Korea and the Future of Social Commerce
Korea Blockchain week inspires with the aura of innovation that radiates from Seoul, South Korea.
Attending Korea Blockchain week gives me new insights into the future of blockchain and E-commerce in South Korea. When a country puts “technology” first what happens to innovation is also predictable.
As the founder of YEAY and WOM Protocol apps, I’m always looking at how Gen Z are being innovative in how they share peer recommendations online and create value via organic word of mouth.
Social commerce has reinvented itself many times over and has now equipped itself with video, virality, more experiential apps, and stickier E-commerce value propositions. Gen Z is heralding a new kind of digital transformation wave. This goes beyond anything that Instagram or WeChat are doing. New user journeys and paths of digital to offline behaviors are taking place.
Social commerce is about authenticity and not just sponsored content. Honest user-generated word-of-mouth content is not what takes place on YouTube or Instagram, for the most part. Korea is a unique microcosm for technological innovation and how E-commerce is itself evolving along more social lines.
Open market-style “seller market” platforms are taking on new shapes and sizes to engage with younger consumers all over the world, but especially in places like China and South Korea.
With blockchain tech, it will soon be possible to create more honest product and lifestyle recommendations online without the necessity for Ads or sponsored content or black-hat gamification tactics or false incentives that dehumanize how we behave online.
The Evolution of Social Commerce is Dynamic
True social commerce, where customers remain in the social media ecosystem when completing a purchase, has long been a ‘holy grail’ for many brands. With WOM Protocol we are combining elements that are user-centric as well as being valuable for both retail brands and other app-partners while being value for peer networks while fostering creative user-generated content.
With the evolution of visual storytelling in content, platforms like Pinterest that are Millennial centric and content engagement platforms like TikTok, which are GenZ oriented, demonstrates the evolution of both lifestyle-focused visual storytelling (photography) and micro (meme-like) video which could successfully integrate lifestyle habits and retail purchasing.
This fusion of digital transformation and consumer behavior is now taking place and social commerce is thus a living and dynamic evolution of how attention, sharing and apps enable more convenience in how we relate to the world.
That world brings together and includes lifestyle, products, brands and content ecosystems. Social commerce is at a crossroads today in 2019.
As with any technology that requires a change in long-lived habits, social commerce has already gone through multiple cycles of big bets, widespread skepticism, wins, losses and ongoing debates.
Even as UGC, video content and social media have gone through many approaches and retreats in the evolution of apps, the big picture digital transformation story is still unfolding.
Korean Interest in Blockchain is Part of a Bigger Digital Trend
South Korea’s burgeoning interest in blockchain is part of an innovation-centric society.
The Government has prioritized education and technology at all levels of society.
- Within a generation, South Korea managed to transform its economy from one of the poorest to one of the richest in the world.
- This freshness has also stimulated a K-Pop culture that is now globally popular in far off places as distant as regions of South America or Europe, in music, television and original content.
- South Korea has a microcosm of its own apps that shows and mirrors some of the best experiences online that can impact the future of E-commerce and retail as well as social engagement online.
South Koreans have embraced Instagram and have their own apps for everything. KakaoTalk and Naver remain super popular. Naver is a bit like the Google of South Korea and, in 2019, is now already twenty years old.
Then there is the app Snow. Snow was started by Naver, the Korean firm behind popular messaging app Line, and it has proven popular in Japan, Korea, China and other markets in Asia thanks to a focus on localized filters, stickers and features. Snow is a bit like the Instagram of South Korea, with even better (Snap style) filters.
Relative to its population and size and tech-focus, South Koreans are also very E-commerce native as compared to the Japanese, for instance. Even with an aging population, this “silver economy” can translate into a hybrid social commerce app ecosystem that could thrive in the future of South Korea.
While Gen Z are leaders in app adoption, in Korea adults are so technology focused they are more digitally native, it would appear, than adults in other countries.
Line as a significant chat app in East Asia has both Korean origins and Japanese ties. This is the favorite WhatsApp and WeChat alternative for Japan, Taiwan and is still popular in Korea as well.
You might remember that Line amassed 50 million users in a little more than a year, while it took Facebook over three years to hit 58 million users.
Line’s stickers are a kind of social commerce in their own right, and have proven popular and sticky for users of the app. The story of how Line is integrating crypto and how chat apps in general plan to do this at scale is one of the great movements in social commerce that is underappreciated.
Crypto and Chat Apps are Joining Forces
Cross border payments in chat apps could take off in the years to come and integrate elements of “social commerce” into how new convenience is experienced by consumers and shoppers. Blockchain and crypto are clearly going to be a big part of this.
We must not forget that Line is now a Japanese subsidiary of the South Korean internet search giant Naver. From Telegram to Facebook’s Libra payment tool, to the widespread popularity of stablecoins as an important kind of digital currency hybrid between altcoin and fiat, social commerce has just incredible opportunity in the blockchain domain.
