Buying into mobile shopping

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Buying into mobile shopping

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With smart phones, tablet PCs and the advent of the mobile wallet as new means of payment, mobile shopping is seeing explosive growth in popularity with a market expected to reach 4 trillion won ($3.5 billion) by the end of the year.

From a 10 billion won market in 2009, mobile shopping multiplied thirtyfold to 300 billion won the next year and 1.7 trillion won in 2011.

Large discount chains and department stores that have been stagnant or posting negative growth due to the recent downturn in consumption are turning their attention to mobile shopping as a new distribution channel.

Accordingly, in a market that has been led by venture companies like Ticket Monster and Coupang, online shopping malls G Market and 11st and large discount store chains E-Mart and Lotte Mart are seeking a piece of the action.

And in the mobile shopping industry, Mobile Moms are the No. 1 target of marketers.

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“In the consumer mobile shopping market, 14 of the top 15 sellers are for female consumers, especially products related to child care, beauty and fashion,” says Kim Joon-soo, who works for the marketing team at Ticket Monster.

Child-care supplies like diapers, powdered milk and baby food are in the top rank of sales at every mobile shopping mall company. In addition, women’s clothing, skin care and makeup products as well as baby products are top-10 sellers.

Mobile Moms prefer mobile shopping because it is convenient. Their schedules are filled with work and taking care of children, and they don’t have the time to sit down at the computer or go to large discount stores. Mobile shopping can be done anytime and virtually anywhere, with just one hand.

“Mobile shopping is not restrained by time or place, so mothers who carry the burden of parenting seem to prefer it,” says Park Sang-hoo, PR manager of the 11st.

According to Online Shopping Association, three times as many women as men use mobile shopping through smart phones and tablet PCs.

A unique feature of mobile shopping is that purchases tend to be spread out rather than peaking at certain times.

Internet shopping using computers is slow during rush hours and relatively high from 10 a.m. to noon and 2 p.m. to 4 p.m. TV Home Shopping sales are concentrated from 10 a.m. to noon and 8 p.m. to midnight.

“There are definitely prime times for Internet shopping malls and TV Home shopping companies; it’s different for mobile shopping malls,” says Hong Seok-woo, who works for CJ O Shopping.

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In order to attract Mobile Moms, competition among shopping companies is fierce, with social commerce companies and online open market companies that entered the market first taking the lead.

“Mobile Moms tend to be the frugal housewives who won’t waste even 1,000 won. They also tend to be most sensitive to discount promotions,” says a spokesperson for a social commerce company.

This is why social commerce companies like Ticket Monster often hold baby product discount promotions, such as Monster Baby Fair.

The online open market company 11st introduced Town 11st services, where it sells coupons for family restaurants, beverages and bakeries. When customers are around Yeoido, southwestern Seoul, it introduces coupons of restaurants and coffee shops in the area.

CJ O Shopping has the “That is this” shop, where it offers products only sold at offline stores to target housewives who eye-shop products then purchase them for less on mobile shopping malls.

Large discount store chains, the latecomers of the mobile shopping market, are chasing the social commerce and online shopping mall companies with massive price discounts and after-sale service.

E-Mart, the nation’s largest discount chain, which introduced its mobile shopping application early this year, provides 10 percent discount coupons to mobile app users.

Lotte Mart has increased accessibility of its online shopping malls by launching a mobile shopping app.

Meanwhile, most retailers and industry observers have a positive outlook for the future of the mobile shopping business.

“Mobile shopping will grow further as it can provide customized services to people,” says Kim Sang-hyun, professor at Yeungnam University.

If retailers analyze information about each customer’s preferred products, they can provide personalized services that are not available at offline stores.

However, some also point out the improvements that need to be made.

“The mobile shopping industry also should build trust by strengthening follow-up services such as returning goods or giving refunds. In that way, the number of customers who purchase expensive goods will increase and the market will be able to grow further,” says Min Kyung-bae, professor at Kyunghee Cyber University.

BY CHANG JUNG-HOON [kjy@joongang.co.kr]

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