Korea's mobile shopping market has surged twice compared to the same period of last year while online shopping has seen a constant decline.
According to the latest data by the Korea Institute for Industrial Economics & Trade, the online shopping market size combining both mobile and computers came to 45.1 trillion won last year, 13.7 percent up from 39.6 trillion won in the previous year.
In detail, the mobile shopping size surged to 13.1 trillion won, a 122.3 percent increase from 5.9 trillion won in the previous year while online shopping market size dropped 5.4 percent to 31.9 trillion won from 33 trillion won during the same period.
The reason behind the rapid growth is that mobile devices can now bring more users into the shopping venues without limit of time or space. The rise is also due to the companies’ adoption of services exclusive for mobile phones and convenient payment service for smartphone users.
With the mobile market growing, online shopping malls are strengthening their services to attract more mobile consumers recently.
South Korea's two largest shopping malls G-Market and eBay Korea said the portion of mobile shopping came to 42 percent of the total shopping in July. This is a 2.5 times increase from 16 percent in the second half of 2013. Their mobile sales have surged 87 percent last month on-year. Another open market store 11st said its mobile portion hit 40 percent last December.
GMarket was the first company among online shopping malls to roll out mobile shopping app in 2009. It has been ramping up efforts to catch up with mobile trends by applying new system such as mobile light technology which makes conventional online files 10 to 20 percent lighter to be suitable for the mobile environment.
With the smaller image of products, users are able to see the product images two times faster on mobile phones and browse more photos.
In effect, the portion of mobile transaction for clothing stood at 76 percent in the first quarter of this year. This means that eight out of 10 clothing buyers purchased the products on smartphones.
It also adopted "SmilePay" in April to improve the convenience of mobile users. This allows users to register their card information first time and then pay products through the authentication number delivered via text messages next time.
GMartket said consumers are likely to buy products which they repeatedly buy or relatively inexpensive products on smartphones.
Experts say that mobile shopping has more impulse buying and more low priced products are sold compared to sales on computers. So, the services applied to computers should all be removed and shopping malls should start from the scratch.
Ahn Tae-hee, a partner at a consulting firm A.T. Kearney, said, "Mobile can be an opportunity for new business such as payment service and delivery app apart from e-commerce. Companies need advanced strategies for customized services."
With the business boundary between open market and social commerce declining, the market will see a paradigm shift from the entry of SNS platform and foreign retail giants, he added.
One looming concern is security. Industry watchers said if the security on personal information and payment information are shaken, the credibility of clients can be lost.
"The reason behind that only inexpensive goods are sold on mobile shopping on mobile platform is due to security concerns. If customers view that personal information is safely handled, more clients will be attracted with bigger amount," said Lee Jung-hee, a professor of Chung-Ang Univeristy.
