Amazon eyes Korea’s online market

2014-01-14 16:34

Amazon eyes Korea’s online market

By Choi Kyong-ae

Amazon.com is expected to increase efforts to enter the Korean market, according to industry sources, Tuesday. Amazon’s recent recruitment of Doug Yeum, the former chief of Google Korea, is fueling speculations that the world’s largest online retail company is moving to take advantage of a growing demand in Korea’s online shopping market.  Doug Yeum took the helm as general manager at Amazon Web Services (AWS) Korea early this month, six months after he quit Google Korea as managing director in August last year, according to people familiar with the matter.

AWS Korea is the cloud computing services affiliate of the U.S. retail giant. Through cloud computing, Amazon manages data from its corporate clients across the globe renting them processing power and storage.
As he was rumored to step down from Google Korea to take responsibility for sluggish sales in Korea during his two-year leadership, the new post at Amazon is seen in the market as “another litmus test” for the 41-year-old executive.
“Amazon is making efforts to expand its cloud computing customer base in Korea. At the same time, many industry people regard Yeum’s joining of AWS Korea as Amazon’s initial step to making inroads into the growing domestic online shopping market,” an executive from a burgeoning online shopping mall operator told The Korea Times by telephone.
She said Amazon executives have been meeting their counterparts in the online business department at Kyobo Book Centre and Yes24, a quick delivery service of books, in the past two years.
“This clearly shows Amazon has kept a strong interest in starting an online-shopping related business in Korea,” said the female executive.
Currently, Korean clients for Amazon’s cloud computing services include Samsung Electronics, LG Electronics, online game company Nexon Korea and Seoul National University, according to local reports.
Yeum was not available for comment. AWS Korea declined to comment.
But Yeum told a local newspaper that Amazon Corporate Services Korea, a business entity set up by Amazon last year, is “still at a toddler’s stage and I cannot say anything on whether Amazon has a plan to enter orea or not.”
Yeom studied electronic and computer engineering at the Massachusetts Institute of Technology.
Industry people, at both online and offline shops, said the young, tech-savvy leader faces not only challenges but also opportunities in technology-related appointment.
“As he worked for Google for seven years, he could make the best use of his experience and knowhow he learned at the technology giant for Amazon’s expansion in Korea,” said an official at 11ST, a local online shopping mall.
A growing number of Koreans are buying products from overseas online shopping malls such as Amazon due to lower prices and Amazon may expect a great boost from the changing consumer trend here, he said.
Still, an executive from Shinsegae Group said Amazon may have difficulties settling down in Korea if they don’t have specific plans in terms of investment and a logistics center for a rapid delivery of ordered goods.
“At stake is how well Amazon can adapt itself to a different market though it already has a sizable number of customers in Korea,” said the executive.
Faced with a possible march by Amazon into the local market, online and offline players said they will strengthen customized services in order not to lose Korean customers to the U.S. company.