Another Step Would Lead to a Sheer Drop: Social Commerce

We are back with the writing on social commerce. Have you ever used social commerce for purchasing goods? If you do, how did you feel about it? Was it convenient? One member of DSKUSSS wants to share his own opinion about social commerce. Please read this interesting opinion and express your opinions through comments.

Another Step Would Lead to a Sheer Drop: Social Commerce

Cha, Su-Min

Korea National University of Education

Dept. of English Education 

             Wemakeprice, Coupang, and Ticketmonster. These are representative channels of Korean social commerce which provide diverse advantages for customers, and the benefit includes discount, one-plus-one product, or at times gift certificates. The merit of social commerce is twofold; it is convenient while it contributes to frugal expenditure. In terms of convenience, you can download coupons with simple access to smartphones or the internet as the term “smartsumer (smart consumer)” suggests. Using given coupons is also a piece of cake since all you have to do is just show a mobile screen to a clerk, which would relieve your financial pressure. All this revolutionary system could have appeared thanks to commercial development, and its service spectrum is getting broader as time goes by; you can even fly to Vietnam only at a cost of KRW 99,000! There are, however, a number of problems that start to be revealed such as excessive competition between rival companies and ever worsening quality of products. Thus, there should be detailed discussion on how to let people realize the magnitude of situation after their being aware of dark sides of social commerce.

             The fast growth of social commerce industry has given birth to countless suppliers and it drove fierce competition to friction between them in the end. Even though it is strictly forbidden by commercial law to attack other companies even with reasonable grounds, companies are by and large busy diminishing other’s value. For example, Wemakeprice was issued a corrective order after conducting internet advertisements that reproached coupang. In addition, companies often cheat customers with highlighting price much lower than the actual payment amount, which is also prohibited by law. Coupang and Ticketmonster got corrective order regarding this point, and Wemakeprice was fined KRW 8,000,000 for indicating fake price in 2013. These indiscrete criticism and illegal movements originate from several factors such as product monopoly and competitive discount rate, staining desirable market formation.

             The worsening quality of products is another essential problem that should immediately be dealt with. According to the Financial Supervisory Service of Korea, business loss of Wemakeprice recorded over 30 billion won which is four times bigger than that of the previous year. Ticketmonster also lost over 70 billion won despite increased total sales figures. Unfortunately, the terrible financial structure directly affected the overall quality of products they offer. Wemakeprice got criticized for selling coupons for reserving motel rooms without adult certification while Ticketmonster was prosecuted without detention for earning 1.3 billion won by selling fake Ugg boots. As customers are eager to buy cheaper commodities and hesitate to buy things for prime cost these days, companies are utilizing customer’s consumption habits to cover their loss.

             It has not been long since social commerce appeared on a market stage, but it is fast generating serious at the same time core problems in both economic fields and daily lives. Therefore, it is not too much to say that there will be huge crisis or even total breakdown unless a proper control system is introduced in the near future. Harsh competition reminds the image of a gang fight which aims at occupying the “boss” position, and poor quality of products makes customers be doubtful about what we pick up in the market. In order to encourage the initial purpose of reducing economic burden and keep the market healthy as well, any form of discussion should be suggested. It might be an action on a governmental level, a grass-root campaign, or even small school assignment that stirs up public recognition. The gist is that people need to be aware of and interested in the situation regarding social commerce channels that they use without one-minute consideration. If it continues to go forward regardless of critical malfunction, the social commerce train will stop all of a sudden pushing passengers into great discomfort.