Top 3 social commerce websites dominate Korean online shopping scene

Top 3 social commerce websites dominate Korean online shopping scene

Coupang, We Make Price and Ticket Monster are employing aggressive visual marketing and beefing up their customer service
ticket monster
Ticket Monster is one of the top three social commerce sites in Korea. Contrary to what its name implies, it does not exclusively sell tickets, but offers discounts across various categories.

Seoulites’ penchant for aggressive bargain-hunting, combined with the fact that Seoul is the most wired city in the world, makes for fertile ground for social commerce. 

The U.S. Groupon business model, tweaked with a few localized specifications, has taken off explosively in Korea despite being introduced only last year. 

Industry sources estimate that more than 500 business social commerce websites now operate in Korea.

“I think it’s a great way to step out of the rut and try something new,” said Jae-eun Shim, 31, on why she shops frequently on social commerce sites. “I’ve tried personal training sessions, watched a really good musical and indulged in a facial at half the original price all through social commerce offerings.

Shim, a radiologist trainee, said if it weren’t for these deals, she would have spent her free time just channel surfing at home or hanging out in cafés. 

“We design and offer a palette of suggestions to our customers to venture out and try a diverse range of experiences including vocal lessons, going to the opera and windsurfing,” said Coupang’s PR Manager Mihee Yoo. “[These experiences] improve the ‘quality of life.” 

Top 3

In a saturated market, the three biggest players are flexing their muscle and jockeying for the biggest edge. 

Reaching double-digit growth in sales in less than a year, Ticket Monster, Coupang, and We Make Price posted a combined sale of 45 billion ($42.21 million) in May 2011. Combined sales in June for the three companies is expected to reach reach over ₩60 billion. 

 

With sales racking up and business growing fast, these three players have their hands full securing good deals on a daily basis, trouble-shooting, and looking for ways to further expand their market share. 

Industry sources estimate that at the current pace of growth, the social commerce market in Korea will reach ₩500 billion ($470 million) in terms of annual sales by the end of this year. 

Visual marketing

Coupang Coupang is the first social commerce site to use hallyu celebrities in advertisements. Currently, the sites are hard to differentiate from one another, as they all offer similar products and services across a range of items and services including restaurant coupons, spas and other aesthetic treats, various exhibits and performances, and travel packages. 

In contrast to their overseas counterparts, the local social commerce sites are very much visually oriented, relying heavily on tens of high-definition photographs per item. 

On the other hand, U.S. sites rely more on their unique writing, which delivers a narrative to package an experience. The New York Times recently ran an article highlighting how Groupon’s in-house writers painstakingly trawl for the right metaphors to tug at the potential customers’ heartstrings. 

Quality first 

“Quality check comes foremost in the list,” says Jaehyun Kim, the marketing representative from We Make Price. “Then, we make sure the business has a service-oriented mind-set. Location, business capacity and other criteria are thoroughly examined to determine if the customers will find the venue ‘attractive’ enough to sign up for the deal.”

We Make Price currently employs more than 200 merchandisers who scour the city for good deals. 

Increasing complaints 

Recently however, social commerce sites have been catching flak for aggressive marketing strategy and compromised customer-service as complaints to the Consumer Protection Board increased fivefold in the last few months. 

Consumers cited concerns about inflated advertisements, low service quality received through the deals and refund refusals. 

As a result of these complaints, the Fair Trade Committee ruled in May that social commerce sites are now classified as “telecommunications business providers” instead of as “brokers” in accordance with the Electronic Commerce Consumer Protection Law.

This means social commerce sites now have to honor a seven-day return policy. 

Coupang was the first to follow this injunction. “Not only do we exercise the seven-day refund policy but also, early this year, we built up a team of 100 CS professionals and operate a call center, ‘Happy Call,’ to address all purchase-related inquiries,” says Coupang’s PR manager, Mihee Yoo. 

Meanwhile, We Make Price became the first industry player to receive consumer inquiries and concerns through Twitter.  

Global expansion 

Flushed with domestic success, Ticket Monster has recently announced that it has acquired Integrated Methods, Sdn Bhd a parent company of the Malaysian social commerce provider Everyday Price.  

“The company aspires to be one of the top global contenders like Groupon and LivingSocial. After Malaysia, we plan to branch out to other parts Asia and become an active global player,” says Sojung Kim, Ticket Monster’s marketing representative.

The companies are making great effort to set good examples in domestic social do-goodery as well. 

We Make Price donated money raised by setting aside ₩100 per coupon sold in March to Good Neighbors, a global charity organization.  

In April, Coupang designated specific products as ‘To Share Items’, and donated ₩20 million raised through its sales to child cancer patients. 

A Seoul native who was schooled in the United States, Lindsey Kim is a freelance journalist and translator with academic and professional background in English literature, global affairs and business. She enjoys traveling to new locales, discovering tasty treats and scintillating sceneries. These days, she is rediscovering the enduring charms of strong hand-drip coffee and jazz music.

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