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Cyber Marketplace Thrives

Posted June. 10, 2003 21:54,   


In industrial societies, the roles of sellers and consumers were distinctly separate. Entering the information society in the mid-1990s, these boundaries started to collapse. The Internet has made the process of introducing products simpler, allowing consumers to sell goods as well if they want to.

Now consumers are becoming `sellsumers` derived from the words seller and consumer. They buy and sell goods in an e-marketplace. As information, once delivered from producers to consumers, flows bilaterally, consumers have become `prosumers,` derived from producer and consumer, who provide information to companies at the early stages of production.

Thanks to sellsumers, companies in the e-market are thriving. According to the principle, `Winner takes all,` the nation`s sellsumers gather at a particular cyber marketplace in 2003. It is `Auction` (www.auction.com).

The auction recorded a total of 150 billion won in transactions and the sale of 12.7 billion won in the first quarter of this year. The Internet auction company saw a surplus with a net profit of 6.1 billion won. In this cyber marketplace where sellers put their goods at auction and consumers buy them, 1 cosmetic product is sold every 25 seconds, 1 item of clothing every 5 seconds, 1 CD set every 50 seconds, 9 digital cameras and 5 TV sets every hour, and 2.4 tons of kimchi every day.

Unlike shopping malls where only new products are sold, every type of product including brand-new ones before the new release and even used ones, are traded here.

If you have a bicycle your kids outgrew, you can sell it at Auction. If you have an outdated camera because you upgraded to a digital camera, you can also sell it here.

In the past it was not easy for consumers to sell such used products because it cost them too much to find potential buyers. Auctions, however, made all this possible by providing a place where sellers and buyers can meet with ease.

Samsung Electronics recently put its mobile phone which appeared in the movie the `Matrix` on the U.S based auction site `eBay,` a large internet auction site. Only 500 units of the cell phone were produced and sold at the price of 2,325 dollars. At Auction, there are many such products introduced before they are put on the market. In other words, companies are trying to estimate the market value of their products before they decide on the price.

In the online auction site where 670,000 people involve in 110,000 trades, not all sellsumers were comfortable buying and selling products from the start. In April 1998 when Auction first started their online services, there were a great crowd who aimed to get profits from price fluctuations by purchasing unlisted stocks and selling them after the company got listed on KOSDAQ. However, few people wanted to hand over their money or shares first. There were a growing number of those who asked the company to keep the money and deliver it to the purchasers when they transferred their shares. Therefore, Auction implemented an escrow system in which a buyer puts their money into the custody of the company for delivery to a grantee only after the fulfillment of the conditions specified. Now the company plays a role not only as the marketplace but also the third party guaranteeing other parties` credit.

Auction was listed on KOSDAQ in June 2000. After eBay acquired the company in February 2001, it focused only on transactions between consumers (C2C) in accordance with the principle, `We concentrate on businesses that make money.`

President Lee Jae-hyun, who received his MBA from Harvard Business School, started `data management in earnest in July 2002 after having served as president of Thrunet. He established a data analysis team to improve services with about 200 various data. They include the time that it takes new members to bid for a product, the purchasing cycle, the amount of purchase, and marketing strategies.

Accordingly, for example, members interested in digital cameras can receive relevant e-mails in time.

Auction could have additional state-of-the-art marketing strategies provided by eBay, its largest shareholder. It currently provides its own new management techniques for other companies abroad. eBay Germany offered the idea that allows visitors to directly move to the interested page when they click advertisement. In addition, eBay USA adopted the chart developed by Auction`s Managing Director Park Ju-man for a standard of affiliated companies in 27 countries and dubbed it `Juman`s Chart.` They can manage all related data at a time through the chart.

Auction plans to concentrate on the cyber marketplace in the future. “Our goal is to expand the company and the market with up-to-date marketing strategies and become No.1 among the 27 eBay affiliated companies,” President Lee said. Currently, the company competes with eBay UK for second place following their German counterparts.

Seong-Yub Ra cpu@donga.com