South Korean online merchants bounce between platforms in search of coupons and promotions

Naver's e-commerce platform [SCREEN CAPTURE]

Don’t put all your eggs in one basket, or if you’re a Korean business owner, don’t sell all your eggs on only one online marketplace.
More and more sellers are turning to “multi-homing” – switching between competing platforms to sell their goods – to not only sell more products by customizing their products to suit each platform's consumer demographic, but also take advantage of promotional offers offered by the platforms as they compete for a share of South Korea's e-commerce market.
Jeong Jeong-cheon, CEO of online grocery store Koreanssan, has run the company for 10 years and sells its products on more than 10 e-commerce platforms, including Naver, Coupang and AliExpress.
AliExpress, where Jung recently opened a store, offered a plethora of coupons to reduce or waive platform fees, and Korean Sun recently recorded its highest single-day sales of roast eggs through Naver's “Daily Special Offer” promotion.
“As the number of e-commerce platforms increases, it becomes important to leverage each platform's services and features according to our competitive advantages,” Chong said.

Chinese e-commerce platform AliExpress has launched a separate channel called K-venue exclusively for Korean products, waiving the usual entrance and sales fees for sellers. [SCREEN CAPTURE]

What happened?
Currently, domestic and foreign online platforms are competing fiercely for market share in the Korean e-commerce market, and for these platforms, securing quality sellers has become just as important as attracting customers.
Chinese companies such as AliExpress and Temu took an early lead with the sheer volume and variety of products they sold. AliExpress launched K-venue, a channel dedicated to Korean products, in October, waiving the usual entry and sales fees for sellers. This allowed a wide range of brands, from major brands to small and medium-sized businesses, to sell their products on the platform.
Meanwhile, Naver launched a same-day delivery service for customers in April, and then in late May began offering refunds to sellers for shipping fees for returned items.

Naver's same-day delivery service was launched in April. [SCREEN CAPTURE]

GMarket has also significantly expanded its support for merchants. For example, it will provide businesses with advertising and storage support during “Big Smile Day,” the online platform's largest discount event. Retail giant Shinsegae, which owns GMarket and SSG.com, and CJ Group, which owns CJ Logistics, partnered last year in retail, logistics and product development, including launching exclusive food products on the platform. 11Street is currently running a program for domestic businesses only, waiving platform usage fees until sales reach 10 million won ($7,250).
Online vendors who primarily use e-commerce marketplaces to sell their products are benefiting from the competition while the platforms fight for market share, almost to the point of bleeding each other.
“Having a large number of high-quality merchants is the biggest competitive advantage for commerce platforms serving consumers,” said a domestic e-commerce industry insider. “Currently, with so many platforms and aggressive marketing by Chinese commerce companies, companies are competing to provide better support to merchants in terms of discounts, advertising, product returns and sales commissions.”
“We have noticed a big difference in the support provided by platforms before and after Chinese businesses entered the Korean market,” said a salesperson at an online SME.

Domestic e-commerce platform 11Street's “Original Seller” program exempts sellers from paying platform fees [SCREEN CAPTURE]

Vendors are mixed
Online businesses are free to experiment with different platforms to make their products stand out, varying their product mix, extra perks, and delivery options across platforms to suit the demographic and spending patterns of their market.
For example, CEO Park Seong-young said, Hanger Korean traditional sweets shop Baodam sells a variety of products at Coupang, Naver and Hanwha Galleria. At Coupang, Baodam mainly sells in bulk at a lower price per piece, while at Naver, they sell individually wrapped products to encourage multiple purchases. Luxury gift sets are sold at the more upscale Hanwha Galleria.
“Each platform has a different customer base, so we try to tailor our products to suit their tastes,” Park said.
In fact, Baodam initially sold Korean snack gift sets on Naver's livestreaming shopping platform, but customers urged him to “sell individual products” because they “didn't need gift sets.” Park began producing individually packaged products, such as: Doraji Jeonggwa (Candied bellflower root) will be sold in bulk exclusively at Naver.
“We are trying to increase brand exposure by casting our fishing net as widely as possible,” Park said.
What next?
With more platform options available, sellers are expected to have stronger negotiating power when dealing with e-commerce merchants. According to industry research firm Wiseapp Retail Goods, the top four apps with the most domestic users last month were Coupang, AliExpress, 11Street, and Temu. The rapid growth of Chinese e-commerce merchants has slowed somewhat following the revelation of safety issues with various products sold on the platforms, resulting in a second consecutive month of decline in monthly active users.
“For the time being, sellers will not be tied to a specific platform, and platforms will continue to launch new promotional measures to encourage sellers to join,” said a source in the domestic e-commerce industry. “But it's unclear how long this fierce competition will continue.”

Hong Sang-ji [kim.juyeon2@joongang.co.kr]