Social commerce Coupang is entering open market.
According to industry, Forward Ventures, which is operated by Coupang, finished registration of electronic financial business with Financial Supervisory Service for open market service. If it meets requirements that Financial Supervisory Service presents, then it will complete its registration within a month.
From now on, Coupang is able to issue electronic advanced payment method and management, electronic payment settlement large business (payment gateway), and escrow. Coupang was able to break down boundaries in online distribution channels, which were divided into open market and social commerce, for the first time. It increased its area of business from social commerce to open market.
“We are going to add market place service that allows a normal seller to personally register his or her products. We are going to provide more variety of products to customers and were able to lower threshold for small businesses to enter Coupang.” said Director Kim Soo Hyun of Coupang Headquarters.
Coupang made an alliance with Esellers that provides large service for product registration.
Social commerce such as Coupang, Ticket Monster, and Wemakeprice are registered as communication seller by law. Because they have to take final responsibilities of sales, MD selects products and provides curation service that suggests to customers. There are about 20,000 to 30,000 goods that are remaining due to this.
On the other hand, a business can act as a platform instead of becoming a seller itself in open market, which is a telemarketing broker. It connects sellers and consumers, and more goods can be sold than current. Open market also can lower prices of products due to competition between sellers. Open markets such as G-market, 11st, and others are selling more than 400,000 kinds of products.
Coupang was able to lure Soft Bank, where Son Jung Ih is a chairman, to invest $927 million (1.1 trillion KRW) into Coupang in last June. It aggressively partook in investments by emphasizing its super-fast delivery system.
“Coupang’s entry into open market draws many eyes and predicts generation of infinite competitions”
Open market, which advocates ‘Online Market’, has been continuously strengthened its product recommendation service. This indicates that open market has entered into social area.
Social commerce Coupang’s entry into open market is a huge event that eliminates boundaries between e-commerce businesses. Online businesses such as current open markets and others have to compete against Coupang’s service that boasts about its super-fast delivery system. As e-commerce transaction goes from PCs to mobiles, boundaries between open markets and social commerce had been lowered, and this is why Coupang went after this advantage. Moreover Coupang’s awareness is also high, and this is the first time when a business like Coupang was able to hold 2 business positions so quickly.
“We still need to see what kind of effects will Coupang’s activities have on current open markets. Systematized risk management system is a must in open markets as there can be many problems in variety of areas such as sales of fake products, customers’ complaints, and others due to high number of products.” said a person associated with 11st.
“Many e-commerce transactions are happening through mobile messengers, applications, and others as open markets are just regulated by laws. Division of markets does not really have much meaning to customers. E-commerce transactions can be different depending on regulations by either Red Ocean or Blue Ocean. If it is Blue Ocean, then market can grow as Coupang enters market. However there are concerns about pies being reduced if it is Red Ocean” said a person associated with EBay Korea
Social Commerce Ticket Monster and Wemakeprice are rapidly shifting their focus on Coupang’s drift.
“Strength of open market is its ability to sell more products and add more competitive edge on prices than social commerce. However it needs to overcome customers’ complaints about how it is complicated due to large number of products.” said a person associated with Ticket Monster. A person associated with Wemakeprice also said that each business is gathering many businesses’ strengths as practically there is not a division between open markets and social commerce.
Coupang’s entry into open market worries many current businesses due to Coupang’s high awareness and customer-oriented super-fast delivery system, which is its biggest strength. Loyalty of ‘Coupang Man’ is relatively higher than other parcel services, and this is why it is able to provide high-quality service to customers.
It seems that Coupang’s high awareness will greatly help its marketing. It is possible that it can operate its business at a same level as current businesses, and this serves as a main reason why it is able to quickly enter markets.
Staff Reporter Song, Hyeyoung | hybrid@etnews.com