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Tag: Korea

  • Korean firms to use petrol stations as logistics hubs

    Korean firms to use petrol stations as logistics hubs

    With the expansion of the ‘quick commerce market’, which offers guaranteed delivery within an hour, South Korean firms are employing gas stations as warehouses and logistics hubs.

    It has become a new alignment of interest between the quick commerce industry that needs logistics hubs in the heart of the city, and gas stations in search of a breakthrough as they struggle from dwindling sales with the emergence of eco-friendly cars.

    Shinsegae Property, property development unit of retail giant Shinsegae Group, signed an agreement with Koramco Energy Plus REITs to begin the development of gas station sites. The plan is to turn idle spaces at 187 gas stations owned by REITs into logistics hubs.

    Major logistics company CJ Logistics also signed an agreement with oil refinery and gas station operator SK Energy late last month to use their gas stations as logistics hubs.

    The plan is to set up small to medium-sized warehouses at these gas stations to keep stock of popular consumer goods to ship them out as soon as an order is placed.

    GS Caltex, South Korea’s second-largest refiner by sales, teamed up with local food delivery firm Mesh Korea last year to come up with plans for establishing logistics hubs at gas stations nationwide that will focus on short-range deliveries.

    This trend is partially the result of gas stations struggling to remain profitable. There were 11,290 gas stations in South Korea as of May and 109 gas stations had closed down in the first five months of the year, according to the Korea Oil Station Association.

    The Korea Energy Economics Institute said in a report published in January that number of gas stations in the country has been shrinking by an average of 1.3 per cent annually in the last 10 years, claiming that only 3,000 gas stations will be operational by 2040.

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  • Amazon launches in South Korea on local platform 11st

    Amazon launches in South Korea on local platform 11st

    Global online retailer Amazon and South Korean e-commerce platform 11st launched the Amazon Global Store on 11st on Tuesday.

    The move has made it easier to buy tens of millions of products available on Amazon’s US website, ranging from PCs, toys and fashion to electronics, with free shipping on orders over 28,000 won ($24).

    Though the service has been in operation in 12 other countries, it marks the first time Amazon is working with a local company for the launch. It also makes 11st the country’s “most extensive bookstore,” with millions of books now available.

    “Starting today, customers in Korea will be able to enjoy the most convenient way to shop global products, with free international shipping from the US,” said Somana Konganda, director of Amazon Global.

    Lee Sang-ho, CEO of 11st, said, “The launch of Amazon Global Store on 11st brings together the best of 11st’s local know-how and Amazon’s global retailing experience.”

    How does it work?

    Amazon Global Store was launched jointly with 11st, which means you have to sign up for 11st to place an order.

    You also need a personal customs clearance code, a 13-digit number starting with a P, for online international shopping. But foreign nationals living in South Korea can use either their passport number or alien registration number instead.

    After signing on to the platform, you can either search for a product you saw on Amazon’s US website or go to the main page for the Amazon Global Store to check out special deals and recommended items.

    Before your selected item goes into the basket, the website will show the price in Korean won and estimate how long it will take to be delivered, as well as how much the total cost will be including a customs clearance fee — which occurs when your order is worth more than $200, or $150 if certain items such as health supplements are included, for instance.

    ‘Universe Pass’

    On the same day the Amazon Global Store was launched, SK Telecom, which operates 11st, also unveiled the “Universe Pass Mini” and “Universe Pass All”

    Priced at 4,900 won, the more affordable version of the monthly subscription-based service offers free shipping to members regardless of the product’s price, though benefits are subject to change in the future, according to 11st.

    It also gives access to South Korea streaming platform Wavve, while the premium plan offers access to a wide range of subscription-based services including music streaming service FLO.

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  • Korean Internet Giant Opens Blockchain Units in Singapore

    Korean Internet Giant Opens Blockchain Units in Singapore

    Kakao Group will pursue the globalization of its public blockchain project, Klaytn, from the city-state.

    South Korea’s Kakao Group has established two new blockchain entities in Singapore – nonprofit Klaytn Foundation and global accelerator unit Krust, it announced in a statement.

    Kakao Foundation said in a statement that it would work proactively and systematically to expand the Klaytn network, while Krust, led by Dean Song, will work with the foundation to help accelerate its mission.

