52,215
Other current assets 8,120 12,956 12,377
------------ ------------ ------------
Total current assets 307,162 346,041 330,570
Property and equipment, net 23,577 28,165 26,906
Other assets 6,305 8,736 8,345
------------ ------------ ------------
Total assets W337,044 W382,942 $ 365,821
------------ ------------ ------------

Liabilities and Shareholders' Equity
Current liabilities:
Amounts payable to sellers W147,300 W152,630 $ 145,806
Accounts payable 22,727 28,180 26,920
Deferred revenue and advances 5,196 6,217 5,939
Loyalty program reserves 8,619 9,773 9,336
Other current liabilities 8,336 10,299 9,838
------------ ------------ ------------
Total current liabilities 192,178 207,099 197,839
Other liabilities 3,268 4,573 4,368
------------ ------------ ------------
Total liabilities 195,446 211,672 202,207
------------ ------------ ------------
Shareholders' equity:
Common shares 4,975 5,006 4,783
Additional paid-in capital 88,080 91,302 87,221
Accumulated other comprehensive
income - 16 15
Retained earnings 48,543 74,946 71,595
------------ ------------ ------------
Total shareholders' equity 141,598 171,270 163,614
------------ ------------ ------------
Total liabilities and shareholders'
equity W337,044 W382,942 $ 365,821
------------ ------------ ------------

GMARKET INC.
UNAUDITED STATEMENTS OF INCOME

(in millions of Korean Won and thousands of US dollars,
except per share data)

Three Months Ended June 30,
-----------------------------------
2007 2008 2008
----------- ----------- -----------
Revenues:
Transaction fees W32,129 W37,392 $ 35,720
Advertising and other 23,438 32,621 31,163
----------- ----------- -----------
Total revenues 55,567 70,013 66,883
Costs and expenses:
Cost of revenues 29,253 36,474 34,844
Sales and marketing 13,111 13,493 12,889
General and administrative 5,612 6,862 6,555
----------- ----------- -----------
Total costs and expenses 47,976 56,829 54,288
----------- ----------- -----------
Operating income 7,591 13,184 12,595
Other income (expense):
Interest income 2,066 3,467 3,312
Others, net (99) 149 142
----------- ----------- -----------
Income before income tax expenses 9,558 16,800 16,049
Income tax expenses (1) 1,141 719 687
----------- ----------- -----------
Net income W8,417 W16,081 $ 15,362

Net income per share - basic W169 W321 $ 0.31
Net income per share - diluted 167 317 0.30
Weighted average number of shares -
basic 49,657,529 50,046,277 50,046,277
Weighted average number of shares -
diluted 50,524,504 50,798,090 50,798,090

Six Months Ended June 30,
-----------------------------------
2007 2008 2008
----------- ----------- -----------
Revenues:
Transaction fees W62,366 W74,205 $ 70,887
Advertising and other 41,252 60,457 57,754
----------- ----------- -----------
Total revenues 103,618 134,662 128,641
Costs and expenses:
Cost of revenues 54,849 70,594 67,438
Sales and marketing 25,358 26,417 25,236
General and administrative 10,371 14,151 13,518
----------- ----------- -----------
Total costs and expenses 90,578 111,162 106,192
----------- ----------- -----------
Operating income 13,040 23,500 22,449
Other income (expense):
Interest income 4,119 6,611 6,315
Others, net (24) 283 270
----------- ----------- -----------
Income before income tax expenses 17,135 30,394 29,034
Income tax expenses (1) 2,039 3,991 3,812
----------- ----------- -----------
Net income W15,096 W26,403 $ 25,222

Net income per share - basic W304 W529 $ 0.51
Net income per share - diluted 299 521 0.50
Weighted average number of shares -
basic 49,582,287 49,899,610 49,899,610
Weighted average number of shares -
diluted 50,484,722 50,692,036 50,692,036

(1) On June 27, 2008, the Company was granted renewal of its status as an
eligible venture Company under the Special Tax Treatment Control Law 0f
Korea. This renewal entitles the Company to a reduced tax rate of
13.75%, which is 50% of the statutory tax rate, for taxable income
directly generated from operations, effective until 2008. This
discounted tax rate was not applied in the first quarter 2008 as the
Company had deemed that renewal of the 13.75% rate was not probable at
that time. The higher tax rate had a negative impact on our first
quarter 2008 EPS by 3 cents.

