Although the continued spread of coronavirus has disrupted many industries in South Korea, those related to “untact” services -- referring to no-contact interaction, which have become an integral part of life -- have fared well and are expected to grow even further, according to industry sources Wednesday.
E-commerce companies appear to be the biggest beneficiaries of the prolonged pandemic.
Online shopping transactions in Korea amounted to 11.9 trillion won ($9.7 billion) in February, up 24.5 percent from a year earlier, the largest increase in 16 months, according to Statistics Korea.
Coupang has been doing particularly well, posting a 70 percent on-year growth of its monthly transactions at 1.63 trillion won in February.
Kyobo Securities said the local e-commerce market is expected to maintain a high growth rate of 25 to 35 percent on-year until at least the second quarter. It cited a surge in online consumption in the past cases of H1N1 --- or swine flu -- pandemic of 2009 and the Middle East respiratory syndrome in 2015.
Payment gateway companies are also benefiting from the surge in online transactions.
A payment gateway technology is used by merchants -- both brick-and-mortar retail stores and online stores -- to accept debit or credit card purchases from customers.
According to the Bank of Korea, the average daily use of simple payment services came to 6.02 million last year, up 56.6 percent from a year earlier.
Simple payment services refer to any electronic payment service that allows users to make payments on and off-line simply and securely.
The recent spread of COVID-19 has led to a surge in the number of simple payment users between February and March, according to the fintech industry.
Korea’s leading payment service providers include NHN Korea Cyber Payment, NICE Information & Telecommunication and KG Inicis.
NHN Korea Cyber Payment’s transactions in March surpassed 2 trillion won, the highest ever.
Services related to teleworking have also fared well as many companies choose work from home to follow social distancing rules.
Hyosung ITX introduced its new business, “smart contact center solution,” in December last year, which supports the telework of call centers. The service was currently supplied to the Korea Centers for Disease Control and Prevention’s 1339 call center.
Posco ICT, which has strengths in smart factories, cloud and security, is also expected to see an increase in demand for solutions as demand for non-face-to-face and remote areas increases in the wake of COVID-19, according to SK Securities.
Even if the pandemic calms down, the emerging trend in online services will not quickly die down as no-contact services become part of our lives due to the prolonged coronavirus outbreak, according to industry watchers.
“The prolonged coronavirus is bringing many changes to our lives and businesses. Among them, there is a temporary phenomenon, but in many cases, it is expected to form a new service trend in the economy and society,” said Yoo Seung-wha, an honorary professor at Ajou University.
For example, the use of services, such as telework, telemedicine, remote video conferencing, online education, online company listing and online live marketing, is rapidly increasing, he noted.
“In the long run, network upgrades and 5G investments will inevitably accelerate worldwide, as once-increased data usage tends not to shrink well. Cloud-based service platforms that can effectively deliver these new trends will also be the biggest real beneficiaries,” Yoo said.
By Shin Ji-hye (firstname.lastname@example.org)