Q&A: TMON Chairman Daniel Shin

Q: How has the Korean e-commerce environment changed since TMON’s launch?

A: The Korean e-commerce industry has become more mobile-focused since the launch of TMON in 2010, and we have experienced a dramatic shift toward mobile over the past few years. The year of 2010 was the time when the mobile era was opened in earnest in Korea, and thanks to this market condition, TMON was able to lead in mobile from the time of its founding. From 2014, our mobile sales volume quickly soared to be 60-70% of total sales volume.

Q: What is the strategy behind TMON’s latest moves to expand its grocery shopping and travel businesses?

A: Our core business is the marketplace, where TMON generates the largest profits by selling a variety of products. To help this core business, we also need a unique portfolio that is differentiated from competitors. The two unique services are fresh grocery and tours. The fresh grocery business can serve as a traffic trigger to increase the inflow of customers that visit our site frequently. The tour business is the area where we can generate considerable profits. Here, TMON also aims to cross-sell products in other categories when consumers purchase tour services. When we try to identify new verticals, we ask ourselves what our customers mainly need, and what we’re really good at.

Q: Bottlenecks in online payment processing remain a challenge to e-commerce in Korea. How has TMON’s approach  to these issues evolved?

A: Easy payment services are already well developed in Korean e-commerce, but it’s an area that has always been a problem due to process complexities around ActiveX and certificate verification. Two years ago, we launched TMON Pay which lets customers enjoy safe and convenient payment services by entering a single password. Customers can also settle payments without installing separate apps. Not only that, TMON has further enhanced its service through a partnership with Payco, the payment service of NHN Entertainment. With Payco, customers are able to do wire transfers and make simple payments with a credit card. At this point, our customers have hardly any difficulty settling payments.

Q: How has TMON used new technologies to differentiate itself from its competitors?

A: In our core marketplace, we focus on customization and media commerce in order to help our partners achieve effective marketing in a short period of time. In case of the tour business, we have invested a lot in developing flight search technology. Through partnerships with 12 major local travel agencies, we are able to search the largest number of outbound airline tickets in Korea. In addition, TMON now has technology to search multi-stop airline tickets following the acquisition of FltGraph, which uses its own smart search engine algorithm. In the mart business, a transport management system enables the only time window deliveries in the Korean market. With this, our delivery drivers can identify the most efficient delivery route, which helps us achieve success rate of 92% in delivering the products at the designated time.

Q: How would you describe the level of competition in the Korean e-commerce landscape?

A: It is quite competitive and probably the most intense e-commerce market in the world. Most of the players, including TMON, are putting a lot of effort toward providing differentiated customer experiences. Almost 15 companies – all of which have exceeded KRW1 trillion in transaction volume – are currently competing against each other. We hope to steadily grow through differentiation strategies and are aiming to be the first mobile commerce company as early as 2020.

Q: What macro factors do you expect to exert the most influence on Korean e-commerce in the near term?

A: First, it is anticipated that there will be a sort of consolidation in the market, and we will be one of the active players as we have some deep-pocketed investors. Second, there are some trends that will play an important role in differentiating our services. For example, media commerce will help us provide our partners with marketing while big data will be used to help develop exquisite customization and flight search technology. We consider ourselves both an e-commerce and an IT company, so we aim to rapidly integrate what our customers desire with services through technology.

Q: What are the main operational challenges for companies in the Korean online retail space?

A: The expectation levels among Korean consumers are very high. So in order to meet their needs, we’ve put a lot of effort into improving customer satisfaction. The biggest issue is to maximize customers’ satisfaction in service categories, such as delivery, refund, exchange, and cancellation. As a matter of fact, there was a lot of inconvenience in those areas during the early stage of the e-commerce industry, but TMON has been developing a variety of services for customers, including a free return service. We’ve also been putting efforts into developing a chatbot for our customer center in order to meet demand.

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• Topics
• North Asia
• Technology
• Consumer
• South Korea
• TMT