Korea is the Most Innovative Country in the World Per Capita
South Korea in 2019 ranked first again on Bloomberg’s list of most innovative countries.
Top Blockchain Startups in Korea in 2019
South Korea’s widespread recognition of the importance of blockchain technology demonstrates the viability of blockchain startups.
- ICON. Korean Blockchain startup ICON is the largest blockchain network in Korea. They provide a blockchain sharing ledger for industries such as hospitals, banks, securities, universities and insurance companies. In addition, ICON has its own cryptocurrency token called ICX and is looking to do an IPO sometime in 2020. They will need to first pass a technology evaluation process and preliminary review before they can do an IPO.
- BlocKo. Korean Blockchain startup Blocko that focuses on providing a blockchain system for transaction validation, user authentication, wallet management and micropayment solutions. Blocko has been working with the Bank of Korea to help them use blockchain technology for their financial transactions among consumers.
- Bithumb. Bithumb exchange is one of the most popular and largest cryptocurrency exchange based in South Korea, according to data of the site Coinmarketcap. Its regularly feature in lists of the world’s 10 largest crypto exchanges in 24-hour trading volume. This is the company behind the cryptocurrency project Dash. Bithumb has a lot more to offer other than exchange. It has gift cards and other remittances, as well as extra services, include coupons.
- UpBit. The Dunamu and Kakao-backed crypto trading exchange platform seeks to make huge leaps after it was launched in October 2017. It boasts over 1 million users and KRW 10 trillion in daily trading volume. In addition, Dunamu which operates Upbit has already outlined huge plans to invest up to US$93 Million in blockchain startups. This will make Upbit a force to reckon with among the crypto-exchange competitors.
- DeBlock. Deblock is a Blockchain accelerator that pursues decentralized, secure and transparent pre-ICOs. In addition, they have plans for investing in blockchain projects, supporting blockchain business models and entrepreneurs and the provision of office space.
- Terra. Korean Blockchain startup Terra aims to create a stablecoin that can be used on Terra’s blockchain payment solution. Terra has been aggressive in their partnerships, bringing in eCommerce companies to join their Terra Alliance ecosystem. Therefore their focus is to create the next generation of modern financial system on the blockchain. Their goal in 2019 is to target e-Commerce platforms through the Terra Alliance which is a group of global e-Commerce partners (TMON, Woowa Brothers, Baedal Minjok, and etc) formed to help drive mass adoption of blockchain payment systems. In addition, they have already created their own blockchain-based simple payment service called Terra Pay. Terra could potentially go beyond e-Commerce and into all types of financial products like loans and insurance.
- FanTom. FANTOM is the world’s first DAG based smart contract platform that solves the issue of scalability and confirmation time in the existing blockchain technology. Their token sale ended in June 2018 and they were able to successfully raise $39,653,398 of their targeted $39,400,000 (101%). They aim to solve existing problems related to supply chain management, food, telecom, banking and real estate.
There are obviously dozens of other blockchain startups worthy of mention. Honorable mention goes to:
- KorBit
- Proof Suite
- theLoop
- Foresting
- Lucidity
- Medibloc
- Haechi Labs — Hensis
- Kodebox and many others.
Last Words on the Emergence of New Kinds of Social Commerce
While some industry experts believe the marriage of social and commerce will never move far beyond the research and recommendation phase, it’s more likely social commerce will become part of the internet’s growing ubiquity in our daily lives with the expansion of technology into new domains.
New domains like micro-video, podcasting, vlogging, voice-commerce, IoT and VR are all digital touch-points of how peers, consumers and lifestyle interests experience themselves in the new world of technological innovation.
This will mean social commerce itself gets upgraded with AI, blockchain, and IoT, and not only in apps. However with blockchain, 5G and new kinds of phones like folding multi-purpose ones, what apps become will also tread new ground.
Feel free to check out what we are doing with the YEAY app and WOM Protocol in the space of social commerce and how it evolves with lifestyle, fashion, product and experience recommendations for young people, brands and app partners.
We’ve recently witnessed a significant spike for YEAY adoption in South Korea including recently 12k downloads and 2k registered users.
The YEAY app will be the first platform to adopt the WOM Protocol. YEAY is the leading video-based recommendation engine with a global network of creative, active, and predominantly GenZ and Millennial users. This makes YEAY the ideal platform to discover the power and flexibility of the WOM Protocol.
You can find me on LinkedIn here. On Medium, I share about Gen Z, the future of marketing and blockchain.
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About Me
I’m a Berlin-based entrepreneur with 20 years’ experience in media, marketing and mobile tech. In 2016 I founded YEAY — the leading community for Generation Z to share honest recommendation videos with one another about the lifestyle products they love. In 2018 I became the founder and CEO of the WOM Protocol, the blockchain project helping brands tap into peer-to-peer recommendations and digital publishers monetize their platforms in a user-friendly way through word-of-mouth content.
