Thursday, July 18, 2019
Korean IT Services Industry Likely to Grow 2.7%
Seeking New Businesses
Korean IT Services Industry Likely to Grow 2.7%
  • By Cho Jin-young
  • January 8, 2015, 02:35
Share articles

 

The Korean IT services market is projected to grow 2.7 percent to reach 20.65 trillion won (US$18.8 billion) this year. There continuing trend of conservative investing in the IT sector, and certain market segments such as security and public and social overhead are expected to lead the market. In particular, the industry is likely to focus on cultivating new businesses and strengthening services that combine IT with non-IT areas.

“Fast-growing companies like Samsung SDS and SK C&C are actively engaged in M&A deals and are seeking to enter non-IT service areas,” said Kim Dong-yang, an analyst at NH Investment & Securities. The analyst added, “IT service providers are expected to look for new businesses in non-IT services fields based on their strengths in reducing costs, boosting efficiency, and strengthening online business.” These remarks were made at a seminar on market outlook and technology for IT services in 2015 hosted by the Korea IT Service Industry Association on Jan. 7.

In the manufacturing and IT service sectors, the big data market is forecast to show up this year. Kwon Suh-young, consultant in charge of LG CNS, pointed out that manufacturing companies have a desire to improve product quality, research and development, facility environment, security, promotion and marketing, and management. The consultant said, “Among areas that use big data, real-time and predictive analytics fields satisfy customer expectations a lot,” adding, “As a result, this year is expected to be a turning point for big data to become a reality, beyond just a conversation topic.”

When it comes to the financial IT area, the market's center of gravity is expected to shift away from the sophistication of business transactions towards customers. Park Il-doo, manager at SK C&C, predicted that the financial technology (fintech) sector will emerge, starting with the appearance of mobile channels, payments, and money transfer services.

As for the logistics, retail, and IT service sectors, the market is likely to expand to service areas using the third platforms. Park Jung-ah, senior researcher of Lotte Data Communication Company, selected an increase in single-person households, less meaningful national boundaries, a change in a purchasing pattern toward the fish model, the breakdown of barriers among retail channels, and the realization of omni-channel and cross logistics as key words for the retail and logistics industries. Accordingly, five predictions were made on the trend of IT services in the retail and logistics areas. They were the expansion of the logistics industry to service-oriented ones using the third platform, countering the growth of the online payment market with IT solutions, the continuing growth of the Internet of Things sector, locking in marketing strategies by delivering the value of customer experiences, and universal channels through integrated logistics platforms based on a cloud environment.