Korean online stores brace for Amazon’s arrival

2014-03-17 16:58

Online stores brace for Amazon’s arrival

By Park Ji-won
The nation’s major online stores are diversifying their stock and offering a host of promotional events to strengthen their customer base ahead of the arrival of the world’s largest online retailer, Amazon.
Amazon, which recently opened a Korean office, is expected to start operating this year.
Online shopping malls such as Gmarket, 11ST, as well as social commerce sites are overhauling their business strategies to develop unique and mobile commerce services.
Gmarket, eBay’s Korean online shopping unit, is upgrading its social commerce webpage G9 and mobile commerce business to capture more customers and retain existing ones.
The online shop said it will boost its mobile commerce services throughout the year, starting by launching an e-coupon corner last January, which sells up to 70 mobile coupons for a wide range of stores from bakeries to beauty stores.
The online shop increased the number of G9 product deals from nine to 150 in April last year. It also improved its web interface to launch additional product categories.
SK Planet’s online store 11ST boosted its services by adding unique selling items to its deal-of-the-day service, Shocking Deal, this year. The firm increased the number of luxury goods tenfold. It sells some 2,000 products on Shocking Deal and plans to increase this number to 7,000 this year.
It also held some attractive promotions. For example, on March 10, the firm sold its limited edition Leica M9-P “Edition Hermes” camera on Shocking Deal for 29.9 million won, 17 percent lower than its original price.
SK Planet also boosted its mobile commerce business by launching Baro Mart in November last year, offering popular supermarket products and delivers them to customers at no charge.
Meanwhile, social commerce sites are preparing for Amazon’s arrival by building warehouses.
Ticket Monster is looking for a site for its new warehouse near Seoul because it aims to expand its fresh food delivery services this year, an official at the firm said. It currently has a 4,950 square meter warehouse. It also launched a service that enables customers to buy directly from overseas online stores in November last year.
WeMakePrice said it finished building a 19,800 square meter warehouse in Gwangju, Gyeonggi Province last month and plans to move all its products to the new warehouse in a few months.
Coupang has leased a 15,500 square meter warehouse in Paju, Gyeonggi Province, in addition to its current 10,900 square meter warehouse, according to the Chosun Ilbo on Feb. 10.
“Korean online firms are working to raise customers’ loyalty and brace for Amazon’s arrival,” said analyst Young Ryu at Daewoo Securities.
“Accordingly, they will boost aspects of their services such as delivery, product quality and unique content, the way Interpark has upgraded its travel and entertainment ticket services. Online stores that don’t have their own unique characteristics won’t survive when Amazon starts its business here.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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