“It is to have a huge impact on the four big names in the local social commerce industry and U.S.-based giant Groupon is most likely to be pressured to take over domestic players like Coupang or We make price.”
Last week, Ticket Monster, which has been serving as the country’s largest social commerce firm, announced U.S.-based LivingSocial sealed a deal with the company to acquire it in a bid to make a big push into Korea.
The event immediately grabbed attention because Ticket Monster, established in May of last year with only five employees, had been a dream-come-true project for Korean venture firms.
Led by chief executive and co-founder Daniel Shin, it now employs more than 500 workers and has spread its project portfolio to a nationwide scale. The company, however, has been denying rumors of a possible merger with other stronger global players, further stating that business expansion in Asia has become a reality and that it may be able to top global firms like Groupon and LivingSocial in the field.
“LivingSocial needed Ticket Monster to increase the firm value ahead of getting listed and to rush into the Asian market and Ticket Monster also needed LivingSocial for funding and to expand it boundaries overseas,” said Ryu.
He, however, elaborated that the local social commerce industry is projected to be dominated by foreign players, such as LivingSocial and Groupon, like it is the case with the country’s open market that is taken over by Ebay and Auction.
Another industry expert Yun Sang-jin agreed, stating that the market is expected to go through reorganization.
“I’m aware that many of the domestic players, including Coupang, are not performing well in terms of funding and it has been the same with Ticket Monster,” he said. “I don’t exactly know what will happen to Groupon’s merger with other firms, but I’m convinced other social commerce firms will inevitably take part in mergers and acquisitions as well as strategic partnerships.”
Although a major restructuring is projected for the social commerce industry, the market is estimated to grow to be worth 800 billion won, a sharp increase from the 60 billion won last year, according to Yun, who is the head of a firm specializing in social media marketing called Wide Communications.
Industry insiders also added that the participation of globally-recognized players may even create a bigger pie and make the Korean market a more attractive one.
“The Korean market is not a market to ignore in size,” said an industry source. “The market is growing faster than our expectation and I believe the sale of Ticket Monster proves the attractiveness of the market. Investments will continue to take place here.”
By Cho Ji-hyun (email@example.com)