5 years have passed since smartphones first swept over Korea. Looking back, a lot has changed in such a short time. Platforms have changed according to consuming paradigmshifts such as KakaoTalk instead of phone messages, and Facebook and Instagram instead of Cyworld.
The most noteworthy change is how purchasing goods through the small hand-sized smartphones have become common.
E-Commerce. It is an area that open markets such as Auction, G Market, and 11th Street held power in for nearly 10 years in Korea. But the pursuit of social commerce is fast. Ticket Monster’s sales in the year 2014 was 157.5 billion KRW. It is not a number that exceeds the open markets, but it is a threat, considering its yearly growth of 50~70%.
What kind of importance does mobilehold to Ticket Monster, which first started social commerce in Korea? We met with Hyun-Sung Shin, the founder and representative of Ticket Monster(picture), on the 6th to discuss about the last 5 years and to predict the next coming 5 years.
◇ The real mobile era has come
Representative Shin emphasized that “T Mon’s relative success was due to smartphones.” He thinks that acting ‘mobile first’ earlier than the open markets that had power in commerce during the PC era gave T Mon an opportunity. We listened as he further explained.
“Currently, over 70% of Ticket Monster’s dealings come from mobiles. An amount in the trillion KRW units is coming from this small screen. I personally believe that is an amazing change. There was a time when the products on apps’ or websites’ wallpaper was placed under human hands. Now they are curated under an algorithm, purchasing is simplified under technological developments that allow easy and efficient purchases and I believe that all these technological advancements are what drive mobile based commerce.”
T Mon, as can be inferred from the company’s name ‘Ticket Monster’, is a company that sold discount tickets of local restaurants, hair salons and etc. Compared with how it used to be back then, it now took a turned 180 degrees in a different direction. When customers open the T Mon app, various products welcome them. It is no longer a company that carries out local ticket sales. It has become a mobile commerce company. Exactly what kind of changes happened during the last 5 years? Representative Shin explained on.
“At the beginning of foundation, the focus was about gaining customers by creating high discount rates in attractive restaurants and hair salons. But as Ticket Monster gained popularity, a number of companies began contacting us to ask if they could sell their inventory products on the Ticket Monster website. At first, we declined because it went against our business identity. Then we sold several products of some companies by chance, and they sold very well. We then created merchandiser(MD) occupational groups and increased the number of products and deals. Living Social and Groupon took us over during the process. Recently, we were able to re-purchase Ticket Monster with Kolberg Kravis Roberts (KKR) and Anchor Equity Partners (AEP).”
Representative Shin re-purchased Ticket Monster from Groupon last April with KKP and AEP. It is the first time that those two companies invested in a Korean company. He explained that it is ‘necessary to focus on profits rather than innovations when you’re a part of a specific company. A stage for a more aggressive business has been set up.”
◇ Social Commerce-> Mobile Commerce-> Communion Economy Commerce
Recently, he is focusing mostly on ‘customer experience’. It is an attempt to go beyond simply selling products at a cheap price. Data analysis to show products that customers would want, and delivering them in a way that customers would want are all included. However, Ticket Monster is showing a different business walking than Coupang’s rocket delivery. Coupang took a strategy of hiring delivery drivers for delivery on the day and friendly delivery services but Ticket Monster is creating a service of ‘super delivery’in which delivery drivers gather through a platform.
“Coupang takes a ‘strategy of purchasing everything then internalizing them’. I personally believe it is a strategy that worked in the 1990s around when Amazon was first founded and there were no infrastructures. Compared with back then, there are a lot of resources that can be used. Ticket Monster connects given resources and is focusing on creating synergies in between. Why don’t we look at Uber as an example? It is a company with a value of 50 trillion KRW without purchasing any cars and simply grouping existing cars under an app. There must be a communion economy strategy that can be applied to delivery. Cooperation with other E-commerce companies seemed appropriate when delivering products to customers so we recently entered Alibaba’s T Mall. I think that this is also an example of communion economy.”
The company thatrepresentative Shin used as an example when emphasizing communion economy was ‘Xiaomi’. He explained that Xiaomi continuously releases new products through over 80 cooperative firms’ suggestions and this gives an advantage in terms of speed compared to companies that create everything internally.
◇ Mobile Commerce’s future
Which market would be the next step after delivery? The answer to this question was “there are too many”. He thinks that there aren’t many companies that are performing well when the products sold on platforms are analyzed.
“In the case of Home Deco, when someone was to ask ‘is Ticket Monster performing better or is G Market?’ I have no confident answer. The same applies to the beauty category. If category competition had been about shallow superiority until now, I believe that whoever excels in a particular area will own the market. Curators that suggest products to customers must still be improved. I personally believe big changes will be made within a year or two. ”
The biggest reason behind Ticket Monster’s success in the market for the last 5 years is customer centered services and representative Shin says that customers will continue to be the goal of T Mon. There are voices of concern towards the continued deficits of the social commerce business, but he thought differently. In order for T Mon to gain power in the E-Commerce market that would have a value of over 200 trillion KRW in 5 years, T Mon must move closer towards their customers and create services that customers want. T Mon has only just left the starting point.
◇ Ticket Monster’s power lies in ‘differentiation’
Q. When you first founded Ticket Monster 5 years ago, did you think about becoming a mobile commerce company?
No, I wasn’t expecting this at all. At the time, I thought the local market was all that Ticket Monster had. The goal, of course, was to become a global company in the local area. But T Mon was able to grow beyond ‘social’ to ‘mobile commerce’. I believe it allowed an even faster growth.
Q. 1,200 workers alone. It wouldn’t have been easy to flexibly adjust to market changes as a large group.
We do not fear trying new things and do not blame anyone for any possible failures. A lot of groups in Korea blame those responsible for any mistakes that they may make. We place fault on those who don’t make efforts but encourage attempts for new and popular ideas. I believe that many people would have passed through T Mon and not some other social commerce, could successfully create companies such as Meme Box or JIVER for that reason. This characteristic acts as both strength and a weakness. If someone were to ask who can achieve innovation the fastest in Korea, I can answer with confidence that it is Ticket Monster. At the same time, I believe we also have the highest possibility of failure(laugh).
Q. What do you think is the biggest reason behind Ticket Monster’s popularity and satisfaction from customers for the last 5 years?
I believe the fun and new attempts are the biggest reason. Customers viewed our deals (such as Gundaeria (Army Burgers) or Space Trip) as fun and that itself became part of Ticket Monster’s brand. The 50% discount rate deals sold at the beginning played a big role as well. They provided enjoyable experiences to our customers. The Ticket Monster of today is a result of customer-oriented decisions such as fast refunds and returns when needed.
Q. What could be the reasons behind companies’ poor adaptations to mobiles when they used to have so much power in the PC environment?
I believe it is a rather simple reason. The reason why a lot of companies cannot make a smooth transition to mobiles is not because they don’t know the answer but because they aren’t bold enough. Shall we take a look at the structure? Most structures are created based on PCs. The platforms are also based on PCs. It is not easy to change directions due to old habits. In 2010, Ticket Monster was a startup that had little to lose. EBay Korea was already at the top of E Commerce with G Market and Auction. We made a decision to turn to mobiles in order to survive.