KOREA: SK Telecom launches internet shop

SK Telecom's The 11st Avenue offers services such as interactive chatting to differentiate itself from other e-commerce markets

The Korea Herald
Wednesday, February 27, 2008

By Jin Hyun-joo

SK Telecom is set to launch an online shopping mall today, as the company ramps up its push for a take of the rapidly-growing e-commerce market.

SK Telecom, which has nearly half of the nation's 41 million mobile phone users, is expected to capitalize on its broad customer base and strong cash flow to boost the new business.

The online retailer chose to go with "The 11st Avenue," as the name of the new online outlet despite the obvious grammatical errors. The nation's top mobile carrier said they chose the name because "st" also means street.

The 11st Avenue adopts a so-called "open market platform," which allows both individuals and companies to list items for sale.

The nation's customer-to-customer market is dominated by Gmarket and Auction, which take up a combined 80 percent of the market.

SK Telecom, which operates four other internet shopping malls, said it aims to achieve a transaction volume of 600 billion won ($610 million) to become the third-largest player in the customer-to-customer market this year. It targets over 1 trillion won in transactions next year.

The 11st Avenue aims to differentiate itself from its rivals by offering a fun shopping experience to visitors, such as interactive chatting services, enabling customers to share their shopping experience with friends. "Many customers have been shopping online and doing product research, but up until now it has been more of a chore," Jung Nak-gyun, an SK Telecom official, said at a media briefing yesterday. "But our customer survey showes that times have changed and people want to enjoy online shopping," he said.

The company will also roll out a mobile version of the mall in March.

Jung dismissed rumors that SK Telecom is looking to purchase Gmarket, the open market leader. Gmarket's parent company, Interpark, said early this month that it was in talks with a number of prospective buyers to sell its entire 29.4 percent stake in Gmarket. The deal was said to be worth more than 400 billion won.

"For now, We are not considering buying the company," Jung said.

SK Telecom, which is focusing on expanding overseas to boost sales, also said it will enter China's e-commerce market this year.

The size of Korea's open market, estimated at 7.9 trillion won in 2007, is expected to more double to 20 trillion won by 2012, according to several SK Telecom projections. The market is expected to achieve average annual growth of 21 percent by 2012.

The e-commerce market is forecast to expand over 16 percent annually to reach 35 trillion won by 2012.