What Inspiration Do We Get From Smart Internet Shoppers To The East Gate Korean Retail Market?

Zheng Yilin, a 21 year old student, has already polished the strategy of her online shopping to the top of Jeong Yerim. First of all, she will find the goods that she wants to buy in Korea's largest "national" portals and search engine Naver. Naver will list the prices of retailers and their products for comparison (users can get cash points on Naver). If we are not afraid of taking risks, Zheng Yilin will also open South Korea's shopping App Zigzag to search for the collection and list of fashion business products from other platforms.

When ordering, Zheng Yilin will pay through Naver (registered users only need to enter a 6 digit password), and then will receive confirmation information on KakaoTalk. KakaoTalk is a popular Korean "super App", some of which are similar to WeChat.

This process may sound complicated, but Zheng Yilin is not the only Korean consumer who is proficient in online shopping. South Korea has the most sophisticated Internet users in the world: research shows that 99.6% of Korean teenagers are born into the digital age.

Although at present, many global technology and retail companies have devoted their desire to develop electricity providers in Southeast Asian economies such as Indonesia, but according to the 2019 eMarketer statistics, South Korea still ranks among the world's fastest growing e-commerce market top ten and the top five of e-commerce sales list.

Knowing these young people will not only help retailers around the world benefit from understanding this lucrative market, but also the insights of Korean online shopping groups are likely to help them innovate elsewhere.

　 "Online market" gatekeeper in crowded market

China has Alibaba, Japan has Le Tian (Rakuten), and South Korea has an electric business giant Coupang with a market value of 9 billion dollars. It is reported that the number of Coupang users is almost half that of the Korean population. But in the field of fashion and cosmetics, Alibaba's Tmall is the first choice for Chinese partners from international brands such as L Or al to Dior, while South Korea does not have a similar platform with Tmall. Aimee Kim, a partner at McKinsey&Company in Seoul, said: "compared to Korea, the cosmetics and clothing market is much more dispersed, and there are no outstanding winners." She pointed out that most international brands will sign agreements with chain stores or veteran retailers such as the new world (Shinsegae) to sell products in the physical store network, and the electricity providers are often included in the agreement plan.

In such a highly fragmented market, creating a unique and personalized shopping experience for consumers is very important for retailers. Take W Concept as an example, this is a portal for Korean and global active designers, and operates in Korea, China and the United States. In 2019, the international sales volume of the website reached US $172 million. The website uses AI technology to adjust product push messages according to consumers' preferences, and sends SMS and application alerts to target customers automatically according to its content.

W Concept has become the gatekeeper of Korean local brands who want to enter the western market, and vice versa: it guides the marketing work of social media, celebrities and celebrities as intermediaries. W Concept, chief marketing officer of Korea, Jin Xiaoshan (Kim Hyosun), said: "the biggest challenge is how to help these brands to be recognized by the public under the surrounded by famous brands."

The integration of e-commerce and social media platform enables retailers to integrate shopping with consumers' daily interactions. As a member of the consumer market, Zheng Yilin likes to give gifts with Kakao, which is also an e-commerce platform. Kakao has an open "wish list" function. She can send gift vouchers and beauty products to her friends.

At the same time, retail giants have also established cooperation with brands to enhance their awareness in the Korean market. For example, the new world has signed an agreement with the South Korean fashion accessories company, Rawrow, through its Shinsegae International, which has established a cooperative relationship with international brands such as Allbirds and L'OREAL to help them gain a foothold in the Chinese market. (International)

On the other hand, B2B start-ups Linkshop are building more than 8000 lines of "East Gate wholesalers" and retailers. Retailers pay membership fees and then browse and place orders for more than 1 million items on their platform. By standardizing prices, improving order efficiency, streamlining distribution and distribution, Linkshop has enabled Seoul's wholesale centre to digitalization.

Over the past ten years, Seoul's booming wholesale industry, especially Chinese consumers, is familiar with the "East Gate", which has created an independent network business ecosystem. Because the products sold by businesses are highly similar, businesses will show their differences from other retailers through creative guidance and an exclusive partnership with models familiar with social media.

Stylenanda is a famous example. Jin Suxi, the founder and #BoF500 of the brand, has also launched a successful sub brand, the beauty makeup brand, 3 Concept Eyes (3CE), Kim (So-hee). Zheng Yilin is also a fan of Frombeginning. This online store has more than 274 thousand followers in Instagram, and the contents of its account can drain consumers to the brand website. Online stores have also opened distribution services to the United States and China.

The content shared by Frombeginning on Instagram: Source: Instagram

However, Sue Nguyen, co-founder of Korea Science and technology news platform Seoulz, said that the Korean online fashion industry may have problems in its development speed and vitality. Nguyen said: "there are so many online stores that it's hard for you to keep a close watch on their status as consumers, and it's hard to find out what new hot products are." She pointed out that retailers can search for good products, brands or commodity categories according to their data.

