Olivier Mouroux is the Co-Founder of Asiance, a Digital Marketing Agency based in Seoul, South Korea. Olivier is going to talk to us about the specifics of the Internet industry in Korea and what they mean for eCommerce.
Hi Olivier: How did you happen to live and start a company in South Korea?
In 1999, I was living in Beijing, China and co-founded a B2B tourism portal Travelinchina.com: then, I was Marketing & Technical Director. Two years later, I moved on to Seoul to become IT Attaché at the French Embassy and never left back: I have been here for more than ten years.
You are now CEO at Asiance, a successful Digital Marketing agency that you co-founded: how did this work?
In 2004, Alexandre Lebrun (Founder and Director of the Board of Virtuoz), Bosun Kim and I partnered to found Asiance, because we wanted to see whether it was possible or not to build a company from scratch in Seoul, one of the most competitive market in the world at that time.
We had – and still have – the same entrepreneurial vision, which is crucial on a daily basis to lead the agency. Asiance, standing for Asia + Alliance, is a 100% bootstrapped company which originally aimed at helping occidental firms to settle in Asia within the Digital world. We now have been working with more than 200 clients and we deal with about twenty active projects every month.
What is Asiance’s core business?
We are a pure 360 Digital Marketing agency: we are a one-stop service for our customers who want to lead marketing campaigns online and get a better understanding on the local Digital ecosystem.
From strategy formulation to campaign implementation to media purchase, we do everything for our clients, respecting international quality standards while adapting to the local environment, as almost everything is different: regulations, major actors and obviously, fonts!
About the major actors of the Internet industry, who are they in South Korea?
This is a very important point: forget everything you know about the Internet industry in Europe or North America.
Google exists but it has a limited market share: in Korea, the two search engine giants are Naver (70% of market share with 8 billions impressions monthly) and Daum. The most popular social network is not Facebook but Cyworld, which was created 4 years before. Twitter focuses on a particular target – 25+ professionals – and the main microblogging platform is actually me2day. Youtube is available, with restricted features because of a Korean law enforcing websites with more than 100,000 daily visitors to require users’ real names and ID card numbers before uploading content. The largest video platforms are Pandora and GomTV.
This is crucial if you want to communicate online in South Korea, whether you are a non-for-profit, an institution or a brand and it is even more essential if you want to sell through an eCommerce website.
What about eCommerce in South Koea: how is the market?
eCommece settled down very early in South Korea, due to several factors :
- Population got training from the government since the end of the 90’s so the old generation get a complete understanding of commerce websites.
- Seoul is a big city of 25 M people with very low price on logisitic, so easy acces to many people, very short distance, and cheap delivery.
- There is not much fraud on payment system: people are confident and get many different ways of paying online
In terms of figures, the e-commerce transaction value amounted to 220,908 billion won in the first quarter 2011. This figure rose by 20.9% from the first quarter 2010, but fell by 4.3% from the fourth quarter 2010.
According to KoreanClick, in June 2011, the main open-market websites were Gmarket (15,900 millions pure visitors) and Auction (15,676 millions pure visitors) while the leading group buying services are Groupon (7,789 millions pure visitors) and Coupan (5,928 millions visitors).
This market hierarchy may evolve soon due to the recent entry of two major actors in the market: Naver, with price comparison information and crowed sourced shopping knowledge services and KT – the second largest telecommunication company in South Korea – with it TV & App open market. Wait and see.
Which challenges must you face to settle in South Korea?
There are three important points here.
First, you need to set up a specific Korean payment gateway system to enhance the experience for the users who are used to using it.
Second, because South Korea has one of the fastest Internet network in the world, people are used to see pages displayed instantly on whatever screen they used: your website must be ultra-fast, otherwise you have no chance to succeed.
Last but not least, as explained above, you need to take into consideration the whole Internet ecosystem, with all the local actors.
More surprising – still in terms of Internet environment – you have to understand that SEO does not exist: if you do not pay for SEM, you do not appear in search engines. Your website can only appear on Naver and Daum in three cases: either people type your exact URL, or you pay for keywords or you have a Café, which is a kind of blog/forum/group hosted on one of the two portals. If you are a luxury brand, you will never come up naturally when someone is searching for “leather bags” for instance. This is very challenging for foreign brands.
Can you tell us about a company who successfully made it to South Korea?
Sure. Lacoste is a great example of a French brand that successfully broke into the South Korean market.
Lacoste works under very strict design constraints – for worldwide consistency purposes – and we had to include some of the local elements into a framework tailored to occidental markets.
For instance, we had to build a website and an online shop in Korean, which is completely different in terms of font from traditional alphabetical languages as French and English. We also created a contest for the launch of Lacoste L!VE and had to promote them on the corporate website, which was originally designed to display links to Facebook pages.
As Lacoste knew how to conciliate their original and worldwide brand DNA with local requirements, they have been able to gain in notoriety in South Korea and are actually doing pretty well now. The Lacoste L!VE launch campaign was a great success.
Finally, can you say a word about mobile phones and tablets in South Korea?
Well, “historically”, the market has been through a complex evolution, as national companies such as Samsung, LG and Hyundai were protecting their monopole against foreign brands like Motorola, which never managed settling in South Korea.
However, in December 2009, the iPhone arrived and since then, it has been a huge commercial success, with more sales every day. The iPad had been prohibited and is now allowed and similarly to the iPhone, is a huge success.
While South Korea is not as mobile as Japan for instance – where mobile is everything and even surpasses home Internet usage – it is still an advanced market in terms of mobile technologies. Just walk in the streets or take the subway and you will see almost everyone with a smartphone, from young children to elderly people.
The infrastructures play an important role in this phenomenon, as you can access free WiFi almost everywhere in the largest cities, even in cabs up to 60 km/h! Mobile payments are not the norm in South Korea since local people are used to using RFID for many things – like subway tickets – but you can easily turn your smartphone into a virtual bank agency and access all your payment methods in seconds.
Video games is another core aspect of the South Korean that supports the development of mobiles and tablets: gaming is basically in the DNA of Koreans and they embrace the opportunity to be able to play anywhere, at any given time. By the way, gamification is a leading trend in South Korea and a great business opportunity, watch it.
Thank you very much Olivier for this amazing overview of the Internet industry in South Korea. Best of luck to you and Asiance.
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