Growing consumer needs are now shifting toward people purchasing products they cannot afford to miss, such as via flash deals or limited sales.
Ticket Monster, or TMON, a first-generation e-commerce company established in 2010, is one of those leading the e-commerce scene in Korea.
TMON’s Monster Deal, which sells a limited amount of top-quality products at discount prices, garners some half a million purchases in several hours on daily basis.
But for Lee Jae-hoo, the new TMON CEO whose duties formally began just weeks ago, TMON’s goal does not stop it from posting record-high numbers of customer purchases.
|TMON CEO Lee Jae-hoo (TMON)|
“E-commerce companies are often asked if they want to become the next Amazon. But I can say we are rather similar to the Alibaba model, which creates buzz among customers with its flash deals and promotions,” Lee said in an interview with The Korea Herald at his office in Samseong-dong, Seoul.
“It is because Alibaba’s role is more like a contents platform. Korean shoppers go on mobile shopping apps when they want to buy a specific product. But we want to make them open the TMON app every day and find daily deal promotions that can satisfy their overall shopping life,” Lee said.
The 38-year-old CEO formerly led the TMON store team and created flash deal promotions like Monster Deal. The idea led to a 25 percent increase in TMON users and 15 percent growth in average monthly sales since the launch of Monster Deal in April.
Lee said he wants TMON to become a place for “online malling.”
“People go ‘malling’ to places like Starfield not necessarily because they need to buy something. They just go there for fun because there are so many things, to look around. The online retail trend is heading that way as well. More and more consumers are starting to scan through products on apps although they have no concrete intention of buying anything. When persuaded, they purchase the product.”
To attract online shoppers’ attention and lead such attention to actual purchases, TMON launched a media commerce service called “TV On Live” in March last year. The real-time show airs on the TMON app. Customers can watch and interact with the TMON merchandiser about the product. The show’s format is very similar to those of home shopping channels.
“Our ultimate rival is home shopping companies. You do not necessarily watch the home shopping channel because you need to buy the item. It is rather like, you purchase it because you are persuaded,” he said.
“It is important to give customers expectations. We need to give them reasons to constantly open the TMON app and find various and attractive deals. We want customers to ask themselves, which product will be out for a limited-price deal today on TMON?”
Last year, TMON made a 35 percent on-year increase in sales, recording 356 billion won ($314 million). Its amount of accumulated operating losses fell by 24 percent.
And behind such performances is TMON’s Supermart, a service where customers can order fresh food and receive it the next day at a designated time of the customer’s choice.
Over 14,000 categories of daily necessities, frozen food and fresh food products are stored at the company’s distribution center. Only large-scale retailers like E-mart and Homeplus’ online retail outlets have been operated in that way.
By reducing costs for operating offline labor, TMON's Supermart sells products at up to 60 percent discounted prices, which has led to explosive numbers of customer since. Over the past three years, at least 30 million customers have used Supermart. As of the first quarter this year, its sales had gone up by 80 percent on-year.
As for delivery, all Supermart products are currently delivered via Lotte Logistics.
For the need for swiftness in getting fresh produce delivered, the operator offers reserved delivery service, through which a customer can place an order and reserve for time and date of preferred delivery within the specific time window set by the company.
In a market being inundated with competition for faster delivery -- namely automatic overnight arrivals upon purchase -- Lee appeared unfazed, underscoring that punctuality combined with fast-enough delivery can suffice.
“Korea has very developed distribution centers and delivery service due to its high population density. Fast delivery cannot ‘wow’ customers anymore,” he said.
“Most certainly, we would like to offer customers certainty in what they purchase and receive. Deliveries of Supermart products works on a consignment basis at Lotte Logistics, which has an expertise in stable delivery service.”
As for within the company, the new CEO vowed to create a winning culture among employees at TMON.
Based on his prior experience in business planning and sales, Lee said he would work to satisfy customers’ values from a systemwide point of view.
“I would like to empower our employees with a winning culture, set the stage for them to reach and go beyond one’s limit. It will be a powerful spur for our company to plan new deals and promotions and offer our customers’ with the best shopping experience,” Lee said.
According to Lee, most of all, TMON wants to provide “valuable spending.”
“Our service is not pushing customers to overspend. The reason TMON is loved by so many is because one can buy small things at good prices within the boundaries of affordability. I wish more customers could feel that happiness when purchasing at TMON,” said Lee.
By Kim Da-sol (email@example.com)