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Domestic ICT Companies Eye Online-to-Offline Commerce
O2O Business
Domestic ICT Companies Eye Online-to-Offline Commerce
  • By Jung Suk-yee
  • January 13, 2015, 06:38
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Mobile service providers and mobile carriers are making full-scale expansion into the local Online-to-offline (O2O) market, which is estimated at 300 trillion won (US$275 billion). O2O refers to a method that brings consumers online into real-world stores or vice versa, based on ICT technology.

As the number of people who do mobile shopping has recently grown, ICT companies are actively seeking to dominate the growing O2O market.

Korea’s top portal operator Naver and Daum Kakao are expanding their O2O business. After its taxi business, Naver launched food delivery service LINE WOW. The web giant also opened an O2O platform named Shop Window in the country. Daum Kakao, on the other hand, is going to showcase Kakao Taxi soon, following simple payment service KakaoPay.

Moreover, mobile carriers have expanded their O2O businesses as extra services, on top of their e-commerce businesses using ICT such as NFC or Beacon technologies.

SK Telecom is most aggressively seeking to dominate the market. The country's largest mobile carrier is providing Syrup services using Beacon technology through its subsidiary SK planet. KT is operating mobile payment service MoCa Wallet, and planning to launch a service within the year that enables people to make payments on TV. In addition, the second-largest mobile carrier is going to start its mobile payment certification business during the first half of this year. LG U+ is also accelerating efforts to acquire social commerce site TMON. If the carrier starts its e-commerce business with the purchase of TMON, the move is expected to create synergy with its mobile payment service Paynow. It is also likely to be a future growth industry through the combination of telecommunications and network technologies.

According to a report on the trend of O2O and its implications published by the Korea Information Society Development Institute, the size of the Japanese O2O market is expected to grow from 24 trillion yen (219 trillion won, US$201 billion) in 2011 to 51 trillion yen (466 trillion won, US$427.4 billion) in 2017. The Chinese O2O market is also growing fast. The number of people using O2O commerce was estimated at 135 million as of late 2012, up 65 percent from the previous year.