Social Commerce Websites

2012-12-14

Side Effect 3 - Qaulity of Service

3. Quality of Service

Normal Social Commerce Sites sale the products which are appropriate with the costs but sometimes there are cases of very low products.

Even more, the Social Commerce sites deceived consumers with the quality of services. For example, they registerded some products which look same with the proper one but later it turned out to be a fake.

Fake/Imitation product

Social Commerce Sites' low quality services not only harm themselves but also the actual real companies which produce real products for consumers.

Due to the fakes, this real company also lose faith from customers and also their brand value as well.

This can damage in a very big way to those real companies.

Peoples' thought on Social Commerce

Where to report the damages from Social Commerce

National Police cyber investigators team
Consumer consulting center
Korea Consumer Protection Board

The most important virtue

It is an undeniable truth that social commerce is on the rise. Many people even commented that social commerce is the most brilliant business model after Google. In order to further thrive, social commerce service providers should be wary of many potential dangers hidden in the industry and deal with the problems wisely.

Social Commerce Sites' most valuable and necessary virtue is 'Trust' above all.

Side Effect 2 - Fraud

2. Fraud (False advertising & Price unsuitability)

Many of people might know that there are some false or deceptive advertising in the Social commerce sites. This negative situation comes from the fact that it is also a kind of online shopping. Consumers cannot see the registered products in themselves and can only check the information mentioned on the page.
Additionally, social commerce sites have a very short term for the products at a half price. If the consumers miss that time, they no longer have the opportunity to buy that product at cheap prices. So they cannot think thoroughly whether that service is really needed to them or not.

Coupang's false advertising case

Coupang was caught because of their false advertising.
They tried to sell Australian Beef by deceiving consumers that it is A-class Korean Beef.
It was not just deceptive advertising. It was completely intentional false advertising of the Coupang.

Price Unsuitability case

In some cases, the social commerce sites pretend that the services are very cheap like it is nearly half price of the original but actually, the price itself was not expensive. The owners of social commerce sites changed the labels themselves to make it look originally expensive.

To consumers

People who use the services or purcahse the registered products, must check whether the price of the product is appropariate and worthwhile.
For example in case of travel category, they should make sure that the content of the journey plan is well-made.
For things like concert tickets, find out whether it is proper ticket or not.

Side Effect 1 - Refund & Compensation

Side Effects

There are many potential dangers in social commerce business. The quality of services provided by local service providers might be poor. Thus, social commerce service providers must make sure that registered services are of good qualities. It people keep feeling disappeared of unsatisfied, social commerce business will be in danger of dissolution.
At the same time, the management of those local service providers should be rigorous enough to guarantee the quality of services provided.

1. Difficulty in Refund & Compensation

Lots of consumers have trouble dealing with refund of the products they buy.
Social commerce system minimize the margin and sell products to people. Therefore if there are small number of consumers, they get to make loss. In this point, it is hard for them to refund the products.

Along with the change of mind on the product, many consumers demanded refund the social commerce tickets because the expiration date was over. They could not use the ticket. Originally when consumers could not use it until the due date, the social commerce sites pretended it as the consumers' fault and did not refund the money back to them.

This is a news article contains consumers' dissatisfaction with the refund problem.

However, in 1st of June, 2012, the rule on this refund problem changed so that consumers can receive their money back but just 70% of the ticket price.

Main Social Commerce sites were told to protect the consumers with 70% of refund.
Actually, it is not accurately refund, but compensation which is changed as the saved money in that site.

However, this refund rule is not applied in certain categories of services which are travel, leisure and culture. Also amusement parks and large franchise restaurants are excluded in this rule.

To customers

Consumers are also required to check the product information in detail especially the due date of the tickets and make sure they can use it on time.

Internal Limitations

Internal Limitaions

On the other side of positive aspects,

Social Commerce System itself also has its internal limitations.

The table chart above shows the income and expenses of Ticket Monster.

Red box highlighted is the amount of sales Tmon has made so far and the blue box underneath is the net loss during the term. As you can see, sales amount of 2011 has increased nearly 10 times more than 2010. However, the net loss during the term in 2011 has rapidly inceased perhaps more than 26 times compared to 2010 as well.

As a result, it is telling that the loss of the company is far bigger than the profit of the company. The problem is that this is not just only for Ticket Monster, it is also applied to other social commerce sites too.

Labor intensive industry

Many people regard Social commerce site as online-based business but actually, it is completely offline-based business. Hundreds of salesmen must visit the local business establishments individually to run the social commerce system.

If they fail with dealing with them, the service might stop even that day. So as the amount of sales increase 10 times larger, the pay for the salesmen, photographers and designers also increased even more than 18 times.

Like this, Social Commerce must pay for considerably high cost on personnel expenses, operating expenses and overhead expenses from the profits on sales.

To make it in one sentence, Social Commerce with group-purchasing system is an industry of low busines profits.

Cutthroat Competition

Unlike other normal business, Social commerce has limited business district, and therefore cutthroat competition is unavoidable. Due to the fact that it is locally based business, all the social comerce sites have to do the zero-sum game to occupy the business establishments such as restaurants and other shops.

Furthermore, in 2010, when there was a boom in Social commerce market, heaps of Social commerce sites began to spring up everywhere. Many people tried to success by operating this system but in the end, they all quietly disappeard wtih negative results. Thus now, there are 4 main sites in Korea (Ticket Monster, Coupang, We make price, Groupon) which won the competition.

An article posted above, has a tragedic content which really occured this year in Korea. A social commerce site 'Ticket Aladin' 's owners who were married couple, suicided together due to the financial burden. They could not send the gift certificates to the consumers who bought them. Shortage of money, unstable operating system and lack of experiences led them to death.

