• Tuesday , 16 July 2019

Cashback news – May 30: South Korea e-commerce news roundup and trends

South Korea e-commerce 2South Korea is the world’s seventh largest e-commerce market and its residents are huge mobile users. Today, we look at recent news and trends in e-commerce and retail in the fast-growing market of South Korea. With e-commerce penetration at 65%, KOSTAT reports the most popular products are travel related, clothing and fashion. For the first time, in Q1 2016, South Korea’s e-commerce exports exceeded its imports with $421 million in sales, according to Statistics Korea. The government has pledged to establish South Korea as one of SE Asia’s most popular locations for startups and venture capital.

With estimated 2015 sales of $1.6 billion, South Korean e-commerce firm Coupang’s success has prevented Amazon from entering the market. Despite losses of $330 million, Coupang CEO Bon Kim said the company will continue to expand. Alibaba Group paid $29.8 million to acquire 4% of South Korea’s SM Entertainment, one of South Korea’s largest record labels, distributors and producers of film and TV. French fashion brand Hermes is doing well in South Korea with sales up 27.9% in 2015. It’s popular $10,000 Birkin handbag reportedly has a waiting list of more than 1,000 consumers.

Althea beauty products is expanding quickly across SE Asia from its South Korea headquarters and Malaysian operations. Lotte  Department Store opened a BMW Café inside its flagship Inchon location. Lotte  Department Store is also testing a virtual-reality fitting service several stores. “Liquor samplers” are the latest buzz in trendy South Korean restaurants and bars, allowing customers to taste their makgeolli – a traditional Korean rice wine – before deciding which brand to choose.

Ecommerce in South Korea: Aggressive Discounting, Rewards

11 Street South Korea marketplaceSouth Korea is the seventh largest retail ecommerce market in the world and the third largest in Asia-Pacific, after China and Japan. It boasts the fastest Internet speeds in the world, which drives one of the highest ecommerce penetration rates in Asia-Pacific of close to 65 percent.

Ecommerce comprises roughly 10 percent of retail sales in the country. Two dominant ecommerce sites in the country are marketplaces: Gmarket and 11street. A third major site, Coupang, launched a marketplace recently that already has 25,000 sellers. Marketplaces, in other words, are popular in South Korea — like in Japan, which I profiled last month in “Ecommerce in Japan: Marketplaces Dominate.”

Ecommerce has grown significantly over the years in South Korea. Coupang is likely the fastest growing. The company is valued at $5 billion. It has raised $1.5 billion since its launch in 2010, making it the third most-funded startup, after Uber and Flipkart.

The largest ecommerce category in South Korea is travel-related products and services, followed by clothing and fashion, and then household goods. This is based on data from KOSTAT, a South Korean statistics and analysis service. Via practicalecommerce.com

S.Korea’s e-commerce exports surpass imports for 1st time in Q1

South Korean shoppersSouth Korea’s e-commerce exports surpassed imports for the first time in the first quarter as Chinese consumers increased their purchase of cosmetics and clothing via the Internet, a government report showed on Monday.

Online sales to overseas consumers amounted to 478.7 billion won (US $421 million) for the first three months of this year, up 84.5 percent from a year earlier, according to Statistics Korea.

The figure exceeded online purchase from overseas manufacturers for the first time at 446.3 billion won in the first quarter, up 5.7 percent from a year ago. The statistical agency said that Chinese and Japanese consumers increased online purchase of locally made products thanks to popularity of South Korean pop music and soap operas such as “Descendants of the Sun.” Via shanghaidaily.com

Tech in Asia – Connecting Asia’s startup ecosystem

South Korea's startup sceneFour years ago, when Park Geun-hye was running for president, she told South Koreans that their country was in dire need of new growth sources. Youth unemployment was reaching new highs, and people were keenly aware that powerhouses like Samsung and Hyundai were struggling against global competition. Her solution was a “creative economy” drive to reform job creation and create a startup ecosystem from scratch.

Elected in 2012, her team has been serious about that pledge. They’re bringing big businesses into the fold and promoting new startup hubs all over the country, overseas educational trips for aspiring startups, and employment centers for wannabe entrepreneurs. Developing 5G for faster internet on smartphones is another priority.

Recently, the government pledged to put Korea in the top seven countries for startup accelerators. All that work is starting to pay off. Via techinasia.com

A $5 Billion South Korean Startup Is Beating Amazon At Its Own Game

CoupangJeff Bezos has no interest in bringing Amazon to the 51 million people in South Korea, and Bon Kim is the reason for that. Kim is the CEO of Coupang, the fastest growing e-commerce site of all time in South Korea. The startup, founded in 2010, grossed nearly $300 million in 2014 and it expects to show quadruple that amount in 2015, when those numbers are available. Last summer, Coupang raised $1.3 billion in funding. Kim has a 19% stake in the company, which gives him a net worth of $950 million.

Kim and Coupang have mastered something Jeff Bezos and Amazon are still trying to figure out. Coupang offers on-demand e-commerce with same-day delivery. Amazon is trying to offer this to its bajillion customers, but so far, hasn’t been able to make the margins work. It is either too expensive for the consumer or for Amazon and often for both. Remember, Coupang was founded in 2010, the company has managed to do this in remarkably less time in business than Amazon. Via celebritynetworth.com

Coupang vows aggressive expansion despite losses

Coupang, Korea’s leading e-commerce site, said Thursday it will continue to expand its delivery network and hire more workers to stay ahead of its rivals, despite huge losses last year.

