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Will Korea just envy China`s rise in IT industry?

Posted November. 13, 2015 07:42,   

한국어

China`s annual Singles Day shopping extravaganza, the Chinese version of the U.S. Black Friday sales, smashed a sales record with a single-day sales revenue of 91.2 yuan (14.3 billion U.S. dollars) on Wednesday, more than quadrupling the combined sales on the U.S. Black Friday and Cyber Monday. Chinese online retail giant Alibaba, which organized the event, earlier said, "The whole world will witness the power of Chinese consumption on November 11."

The online shopping bonanza, in which consumers from some 180 countries splurged on various items, set a series of new records in the world`s shopping history. Sixty-eight percent of the transactions were made on mobile devices, while the sales in the first 12 hours surpassed last year`s total sales. Companies like Bellamy`s, an Australian producer of items such as organic milk powder, ran out of stock in its native country due to Chinese appetite for the product. As 1.7 million delivery personnel, some 200 cargo planes and 400,000 vehicles were reportedly mobilized, the shopping event would have had significant impacts on other related industries. The Singles Day, which started in 2009 for lonely singles, has become a global shopping extravaganza, increasing its sales 1,800 times in six years by attracting 1.4 billion Chinese consumers with mobile settlement via an electronic currency, a "smart" logistical network system ensuring delivery any in China within 24 hours after an order is placed, a large-scale marketing campaign involving Alibaba`s star CEO and celebrities, and steep sales of more than 50 percent.

Although Korean companies on Alibaba`s online shopping mall were the third largest sellers after those from the United States and Japan, such a spectacular event dwarfs Korea`s Black Friday sales event that took place from October 1 to October 14. It is true that some 34,000 sellers, including department stores, traditional markets, convenient stores as well as online shopping malls, participated in the event, increasing sales and helped rekindle slumping consumption. However, a private company in China, a communist country pursuing "capitalism with Chinese characteristics," induced active participation by manufacturers and offered deep discounts of 50 percent or more. In capitalist South Korea, the Korean Black Friday was led by the government, offering discount rates similar to those of usual sales events.

The Singles Day is a reminder that South Korea is about to be surpassed by China not only in heavy industries but also in information and communication technology and distribution services industries. South Korea started electronic commerce in the 1990s but has failed to raise a star player like Alibaba. The mobile payment system is the icon of Alibaba`s innovation. South Korea`s Daum Kakao also introduced its mobile payment system in 2012 but the deployment was delayed due to government regulations. The central Bank of Korea said in its July report that China`s e-commerce grew rapidly due to the government`s active support and the Internet penetration. Seoul`s Ministry of Science, ICT and Future Planning set up a task force for promoting e-commerce belatedly in June. In the information technology field where speed is vital, the prospect for Korean e-commerce industry going global is bleak.