　　 Redefining the relationship between content and e-commerce

Eunice Eo, 29, is a translator. She often patronize the cosmetics industry giant Olive Young (last year launched the international online business), especially the new world's e-commerce website SSG.com. "I simply can't imagine what life can't be bought online," she said. But like Zheng Yilin, Eo will compare prices with Naver to ensure that the cheapest goods can be bought. In recent years, industry leaders have suggested that Google, an international search engine giant, can learn from the Naver model in terms of shopping and parity functions.

Jin Xiaoshan said, "generally speaking, Korean consumers are proud of the price and the products with the highest cost performance, and even at the same time looking for needle in a haystack." Although mainly young consumers are more sensitive to price, this practice is also common among those with large disposable income. "This is not a forced economic situation, but a habit."

This phenomenon has given birth to a number of new companies such as StyleShare. StyleShare is a platform compatible with mobile terminals and computer terminals. It aims to provide consumers with information about fashion, modeling skills and shopping reviews. In order to maximize the role of content, Styleshare is also an e-commerce platform with 5 million 500 thousand registered users. In 2018, Styleshare acquired a majority stake in fashion and lifestyle stores 29cm, which has more than 2000 brands.

"These retailers do not simply tell you which sellers are finished, they give users feedback every day, sometimes the real time ranking of products and brands," says Nguyen of Seoulz. And almost all of them will become popular.

Another new company, Codibook, allows users to create their own clothing templates (similar to Ssense's and now closed Polyvore), provide users with matching advice, and also run their own online stores. As mentioned earlier, Zigzag app has accumulated more than 10 million downloads. The reason for this amazing data is that Zigzag will provide personalized push to its users in the way of weekly ranking. The platform also announced plans to expand its market coverage to cover other Asian countries.

Jun Jaeyoung, chief executive of Ominous, a fashion smart data company in Seoul, said: "for e-commerce companies, the high level of information connectivity between Korean consumers is also a special challenge. Consumers now have the ability to buy more cost-effective things, get information on goods such as manufacturing sites, and know what they can get from them.

Jun takes the example of Musinsa, a 19 year old casual clothing business Unicorn enterprise, and introduces how to provide a unique and better consumer experience. Musinsa uses data to further understand and predict demand for specific goods and categories, while reusing data production content (in reviews, ranking and trends) to help consumers determine their choice of products.

Jun said: "they are not only selling goods, but also providing consumers with the trend and the ranking of sales of all kinds of goods. Consumers want to get a better consumption experience, not only like the traditional commodity attributes such as price. "

In addition to editorial content, retailers who tend to publish trends, make comments based on data and recommend retailers can also position themselves as "authoritative" rather than providing "market" with a large number of choices. Satisfying users' demand for reliable information will eventually lead to a closer relationship between retailers and consumers. Although bad reviews may hurt consumers' desire to buy, it is also a valuable source of data for retailers to feedback to brand partners and achieve commodity monetization.

Everything should be easier and more convenient.

Seoul will become a "Wifi free city" - which is worth noting in itself. The Seoul government plans to fully cover the wireless network from stores to taxis and other public facilities before 2022. "In Korean culture, people want everything to happen instantly," Nguyen said. But aside from the free Wifi, Korean retailers have long been accustomed to providing advanced services, so that consumers can get less trouble. Jin Xiaoshan of W Concept will serve on the same day, the next morning, delivery, free return and seamless replacement service. It will be a local standard for fashion industry in Korea. Nguyen points out that consumers can simply put packaged goods back outside the gate and wait for goods to be sent and sent back without any difficulty.

Jade of Euromonitor, a market research firm In a report, Lee pointed out that there is great room for development in cross-border electric business in Korea. Since 2016, Alibaba has continuously expanded the scope of international express and customer services. Western high-end electronic retailers Yoox and Mytheresa have abandoned cooperation with third party operators, and have chosen to complete their own distribution.

For retailers entering the market, logistics may be a difficult task, but experienced local partners like the new world can delay the pressure during this transition period. Jun said: "in South Korea, the use of the distribution channels of large enterprises is considered an entry-level logistics solution. Because these enterprises already have a large number of distribution channels and strong capabilities. "

Although convenience is a key element in all E-commerce markets, the high expectations of Koreans for online shopping experience make convenience very important. Zheng Yilin said: "there is a" convenience blacklist "of fashion brands on the Internet. The companies on the list are slow to deliver and the customer service is very poor. She added that users will leave comments on the quality and delivery time.

In addition to the fashion industry, Nguyen points out that Koreans even expect businessmen to order meals in public places such as parks, and then someone will take away tableware and plates.

Convenience has become a way to subvert the traditional fashion industry. Seven years ago, Stripes, a start-up company, found a pain spot: office workers would search tailored clothing in online stores because they had no time to shop. Today, the company provides trial service based on data, so that users can obtain and place orders for new fabrics according to their sizes.

These and many other Korea Companies are pushing consumers' online shopping experience to the extreme. Companies outside Korea should keep a close watch on these forerunners. After all, the rising tide of South Korea is enough to affect the larger Asian neighbours.