The company is estimated to have lost nearly 400 billion won ($330 million) in 2015 as it spent substantial amounts of money to employ more delivery personnel and construct warehouses at the sacrifice of profitability.

Analysts have raised concerns over Coupang’s financial health. They say even though it has attracted huge investments from SoftBank and other entities in recent years, the company could face a liquidity problem if it fails to turn around. However, company officials dismissed such concerns, saying that the e-commerce site has enough cash to cope with losses. They say now is the time for Coupang to expand its size to strengthen its leadership in the country’s rapidly growing, increasingly competitive online shopping industry. Via koreatimes.co.kr

Alibaba Group acquires 4% stake in SM Entertainment

http://www.dealstreetasia.com/stories/alibaba-group-acquires-4-stake-in-south-koreas-sm-entertainment-30679/Alibaba Group has acquired 870,000 newly issued shares at KRW40, 808 apiece of S.M. Entertainment, in a consideration valued at KRW35.5 billion ($29.8 million) for a 4 per cent stake. This acquisition follows the buyout of Chinese online video firm Youku Tudou in a $4.8 billion deal by Alibaba in November 2015.

SM Entertainment is listed on the KOSDAQ (Korean Securities Dealers Automated Quotations), a trading board of the South Korea-based Korea Exchange (KRX).

Founded in 1995, S.M. Entertainment is one of the largest record labels in South Korea’s South Korean pop culture industry, managing groups such as Exo, Girls’ Generations, Super Junior, F(x) and Shinee. Through management of these celebrities, S.M. Entertainment is also involved in the production and distribution of music records, movies and TV dramas. Via dealstreetasia.com

Hermes Korea bucks luxury downturn

Hermes+Birkin+Bag-1Hermes, the French high fashion brand, has proven an exception to the downturn in South Korea’s luxury market, industry officials said on Tuesday.

Compared to other luxury brands that had one to three per cent sales increases over the past three or four years, Hermes Korea has shown growth of 20 to 30 per cent, according to global consulting firm Bain & Company. The company’s sales rose 25.7 per cent in 2012, 31.1 per cent in 2013, 32.7 per cent in 2014, and then 27.9 per cent in 2015.

Department store officials say much of Hermes’ popularity comes from its handbags – in particular, its Birkin bag. Retail sources report 1000 people in South Korea are currently on the waiting list for one of the bags, but three to four years ago, unable to meet the impossibly high demand, the stores stopped taking reservations. Via insideretail.asia

Rise of k-commerce; Althea raises US$3.4M to bring Korean beauty to SEA

https://e27.co/rise-k-commerce-althea-raises-us3-4m-bring-korean-beauty-sea-20160527/Althea, an e-commerce platform delivering South Korean beauty products to Southeast Asian consumers announced today it has raised a US$3.5 million Series A from a series of investors.

Participating VCs were Asset Ventures, Posco Ventures, 500 Startups, Tekton Ventures, Cherubic Ventures and other undisclosed firms. Based in Kuala Lumpur and Seoul, the first platform launch was in Malaysia in July 2015. Afterwards, Althea expanded into the Philippines, Singapore and Indonesia.

With an aggressive expansion plan, Althea is hoping to launch in Thailand and Vietnam by the end of the year. Althea CEO Frank Kang told e27 they are looking into emerging markets like Myanmar and Laos as well the Greater China region of Taiwan and Hong Kong. Via .e27.co

Newly-opened BMW cafe in Korea

BMW-Korea-cafeA BMW cafe in Korea has opened inside a Lotte department store in Incheon.

Lotte Department Store’s Premium Outlet allows visitors to enjoy the BMW motorcycles and related accessories such as clothing and helmets. The cafe open today, May 27.

Free consultations about motorbikes and other products are also offered to customers. Via insideretail.asia

Lotte tests ‘Virtual Fitting Service’

https://insideretail.asia/2016/05/27/lotte-tests-virtual-fitting-service/Lotte Department Store is to implement a ‘Virtual Fitting Service’ for customers to try on clothes, without actually putting them on.

The service uses a special mirror that provides a virtual reflection of the customer wearing the clothing by applying a 3D image of the product to the customers’ body. It will also help customers to save both time and the nuisance of having to try on different clothes. The service is expected to launch in the latter half of 2016.

Lotte will also install 3D foot measuring devices in the third quarter, at shoe stores located in its flagship store, and Jamsil and Yeongdeungpo branches. The devices can measure a customer’s foot in just two seconds, and recommend products based on a client’s foot size and shape. Via insideretail.asia

‘Liquor samplers’ take hold in Korea

Liquor-samplers-KoreaLike choosing cosmetics after using a sample, a new trend is emerging of “liquor samplers” in Korea’s restaurants and bars.

According to the industry, Baesangmyun Brewery, a traditional Korean rice wine maker, offers four kinds of Slow City Brewery Makgeolli in the sampler course at its Slow City Brewery & Pub restaurants. Slow City Makgeolli, a hand-made Korean traditional rice wine, can have four different tastes by varying the level of aging or maturation.

For those who cannot choose what to drink for their makgeolli, the restaurant offers free samples of the four tastes and lets the customer choose their own. Via insideretail.asia

More country e-commerce profiles ahead

Our country e-commerce profiles are proving popular and we’ll have more country profiles ahead including major markets in the EU, SE Asia and South America. It’s easy to get these free news highlights each weekday morning in your email inbox by subscribing at the top of the page.

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