Monday, December 26, 2011

Understanding E-commerce Asia : South Korea


Sometimes people say that Europe is fragmented. I know it is. But Asia is truly amazing. More then 2000 spoken languages, from extreme wealth to poverty, from democracies to authoritarian governments. That's fragmentation.


From a communication/marketing perspective, this is really interesting. Each market has it's own characteristics, demographics, infrastructure and social context. But above that, almost all markets will continue to grow rapidly. 


This combined makes it really interesting for me to learn and investigate about the online possibilities in the Asia-Pacific region and to learn about campaigns that are developed or changed to local legislation, habits, communication etc.

Ecommerce in South Korea

South Korea! A country that is really high on my "visit" list. Hopefully this summer.

But it is also the country that has the fastest internet connections in the world. Up to 200 times faster then connections in the USA, and that also cheaper. South Koreans pay around USD 38 monthly while US users pay around USD 48. In the near future South Korea get's even faster connections for cheaper prices.




There are more then 48 million people in South Korea of which more then 2 milliion are at the risk of internet addiction. But of course, there are special clinics for treating this internet addiction disorder.

Social Media

Over half of the country's population is registred at CyWorld. The most popular social network in Korea. CyWorld has expanded to other countries, like Japan, China, Taiwan and the USA, but already had to close many of these sites again, due to competition from Facebook and in that time Myspace.
Also in South Korea it's self Cyworld faces difficulties nowadays.This summer, the personal details from about 35 million South Koreans was stolen/hacked from Cyworld.
Cyworld is losing ground to Facebook and Twitter and are now announcing a "come back" with a redesigned service aimed more at people and users in stead of sharing information. The Korea Times has an updated article about this.

Social media in south korea often have virtual currency's, making it less dependent at advertisement then their western counterparts.

To get a feeling with CyWorld, take a look at this youtube movie:




At the same time North Korea is using social media for propaganda matters and the South Korean government responded with censorship.

North Korea is using social media for propaganda

















South Korea currently has 5 355 880 Facebook users and this is 13.58 per cent of the total online population. Statistics can be found in more detail here.




Search engine marketing in South Korea

"In South Korea people want search engines to find something for them"

A big mistake and often made is to enter the South Korean search market with the same approach as in the west. Things that are important for SEO in the west, like unique content, backlinks etc. are not as relevant for search engines "Naver" or "Daum" that are the most popular search engines in South Korea. So forget Google if you want to start advertising in South Korea, but investigate the possibilities at Naver or Daum.

Naver and Daum, are more "portal 3.0." websites. Portal's like we in the west had 10 years ago, but then much more advanced. Daum for example (on mobile handhelds) scans barcodes, offers music, blog's, etc.

Both search engines have a different strategy then their western counterparts.. Their key objective is to push users to other parts of their network or towards paying clientele. Naver's ad revenue for example is connected to the time people stay on Naver's portal. That's one of the reasons they want to keep people as long as possible at it's portal. If used properly , I think this can be a great branding tool for companies of course.

What is also a big difference is that Naver is created for South Koreans and questions can be answered collectively.

A detailed introduction to both search engines can be found here in this interesting article at search engine watch.

Naver has the aspiration to deliver search results for users, without them typing, but by realizing the intention of the user. Interesting!

Learn more about Naver and their ad placements here. Really interesting. Covered in the article but summarized also below are the main forms of advertisement.

1) Click Choice Advertisements. Just like our pay per click ad's
2) Time Choice Advertisements. You pay a flat fee payment which will guarantee exposure for a certain time without changing rank.
3) Brand Search Advertisements. With this form you can get a microsite within the ad block itself and you can interact with certain keywords and search terms used. Ideally for awareness and introducing brands!

The top search engine list in South Korea can be found here and is provided by KoreanClick. Youtube is also, just like many other places in the world, really big in South Korea. A good thing to remember when doing business in south korea. Runner up is DaumTV.

According to this person you can set up an account at Naver, even if you don't read Korean.




Ecommerce in South Korea


South Korea is the third largest e-commerce market in the Asia-Pacific region. Only Japan and China have a larger e-commerce market share.
With such a high internet penetration, the south korean ecommerce market is very mature and ahead of the west. A detailed (paid) report can be found here. In the first quarter of 2011, south korea's e-commerce sales jumped 20.9%/ At this moment the South Korean economy is slowing down, due to the European and North Korean situation. However a growth of 3,7 % in 2012 is still expected.
In the second quarter of 2011, Credit Card was the most used payment method in more then 70% of the B2C cases. But according to digital river payments, local cards often are prefered due to loyalty programmes. Keep in mind that virtual currency's also are used a lot in South Korea.

Tesco, did a great job, I really like this, by adapting campaigns to the local situation.





Mr Pizza, a Korean Pizza chain, has set up a real succesfull viral campaign at youtube. More details about the campaign can be found here.



I think South Korea, is a really interesting country, much more to tell and to write and I am sure much more nice case study's can be found at the web.

Very popular in South Korea is Kakao Talk in South Korea, a chat application for smartphones. More then 1 billion text messages, are being sent every day through Kakao Talk. It is more then just chatting read more here.Kakao Talk is expanding to other countries in Asia.


Want to know more about South Korea? This great interactive platform shows you all about South Korea!

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