    We will actively invest our human as well as financial resources in developers and businesses of the blockchain world to accelerate the growth of our ecosystem and the development of our technology, the foundation said. Founded in 2010, Kakao Group operates messenger app KakaoTalk and internet bank KakaoBank. Kakao also recently won a bid to pilot South Korea’s central bank digital currency (CBDC) project.

    The Singapore development is funded by a $300 million blockchain development war chest that also includes an improvement reserve fund used for service maintenance purposes.

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  • Demand for luxury goods increased despite higher retail prices

    Demand for luxury goods increased despite higher retail prices

    Demand for luxury goods is continuing to grow in South Korea, despite price hikes and the Covid-19 pandemic.

    Chanel, a high-end fashion house, has already raised prices in the market twice this year.

    The French luxury brand raised the price of the Classic Flap Bag Medium from 8.64 million won (US$7,600) to 9.71 million won, and the price of the Classic Flap Bag Large from 9.42 million won to 10.49 million won on Thursday. Prices of other products, including Boy Chanel, also rose by a similar rate.

    Despite the increases, customers are flocking to Chanel boutiques at department stores throughout the country, lining up ahead of opening hours.

    While some customers complain about a constant rise in prices, the popularity of luxury goods continues to grow.

    Between May 1 and June 29, sales of luxury goods at Lotte Department Store jumped by 37 percent compared to last year. Sales of luxury goods at Hyundai and Shinsegae Department Stores rose by 54.1 percent and 38.8 percent, respectively.

    “Prices increases for already expensive products give off the impression of rarity and something that only a few can afford, which eventually boosts demand,” said Lee Eun-hee, a consumer studies professor at Inha University.

    “Customers are willing to spend more to buy them.

    “Ownership of luxury goods is seen as a competition among many to demonstrate the ability of an individual, a means to justify discrimination among people,” Lee warned.

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  • Coupang faces probe into unfair trade practices

    Coupang faces probe into unfair trade practices

    After stoking a series of controversies, including a fire at a logistics centre and poor working conditions, South Korean e-commerce giant Coupang is now facing a government investigation into alleged unfair trading practices.

    The Korea Fair Trade Commission (KFTC) recently noted that Coupang might have violated the Fair Trade Law and carried out a field investigation at Coupang’s headquarters in Songpa-gu in Seoul late last month.

    Coupang has allegedly manipulated its search algorithm to make its private-label products more visible than the products of other suppliers.

    The company manipulated the algorithm towards prioritizing and placing its private-label products at the top of the search results while placing other products at the bottom.

    The antitrust regulator is also investigating whether Coupang conducted ‘gapjil’ against suppliers. Gapjil is a Korean term referring to power harassment and abuse of power.

    Coupang has allegedly required suppliers to offer their products at the lowest price and penalized those who refused to supply their products at a lower price than the supply price for other platforms.

    In the field investigation, the KFTC checked the allegations that Coupang forced suppliers to purchase advertising space and excluded those who refused to do so from various benefits, including the company’s rocket delivery service.

    Another allegation was that Coupang unfairly returned products to suppliers.

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  • Korean court orders Netflix to pay for network usage

    Korean court orders Netflix to pay for network usage

    Netflix has been ordered by a Seoul court to pay network usage fees to mobile carriers. This decision was reached after Netflix brought SK Broadband, the internet protocol subsidiary of SK Telecom to court, following a complaint filed against Netflix with the Korea Communications Commission in November 2019. Netflix had asked the court to review if the US-based over-the-top (OTT) content provider is obligated to pay for SK Broadband’s network usage.

    After the review, the court ruled in favor of SK Broadband citing: “According to the principle of freedom of contract, whether to conclude a contract and what price to pay is a matter to be decided through the negotiations of the concerned parties.”

    “Netflix is at least receiving network services, including management of the network quality, at a cost.”

    This ruling is seen as a precursor for OTT content providers to pay for bandwidth usage fees in South Korea as the principle of net neutrality is losing relevance amid growing streaming audience and traffic. This is likely to impact the strategy of other OTT content providers such as Disney+ and Amazon Prime who are also looking to penetrate the market.

    According to reports, Netflix accounted for 4.8% of all network traffic in South Korea in the last quarter of 2020. Last year, Netflix’s sales in South Korea reached US$356 million, while operating profits totaled US$7.54 million. Year-on-year revenues grew nearly threefold from the preceding year.

