|A customer shop with SSG.com on her mobile phone. / Courtesy of SSG.com|
By Kim Jae-heun
Shinsegae's e-commerce platform SSG.com will launch an open market service starting December, challenging the top two players Naver and Coupang.
SSG.com has already started looking to host small dealers to sell their products on its online mall ― strengthening its platform power by increasing the volume of merchandise online.
Currently, SSG.com sells 10 million products that it directly purchases from manufacturers or trades with contracted vendors. The number is only one 10th the amount that an average open market offers here.
When SSG.com begins its open market service and offers more variety of products, the retailer will be exposed more frequently to customers leading to an increase in business volume.
In April, another retail giant Lotte Shopping opened its online shopping mall to small dealers to sell their products. Lotte instantly increased the amount of merchandise on its online platform from 1.8 million to 25 million.
SSG.com has already acquired permission from the Financial Supervisory Service to use its simple payment system SSG Pay with its newly launching service.
However, it will not provide overnight delivery service for small dealers, which could lower the competitive power of its in-house products.
A Shinsegae official said its rivals are Coupang and Naver. Naver Shopping is currently the leading player in the e-commerce market having recorded 20 trillion won of gross merchandise value last year. The number is 3 trillion won higher than the 17 trillion won of gross merchandise value that Coupang showed in the same period.
However, Naver and Coupang cannot be compared directly because Naver does not sell in-house products. In this sense, Coupang is the biggest feasible rival to SSG.com in the context that both are in retail as well as logistics.
To beef up its e-commerce sector, Shinsegae appointed its retail chain E-mart CEO Kang Hee-suk to also lead SSG.com.
Kang has been leading the innovation of E-mart since last year to cope with declining sales at the retail chain.
The CEO has been strengthening the fresh food and processed food sectors to raise the business performance at E-mart outlets.
He also expanded grocery sections at some retail branches to entice customers to visit the store, in the hope of convincing them to buy fresh food.
E-mart's sales soared by 18.6 percent to record 1.44 trillion won last month, compared to 1.21 trillion won achieved in the same month last year.
"We have appointed a leader who can prepare for the future of the company amid difficult times affected by COVID-19. We will continue to appoint CEOs based on their ability and performance," a Shinsegae official said.