GMARKET INC.
UNAUDITED STATEMENTS OF CASH FLOWS

(in millions of Korean Won and thousands of US dollars)

Three Months Ended June 30,
----------------------------
2007 2008 2008
-------- -------- --------
Cash flows from operating activities:
Net income W8,417 W16,081 $ 15,362
Adjustments
Depreciation and amortization 1,534 2,179 2,082
Stock-based compensation expense 400 691 660
Provision for bad debt 95 - -
Provision for severance benefits 353 627 599
Deferred tax assets (573) (598) (571)
Provision for loyalty program reserves 1,323 1,713 1,636
Others, net 118 (49) (47)
Changes in operating assets and liabilities
Accounts receivable (5,577) (1,489) (1,423)
Amounts payable to sellers 6,881 (7,094) (6,777)
Accounts payable 2,999 6,286 6,005
Accrued income (1,198) (1,611) (1,539)
Other assets, net (1,196) (1,833) (1,752)
Other current liabilities (1,577) 254 243
Payment of accrued severance benefits (136) (150) (143)
-------- -------- --------
Net cash provided by operating activities 11,863 15,007 14,335
-------- -------- --------
Cash flows from investing activities:
(Increase) in cash on deposit, net (17,233) (11,522) (11,007)
(Increase) in restricted cash, net - - -
Purchase of property and equipment (1,260) (6,306) (6,024)
(Increase) in other assets, net (140) (1,606) (1,533)
-------- -------- --------
Net cash (used in) investing activities (18,633) (19,434) (18,564)
-------- -------- --------
Cash flows from financing activities:
Issuance of common shares, net 130 2,071 1,978
-------- -------- --------
Net cash provided by financing activities 130 2,071 1,978
-------- -------- --------
Net increase (decrease) in cash and cash
equivalents (6,640) (2,356) (2,251)
-------- -------- --------
Cash and cash equivalents:
Beginning of period 37,954 57,407 54,841
-------- -------- --------
End of period W31,314 W55,051 $ 52,590
-------- -------- --------

Six Months Ended June 30,
----------------------------
2007 2008 2008
-------- -------- --------
Cash flows from operating activities:
Net income W15,096 W26,403 $ 25,222
Adjustments
Depreciation and amortization 3,005 4,308 4,115
Stock-based compensation expense 637 1,161 1,109
Provision for bad debt 146 133 127
Provision for severance benefits 771 1,315 1,256
Deferred tax assets (1,028) (594) (567)
Provision for loyalty program reserves 2,167 3,096 2,957
Others, net 114 (43) (41)
Changes in operating assets and liabilities
Accounts receivable (6,167) (2,211) (2,112)
Amounts payable to sellers 12,575 5,330 5,092
Accounts payable 374 5,452 5,209
Accrued income (1,384) (1,973) (1,885)
Other assets, net (1,735) (2,404) (2,297)
Other current liabilities 332 1,042 995
Payment of accrued severance benefits (162) (229) (218)
-------- -------- --------
Net cash provided by operating activities 24,741 40,786 38,962
-------- -------- --------
Cash flows from investing activities:
(Increase) in cash on deposit, net (24,653) (23,022) (21,993)
(Increase) in restricted cash, net (110) (1,990) (1,901)
Purchase of property and equipment (3,693) (8,870) (8,473)
(Increase) in other assets, net (31) (2,314) (2,210)
-------- -------- --------
Net cash (used in) investing activities (28,487) (36,196) (34,577)
-------- -------- --------
Cash flows from financing activities:
Issuance of common shares, net 130 2,094 2,000
-------- -------- --------
Net cash provided by financing activities 130 2,094 2,000
-------- -------- --------
Net increase (decrease) in cash and cash
equivalents (3,616) 6,684 6,385
-------- -------- --------
Cash and cash equivalents:
Beginning of period 34,930 48,367 46,205
-------- -------- --------
End of period W31,314 W55,051 $ 52,590
-------- -------- --------

GMARKET INC.
UNAUDITED SUPPLEMENTAL OPERATING DATA

2007 2008
=========================== =============
1Q 2Q 3Q 4Q 1Q 2Q
====== ====== ====== ====== ====== ======
G M V
(in billions of Won)(1) 723.0 780.0 775.6 970.0 933.4 971.1
====== ====== ====== ====== ====== ======
Registered Users(2) (000) 11,754 12,408 12,981 13,674 14,260 14,735
====== ====== ====== ====== ====== ======
Average Monthly Unique
Visitors(3) (000) 16,931 17,581 17,925 18,712 17,861 18,651
====== ====== ====== ====== ====== ======

(1) Represents the aggregate value of all products sold on the Company's
website for the period. GMV is commonly used in the e-commerce
industry to measure a company's operating performance as transaction
fees depend in part on GMV. GMV should not be construed as an
alternative to any measure of performance determined in accordance
with U.S. GAAP. Other companies may determine GMV in a different
manner to Gmarket.

(2) Registered Users include both buyers and sellers who have registered
with the Company as of the end of the period.

(3) Average monthly unique visitors represents the average number of
monthly unique visitors to the Company's website during the period,
measured and announced by Metrix Corporation, a Korean Internet
research company. Other research companies' results may differ.

Contacts
Paul J. Lee
Gmarket Inc.
+82-2-3016-4372
Email Contact

In the U.S.
John Robertson
The Ruth Group
+1-646-536-7024
Email Contact

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