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  • Gentle Monster opens another flagship store

    Gentle Monster opens another flagship store

    South Korean luxury eyewear brand Gentle Monster has unveiled its latest themed store in Starfield Hanam, Seoul.

    Dubbed ‘Self Similarity’, the theme reinterprets the mathematical concept through visual and spatial elements. The Starfield Hanam storehouses various artwork, images, and installations representing “the infinite possibility of ‘expansion’” through repeating geometric structures, such as fractals, Mandelbrot sets, and Julia sets.

    The newly opened flagship features The Probe, the brand’s six-legged walking robot which can also be seen in the Haus Dosan outlet.

    “The kinetic installations located at the facade, repeatedly expanding and contracting, and artwork that expresses infinite proliferation show Gentle Monster’s unique and artistic perspective on the concept of self-similarity,” the company described.

    Meanwhile, Gentle Monster chose Starfield Hanam to land Nudake’s second store in South Korea, offering a range of artistic desserts.

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  • Shinsegae, Naver win bidding battle for EBay South Korea

    Shinsegae, Naver win bidding battle for EBay South Korea

    South Korean retail giants Lotte Shopping and Shinsegae Group have submitted separate letters of intent for online marketplace eBay Korea, the retailers’ spokesmen confirmed on Monday.

    It is a deal that will almost certainly shake up the country’s e-commerce retail segment, potentially propelling one of the country’s largest retailers into becoming the leading omnichannel operator in South Korea.

    SK Telecom, South Korea’s biggest mobile carrier, and private equity firm MBK Partners, the largest shareholder of discount store chain Homeplus, reportedly dropped out of the race to acquire eBay Korea, which has been up for sale since last year.

    This week’s formal bidding marks the second attempt to divest its interests by eBay Korea – which represents about 11% of global sales within the U.S.-based eBay corporation – and it wants at least $4.43 billion, a price that is looking increasingly attainable.

    South Korea’s total e-commerce transactions jumped 25% last year according to Trade Ministry estimates and eBay Korea represents about 12.8% of South Korea’s e-commerce market, just trailing Coupang at 13% and market leader Naver with 18%. Its revenue is estimated at $1.17 billion, with an operating income of $76 million.

    Coupang listed on the New York Stock Exchange in March, becoming the largest Asian company since Alibaba to go public in New York and raising $4.6 billion. Founded by billionaire Bom Kim, a Harvard business school dropout, Coupang is now the country’s most valuable start-up with a market capitalization of more than $60 billion, backed by Softbank’s Vision Fund.

    By contrast, Lotte and Shinsegae’s market shares in the country’s e-commerce sector are estimated at just 5% and 3% respectively and the takeover of eBay Korea by either could reshape the country’s online retail segment and fast-track the winning bidder into a market-leading position. Both have struggled to catch up with the major online competitors, especially after the impact of the Covid-19 pandemic.

    However, the picture is complicated. Naver could be one of the biggest beneficiaries if Shinsegae is successful as it is believed to be offering support in financing any acquisition. The retailer and portal established a strategic alliance in March and Shinsegae could switch to Naver Pay as the payment platform for three e-commerce websites operated by eBay Korea: Gmarket, Auction and G9. At present, eBay Korea uses its own online payment system called Smile Pay.

    Top South Korean cellphone carrier SK Telecom and retail group E-Mart were still among the remaining suitors as the preliminary round of bids sought by the U.S. parent closed 16 March.

    Indeed, SK Telecom had been the leading candidate. The group also operates the online platform 11Street through a subsidiary, making SK Telecom the fourth-biggest e-commerce provider. But 11Street has struggled to grow, leading SK Telecom to partner with Amazon AMZN 0.0% in November in a collaboration initially limited to 11Street hosting Amazon products, but likely to expand in scope.

    Meanwhile, Lotte will no doubt view the purchase of eBay Korea as a springboard for rebuilding the group’s online business. In April 2020, the group merged the e-commerce sites of its department stores, supermarkets, electronics shops and other physical retail affiliates under one shopping platform called LotteON but it has failed to make much headway.

    While all the potential suitors have refused to give much away, Kang Hee-tae, CEO of Lotte Shopping, admitted during a spring shareholder meeting: “We’re certainly interested.”

    Launching in 2000, eBay Korea quickly grew and last year earned around $75 million in operating profit. But eBay Korea has been squeezed by rivals in recent years, while activist investors like Elliott Management have urged eBay to shed assets with poor growth prospects.

