From Online to Mobile and AI Shopping
The Korean e-commerce market is transforming into a battleground for global ICT companies as the market's focus is moving from online shopping to mobile and AI shopping.
Global ICT giants such as Google, Amazon, and Instagram are making a foray into the Korean ecommerce market. Korean companies including SK, Lotte, Naver and Kakao are also expanding their e-commerce business based on their on AI voice shopping technology.
According to the e-commerce industry and Statistics Korea on September 4, mobile shopping accounted for 62.1% of online shopping transactions (8.725 trillion won or US$7.85 billion) in June. This shows that a mobile-based digital economy is moving the center of internet shopping from PCs to mobile apps.
Global ICT companies are seeking to change the paradigm of the e-commerce market with their AI speakers. Google launched a shopping lens called the "Google Lens" last year and is upgrading its features. The Google AI speaker "Google Home" will land in Korea on September 11 and the Google Shopping Service is in the works for Korean customers.
Amazon, which developed the first commercial AI speaker "Echo," has already loaded the Echo with a function similar to that of the Google Lens. Industry watchers say that Amazon will preinstall its AI application in a new LG smartphone that will hit the market soon to preempt the AI speaker-based shopping market.
Instagram also introduced a shopping function to buy goods with tags only in Korea in June.
Naver and Kakao, which are investing heavily in AI, are upgrading visual technologies that take users to shopping websites when searching for images.
Traditional e-commerce companies are also investing in technology but their pace of change is relatively slow. eBay Korea, the number one company in the Korean e-commerce industry, recruited 100 AI developers last year to develop "Smile Pay" and other services. 11th Street appointed SK Telecom AI service head Lee Sang-ho, who is a voice search expert, as new president. Lee is expected to generate more synergies between the SK Telecom's AI speaker "Nugu" and 11th Street
"Amazon, which has big data on consumers’ shopping, threatens Google in digital advertising as well as e-commerce," said an official of the internet shopping industry. "Belated investment in technology can drive even leading companies out of business.”