ONLINE MALLS DRAWING IN THE BIG CROWDS
ONLINE MALLS DRAWING IN THE BIG CROWDS
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  • 승인 2007.11.05 13:25
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Scantily-clad girls shout down passer-bys in Seoul's Dongdaemun, one of the biggest shopping districts in the whole country. Teenagers sit outside malls and smoke cigarettes to a backdrop of break dancing B-Boys and deafening music blaring from all angles. It's a hectic way to go about picking up the latest fashion, and an increasing number of Koreans are turning their backs on it.

Instead, many are logging onto Internet websites that are selling everything from earrings to MP3 players. The latter part of this decade belongs to online shopping malls, with the annual turnover for Korean companies selling their wares on the net exceeding the 15 trillion won (US$16.33 billion) mark, and rising fast.

Online malls attract a huge amount of trade, especially from young urbanites, with GMarket (www.gmarket.co.kr), one of the biggest Internet retailers in the country, estimating that they have over 10 million users, almost one fifth of the population of Korea.

Hansol CS Club (www.csclub.com), who offer a variety of online goods from groceries to clothes and accessories, estimate that they are growing quickly -- they have on average 4,000 new registered users per day. The site has diversified quickly, offering services as well as products. A travel ticket and hotel reservation service has been added as the company tries to blow the offline competition out of the water.

Low overheads mean that companies can operate with a skeleton staff and the relatively small size of the Korean peninsula means that goods can be delivered quickly, boosting customer satisfaction. Indeed, Shinsegae, one of the biggest department store chains in the country predict that by 2009, online malls' sales will be higher than those of department stores.

Daum DN Shop (www.dnshop.com), another of the online malls attracting trade in Korea, say that Internet stores have a massive advantage over their high-street competition. A spokeswoman said: "We don't have opening hours -- we are always open. Customers don't have to get in their cars or take buses to get to our stores; they just have to switch on their computers. Time and location are not issues in the online world."

Experts say that Korea was quick out of the blocks when Internet shopping started to show promise, giving sites here a head start on their foreign counterparts.

Interpark is one of the country's topearning online malls. They agree that Korea was helped by an early start.

A spokeswoman for Interpark said: "From an early stage in online shopping malls' development, some of the biggest multinationals in the country started to get involved, introducing high-quality marketing and sales services. That is while shopping malls in other countries have had to grow much more slowly, without this kind of a boost."

Many online malls believe that in order to build on already impressive sales figures in this country, online shopping sites need to develop new sales strategies. Interpark believes customers need more information to be provided on the malls' sites. A spokeswoman said: "We have to make customers trust online shopping sites more by giving detailed information about the properties of the products we are selling, and where our goods are coming from."

Interpark also said online customers need a better safety net to instil trust in the Internet shopping malls. The company's spokeswoman said: "We also need to develop a new, more sophisticated guarantee service, to ensure safe sales for Korean customers using the Internet."

Industry figures show that women in the age 20-35 bracket, traditionally the focus of most of the big high-street and department stores, are by far and away the biggest registered users of online malls in Korea.

Kim Dong-ju is marketing manager at Esquire, a popular Korean clothing label. He believes that after the IMF crisis in 1998, the gap between the rich and the poor in Korea widened, sparking off a different consumption pattern between the two groups, with lowerincome groups focusing on low price, rather than high-quality in goods.

And Kim believes that online shopping is something that appeals naturally to the Korean character. He says: "Koreans love the bbali bbali approach to social life. Everything has to be done at super-high speed in Korea, and Internet shopping facilitates that perfectly. You can see something on your screen in the morning, order it with a few clicks of a mouse, and it can be on your doorstep by lunchtime."

As Korean culture continues to diversify in the 21st Century, the Internet is meeting new needs. Esquire's Kim thinks a new mean streak is developing in this country. He says: "There is fierce competition arising in Korean culture, especially when it comes to fashion. We are becoming obsessed with getting better products than our friends have, and for a cheaper price. Price comparison websites and online shopping malls fit that approach, too."

Oh Ji-won runs a SuhYang Trading, a clothing business that deals with Korean and American clients. She believes that online shopping is especially attractive for Asian people. She says: "Online shopping saves a lot of time. Many Koreans, who tend to be shyer than Western people, like the fact that this way of shopping is impersonal -- they don't have to deal with sales people."

Esquire's Kim Dong-ju points out other cultural reasons for Korea's new-found love for online shopping -- the desire to fit in with the crowd. "Koreans love to copy fashion trends they see elsewhere -- in fact we excel at mimicking others' style. If Lee Hyo-ri or a well-known actress turns up to a movie premiere in a gold miniskirt, you can bet that half of Korea will be wearing the same miniskirt in less than a week. The Internet is a key factor in all this," he says.

And Oh Ji-Won, of SuhYang Trading, believes that there is something embedded in the Korean character that draws customers to the online malls. "Koreans have an Internet-orientated lifestyle. Everything is done through Hanmail, Naver, Daum and the rest. People in this country feel a certain closeness to the Internet, and going online to look for lower prices has become a national pastime," she says.

Many believe that the march of the online malls is now unstoppable, with Internet-based shopping centers looking to diversify in the future. Experts say that Internet shopping sites here will continue to diversify as they look to expand and take on the big boys of the retail world.

Oh Ji-won believes that new online trade strategies will develop as Koreans look to use the Internet to find ways of spending their disposable income. "Malls are quickly cottoning onto the economic basics -- they are starting to specialize in either selling high price goods at a high price or cheap goods at lower prices, making them extremely competitive with a whole range of highstreet shops," she says.

An increasing number of Korean retailers are refusing to stand still, realizing that the new media market is the way forward. Shinsegae Department Store has recently announced the launch of a new service called i-Fashion, where users can create an avatar of themselves with their exact measurements, meaning that they can try on clothes online before buying.

This new technology wears down the argument that offline stores usually produce when they are asked about the advantages of Internet shopping -- namely that customers want to try clothes on before they buy them. The i-Fashion technology was developed for Shinsegae by Konkuk University's technology department, who claim: "This technology has created a whole different playing field for fashion retailers."

Daum DN Shop insists that they and other Korean online malls will continue to diversify the kind of things they are selling. A Daum DN spokeswoman said: "We are continually looking to expand the range of products we have on the site. By adding things like second- hand cars and so on, online malls can ensure their continuing growth."

The future seems to look very bright for the malls. Oh Ji-won of SuhYang Trading agrees. She says: "The number of Internet shopping malls will go continue to go up, and so, too, will the amount of different goods and services they carry."

Koreans, the Internet and shopping -- it is as a natural menage a trois as there can be. And as much as the high-street stores try to fight back the relentless tide of the online shopping centers, the momentum is behind those companies that are investing in Internet-based solutions. So take a good look at the shopping malls like those you will find in Dongdaemun -- they might not be there for much longer.


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