    The U.S. parent’s hope of securing a lucrative deal initially looked ambitious but then Coupang went public successfully, boosting its hopes.

    Whoever wins the battle for eBay Korea, the fact that the rivals are both major retail players should heat up the market and could lead to an array of collaborations and partnerships to fight scale with scale. South Korea is on the brink of the biggest online shake-up since eBay announced its arrival over two decades ago.

  • UniCredit Hires from Commerzbank for Korea Coverage

    UniCredit Hires from Commerzbank for Korea Coverage

    Milan-headquartered UniCredit has bolstered its Asia business with the hire of a head of Korea coverage from Commerzbank.

    Jaeho Mike Hyun joins the Italian lender as its head of Korea coverage, according to a report from «GlobalCapital», to oversee financial institutions and corporate clients for the market.

    In his Hong Kong-based role, Hyun reports to Asia Pacific chief executive Michele Amadei.

    Hyun was most recently Commerzbank’s head of Korea coverage, capital markets, after joining the German lender in 2013. Previously, he had also worked for Deutsche Bank in Seoul and Singapore in both in asset management and debt capital markets origination.

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  • HCMC stock exchange to test South Korean system

    HCMC stock exchange to test South Korean system

    Vietnam’s overloaded main bourse, the Ho Chi Minh Stock Exchange, next week will begin testing a new system from South Korea which it plans to use later this year.

    The system would have the capability to handle “many times more” transactions than now, Le Hai Tra, CEO of the exchange, said.

    A temporary system from FPT, which has been tested in recent months to deal with the overload, would serve as a backup, he added.

    HoSE signed a deal for the system in 2012 with the Korea Exchange at a cost of VND600 billion ($26.16 million).

    But since last year South Korean experts could not come to Vietnam due to the Covid-19 pandemic, and so installation was delayed.

    A record number of new investors in recent times has placed an extreme strain on HoSE’s outdated system.

    The bourse increased the trading lot from 10 shares to 100 and instructed brokerages to stop order changes and cancelations to reduce the number of transactions.

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  • South Korean retail firms Lotte and Shinsegae bid for EBay Korea

    South Korean retail firms Lotte and Shinsegae bid for EBay Korea

    South Korean retailers Lotte Shopping and Shinsegae Group entered separate binding bids for eBay’s South Korean business, the retailers’ spokesmen said on Monday.

    eBay Korea – South Korea’s third-largest e-commerce firm with a 12.8% market share in 2020, according to Euromonitor – is on sale for what eBay hopes could be up to 5 trillion won ($4.5 billion), analysts said.

    The retailers’ spokesmen declined to comment on the terms of their bids. An eBay Korea spokeswoman also declined to comment.

    Local retail giants Lotte and Shinsegae have struggled to catch up to leading competitors like South Korea’s No. 1 e-commerce firm Coupang in the fast-growing online shopping sector, especially after the onset of COVID-19.

    South Korea’s online shopping transactions were worth 161 trillion won in 2020, accounting for a record 27.2% of total retail transactions, up from 21.4% in 2019.

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  • E-mart set to quit Vietnam

    E-mart set to quit Vietnam

    South Korean supermarket chain E-mart is to exit its Vietnam business, with reports suggesting it will be sold to local car manufacturer Truong Hai Auto Corporation (Thaco Group).

    According to The Korea Times, E-mart announced earlier this week that it will sell E-mart Vietnam to Thaco Group. However, a spokesperson of Thaco said the group has not signed any agreements with the South Korean firm.

    E-mart has spent five years trying to establish a footprint in Southeast Asia, but in Vietnam had managed to open only one store, a second suspended due to local licensing setbacks.

    A South Korean media report said E-mart would take royalty fees from Thaco Group and its supermarket will be run as a franchise.

    “Our strategic alliance with Thaco will not only pay us royalties for using the E-mart brand in Vietnam, but also give us the opportunity to export our private-brand products,” an E-mart employee told The Korea Times.

    Predictions that the South Korean supermarket chain would exit Vietnam arose last year. However, its representative then denied the news and said it was looking into other options such as a strategic alliance or business partnership.

    Thaco Group’s commercial-services arm includes managing and operating mix-used business models including shopping malls, hotels and developing business lines such as supermarkets, food courts and cinemas.

