Magazine Issue Name:
TA Jul 2008
Magazine Issue Date:
People across the world commonly exchange gifts, but tech-savvy South Koreans are now turning to mobile phones to do that thanks to the new converged m-commercial service launched by SK Telecom.
The service, dubbed Gifticon, combines barcode technology with mobile payment, and converges the online world with the offline world.
With the Gifticon service users can send gift vouchers for over 130 items from 40 merchants and brands, such as Starbucks, 7-Eleven, Haagen-Dazs and McDonalds, through instant messenger, WAP or the web. Once an item is selected, the Gifticon server, which is connected to partner companies, will send and authorize an SMS in real time. Those who received the messages can download coupons with embedded barcodes and exchange them for real products.
Kim Jihyo, manager of u-Commerce business at SK Telecom, said Gifticon attracted 2.5 million users with monthly revenues reaching 30 million won ($29,000) in 2007. Kim said the company expects revenues will grow to 10 billion won ($9.6 million) this year, up from 67% from 6 billion won ($5.8 million) a year earlier.
The service is available not only to SK Telecom users, but also customers of other wireless operators in the country.
Kim said the main users of the Gifticon service are in their 20s (40%) and 30s (17%), who often use SMS and IM for communications.
'They love the service because it is fun and easy and allows them to send small and inexpensive presents with messages anytime, anywhere to friends,' Kim told Telecom Asia.
The service not only appeals to mobile users, it also enjoys a strong support among corporate customers, with over 200 companies including Coca Cola, Motorola, KT, Hyundai Motors, HSBC, Hyundai Card and Microsoft using the service as a marketing tool to promote new products and increase customer loyalty and brand recognition.
Kim said the service allows SK Telecom to expand its wireless internet business from digital content services to offline areas, and the company is planning various marketing strategies based on its alliance with Gifticon service partners.
Andy Bae, senior analyst for Asia Pacific at ABI Research, attributed the success of the Gifiticon to its ease-to-use, non-intrusiveness and simple business model.
'Conventional push- and pull-type SMS coupons sometimes provokes users because they treat these as spam messages, but Gifticon allows users to purchase items spontaneously,' he said.
Users are more comfortable sending and receiving gifts to and from friends and colleagues while they are communicating with their friends, through bi-directional communication channels such as IM.
The low price of the gifts, ranging from 500 won ($0.50) to 10,000 won ($9.60) appeals to a broad audience, Bae noted.
He suggested that with the success of the Gifticon, which earned SK Telecom a number of industry awards, some operators in Asia, specifically Japan and China, are likely to adopt similar services.