This shows how the boom of Social Commerce sites negatively affected.

Mobile Ticket Monster

Mobile Ticket Monster App

The rapid growth of Social Commerce's background is above all, the appearance of 'Smart group' who use smart phones. They can use social commerce services wherever, whenever they want by smart phones and this fact is also valuable in industrial aspect.

Tmon Today : Home

Today's recommendations! (Yellow box) : Can find out what the site is recommeding to the customers

Recommending Planning Exhibition (Green Box): Can check the products lists of exhibition in one sight by the mobile phones

Tmon Best (Pink Box): Can see what the most popular products are in the sites

Tmon Today : Category

<Travel, Leisure> <Culture>

Tmon Today : Product Information

Check and purchase the products quickly and conveniently

The yellow box of the left picture is selecting products in your mind which is similar to cart function.

The blue box of the right picture is button of looking at the reviews of the products.

The orange box on the right bottom is showing the best items of certain categories.

Tmon Now : Real time discount coupons

You can check the specific information of the products and location of restaurants.

My Tmon

You can check what products are in your cart in your page.

Lastly, this is the coupon you bought in this site.

Expanded Network communication' s process is now beyond the boundaries of capital and physical barriers.

Campaigns of Ticket Monster

Social Give (SO speCIAL GIVE)

"Social Give" is one of the campaigns of Ticket Monster.

This campaign's purpose is selling and advertising products of social enterprices without receiving distribution charge. The whole 100% profits of the marketing goes back to that social enterprices and other poor countries.

<2012.05.08>

This chocolate power sticks are 100% organic made from "Beautiful Market".

"Beautiful Market" is a fair trade company that sell hot chocolate and coffee.

Ticket Monster and Beautiful Market cooperated together and registered the products on the sites. Those were sold at very cheap price because the middle distribution cost was excluded.

All the profits made from this campaign were send to Nepal and Peru where the helps were desparately needed. With this costs, some hospitals and schools were founded in those countries.

Consumers in the sites natually helped those people in Nepal and Peru with also buying what they want.

It was a very impressive campaign of Ticket Monster.

It has Upgraded to 2.0!

Ticket Monster's Social Give was upgraded by forming a partnership with 'UN WFP (United Nations World Food Program)' and 'Save the children'.

They expanded the scale of contribution to worldwide countries.

CEO of Ticket Monster tried to upgrade the size of donation through this social commerce site.

This time, the contribution costs were given to humanitarian institutions and were used as providing food to kids who suffer from stavation in other countries and Korea as well.

<2012.08.22>

'Emergency aid for Sahel in Africa' was the first donation activity.

Features of Ticket Monster

Special Features of Ticket Mosnter

Ticket Monster recently redesigned the main pages. So it now has some unique features.

1. Cart funtion

This function was introduced to help consumers to have more convenient online shopping.

2. Searching function

The red box above is the searching function. There are plenty of products in the Social Commerce Sites so finding the products what the customers eactly want is very hard. According to that, Tmon added searching function to meet customers' demand which is finding the products quickly.

3. Recommendation of 15 products

Lime colored square box shows the display of recommanding 15 products. This function enhanced the shopping curation system. Unlike other normal online shoppers who buy the products with their plans, social commerce shoppers purchase the products whenever they find any attractive products in the site. So this site tried to make full use of that tendency of consumers.

Position & Outcome of Ticket Monster

Until now, Ticket Monster has made lots of positive and surprising outcomes during 2 years from the foundation. Also it now takes higher rank position in Social Commerce Market in Korea.

The video clip underneath shows this results of Ticket Monster well.

All about "Ticket Monster"

Ticket Monster

Meaning of "Ticket Monster" : Providing precious experiences to customers by 'tickets' and grow up with 'moster power' in the online commere market.

Logo & Font - By using smooth and flexible line of font, Tmon tried to get closer to customers more friendly.

History of Ticket Monster

Like other Social Commerce sites, Tmon developed progressively by enlarging the regions of thier influence in Korea. Also they classified the categories step by step as it grew. In 2011, they started to take over other companies and launched some brands as well.

Awards of Ticket Monster

Ticket moster was given the 'Best Korea online business award' in 2010. Also the CEO of this company was chosen as the 'New Best CEO' in total. The consumers were satisfied with this site the most and it also got the '2011 Best App award'.

Characters of Ticket Monster

This impressive orange character is the representation of Ticket Monster. It was made to friendly, and closely communicate with the customers. It appeared in TV commercials and other advertisements and now it has high awareness by many people.

Furthermore, Tmon started to find the human character which excatly fit to the image of the brand. The needed characteristics were faithfulness and friendliness. Searching for the most suitable actor, they finally chose Kong-Yu as the main model. He was right for the concept which was changing the characteristic from bad guy to cute guy in the commercial.

2012-12-13

Foreign Social Commerce Sites

Foreign Social Commerce Site "Gilt"

As Korea has lots of Social Commerce Sites, foreign countries also have many sites which started far earlier than Korea. Although those sites are foreign sites, Koreans can purchase products as well. There are also the duty-free products displayed in the sites.

Among many foreign sites, I chose "Gilt" as the example of foreign Social Commerce site.

Unlike Korean sites, the main page has relatively simple image of classifications and displys of products.

http://www.gilt.com/invite/jemmapk

Here is the process of buying a product on this site.

1. Join to be a member of the site

Insert your email address and password.

You also need to check in your gender ungerneath.

2. Press 'Gilt full site'

If you don't click this button, you cannot see all regitered products at one view.

3. Choose a category you want

Yellow box on the top of the site, shows the big main categories that this site has. The blue box below displays the detail categories that belong to the big categories. So you can choose anything according to your taste.

4. Look through at the pictures of the products