    The group is currently operating businesses at Yangon Myanmar Center Complex in Myanmar and building its Socar Sala mixed-used complex in Ho Chi Minh City’s District 2.

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  • Vietnamese automaker acquires South Korean retail chain

    Vietnamese automaker acquires South Korean retail chain

    A THACO spokesperson said that the agreement will be signed this week. South Korean retail giant E-mart, owned by the Shinsegae Group, will stop operating its outlets in the country. Under the buyout deal, THACO will operate the chain as a franchisee and pay a royalty to E-mart.

    The South Korean established the E-mart Vietnam Co. in 2014 after three years of doing market research in the country.

    It opened its first megamarket in HCMC’s Go Vap District at the end of 2015, covering an area of 12,000 square meters. The megamarket consists of a shopping area, restaurants and a kids’ playground.

    It hiked its charter capital by 62.5 percent to VND2.7 trillion ($117.8 million) in 2018.

    The E-mart Vietnam management board said 95 percent of products it sold were domestically produced.

    Rumors had surfaced at the end of last year that E-mart will exit the Vietnam retail market, but the company denied them.

    South Korean newspaper The Korea Times cited the retail giant as saying it was selling its Vietnam operations due to difficulties in expanding the business. It had planned to open a second megamarket in HCMC’s Tan Phu District in mid-2018, but the plan was not realized.

    THACO has announced plans to open 10 supermarkets in Vietnam by 2025.

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  • Korean convenience stores start selling Covid-19 self-testing kits

    Korean convenience stores start selling Covid-19 self-testing kits

    Coronavirus self-test kits became available in supermarkets and convenience stores across the country Thursday as South Korea is seeking to step up its testing capacity with no letup of new virus cases insight.

    Self-test kits by two local drugmakers – Humasis Inc. and SD Biosensor Co. – have been sold at local pharmacies after receiving approval for emergency use last month, and they have hit shelves of supermarkets and convenience stores to provide easier access to the public.

    GS25, a convenience store chain, on Wednesday, started sales of test kits by Humasis and SD Biosensor at some of its stores, and its rival 7-Eleven said it will begin sales Friday.

    E-Mart, the nation’s largest discount store chain, said its major outlets in Seoul began to offer Humasis’ test kits earlier in the day and will distribute more in other stores.

    CJ Olive Young, a major health and beauty store chain, said it will sell Humasis’ kits starting Friday at offline stores and on its online channel, with a parcel delivery service available.

    A growing number of new cases has prompted the nation’s health authority to approve the use of at-home virus tests to detect patients at an early stage.

    Users can collect samples from their noses on their own for testing, and the results come out within 15-30 minutes.

    If users receive a positive result from the self-test, they are required to visit screening stations to undergo preemptive polymerase chain reaction (PCR) tests to get a more accurate result.

    On Thursday, the country reported 574 more COVID-19 cases, raising the total caseload to 125,519, the Korea Disease Control and Prevention Agency said.

  • Hyundai To Suspend Production At South Korea Plant Due To Chip Shortage

    Hyundai To Suspend Production At South Korea Plant Due To Chip Shortage

    It was earlier this week when Hyundai Motor suspended production at its Asan plant because of a chip shortage. The South Korean carmaker has announced that it will again halt production at its Sonata-producing plant for two days next week due to an electric parts shortage. According to a report from IANS, the automaker will stop operation at its Asan plant on Monday and Tuesday. This Hyundai plant is located around 100 km south of Seoul that produces the Grandeur and Sonata sedans.

    Hyundai has seven plants in South Korea, of which five are located in Ulsan whereas the other two facilities are located in Asan and Jeonju. Moreover, the company has ten overseas plants wherein four facilities are in China and one each in India, Brazil, Czech Republic, Turkey, Russia, and the US. The combined capacity of these plants is around 5.5 million units.

    The carmaker expects the four-day suspension will result in over 4,000 vehicles in production losses. Moreover, the company had also suspended operations at its Ulsan plant, situated 414 km southeast of Seoul, from April 7 to April 14 due to a parts shortage. Moreover, Hyundai produces Ioniq 5 and Kona EV cars at its Ulsan plant.

    The suspension comes because of a shortage of semiconductor parts used in Kona’s front vehicle camera system, along with an issue in Hyundai Mobis Company’s production line, which rolls out the traction motor for the Ioniq 5. The carmaker expects production losses of 6,000 units of the Kona and 6,500 units of the Ioniq 5.