[이커머스 혁신가들] ② The MZ generation flocked to the content instead of the “Look at it” product.

Enter 2021.03.16 06:00

Today’s House·Musinsa·Style Share·Cookcat
Building a’fandom’ as a community… Rapid growth into commerce based on trust

Lee Yoon-ah (25), a beginner who has been in her 1st year of independence, visits other people’s homes with the’House of the Day’ application (app) whenever she has time. “As I lived alone, my interest in decorating the house grew. Not long ago, while looking at the interior of another house, I bought curtains and bedding that felt like spring.”

Kim Seung-ho, a 30-year-old office worker, has fallen into the fun of cooking these days. “After a long time at home due to a coronavirus infection (Corona 19), I often watch the YouTube’Cookcat’ channel to cook. I don’t have a good skill in cooking, but I bought a milk kit and made it, and it made it look good.”

E-commerce companies that combine content and commerce are emerging. Interior props platform with an annual transaction value of 1 trillion won, Today’s House, fashion shopping mall Musinsa and Style Share, which also stores major brands, and Cookat, which shares recipes (recipes) on 70 social media (SNS) channels at home and abroad, are representative. They have secured their own territory in the fierce e-commerce market with a strategy that put content instead of products, targeting the MZ generation (millennials + generation Z, born 1980-2004) who grew up in a digital environment since childhood.

Point 1.’Fans’ gathered as they put the content ahead

What they have in common is that they started out as a community and jumped into commerce. Musinsa started from an online club called’The place where there are so many shoes pictures’ created by CEO Man-ho Jo in 2001 when he was a senior in high school. After securing members by sharing street fashion and dressing methods, limited edition products, and brand stories, commerce began in earnest in 2009, eight years later. The transaction amount from 1990 billion won in 2016 to 900 billion won in 2019 and 140 billion won last year (estimated value) grew rapidly.

StyleShare started as a fashion information service by CEO Yoon Ja-young, who was a 4th grader at university in 2011, and introduced the commerce function in 2015. Like a social network service (SNS), users can directly upload photos of their clothes and share product information, and more than 50,000 posts are registered every day. Currently, the number of members is 7.4 million, with over 70% being 15-25 years old. In 2019, the transaction amount exceeded 100 billion won.

In 2018, it secured a growth engine by acquiring 29CM, an online editing shop targeting 25 to 45 years old. If StyleShare is a shopping mall that incorporates an SNS platform, 29CM is a shopping mall where editors share product information and propose like a magazine. Last year, the combined transaction amount of Style Share and 29CM was 300 billion won.

Today’s House is a content commerce that has grown with the response of home decorating lovers. When users directly upload their space, furniture, and props information in the’Housewarming’ category, other users can check it and even make a purchase. The social platform soon became an online exhibition hall. To date, more than 10 million photos have been registered, and the number of members exceeds 10 million.

An official at Bucket Place, the operator of today’s house, explained, “At first, experts registered content, but the content uploaded directly by consumers gained more sympathy and took shape as it is now.” Today’s House has surpassed 1 trillion won (as of October) as interior demand increased due to Corona 19 last year. In November of last year, it attracted series C investment and achieved a cumulative investment of 88 billion won.

Point 2. Let’s buy it while watching… Combined’content + shopping’

The trust gained through the community had a positive effect on the commerce business as well. Musinsa shows real-time sales rankings by category, and the impact of this ranking on young people is so great that it is said, “If you enter the Musinsa ranking, it becomes fashionable.” The company produces 17,000 product reviews that are registered every day as content, introduces them to the magazine, and gives awards to those who have attracted attention. With more than 100 employees dedicated to content, it supports shopping by producing more than 100,000 contents per year.

Styleshare also encourages consumers to shop based on product reviews written by themselves. The purchase conversion rate is 19%, which is high compared to the average purchase conversion rate of online shopping malls of 1-5%. In 2019, the convenience store payment system was introduced, considering that customers in their teens to early 20s, the main customer base, prefer to deposit without a bankbook instead of paying by credit card. It is a method of printing a barcode at a convenience store and paying with cash.

Cookat, which combines cooking video and commerce, is also attracting attention. This company, which started with the SNS channel’What to eat today?’ in 2013, is currently posting cooking content on the video channel’Cookcat Recipe’ and selling related products at’Cookcat Market,’ a shopping mall specializing in home convenience food. It puts in the lead in a small packaged product that can be eaten by one or two people at an affordable price. Sales from 270 million won in 2015 rose to 39 billion won last year.

“The company’s strength is that it has established a virtuous cycle structure in which interest in content is connected to the market,” said Lee Moon-joo, CEO of Cookat, saying, “It was effective to directly communicate with consumers through SNS and to quickly reflect their needs and plan products.” did.

Point 3. Understand the fan’s heart, publish PB and collaborative products, and enter offline

Companies agree that the essence of content commerce is’product power’. They are differentiated from other shopping malls by releasing their own brand (PB). Based on ideas from subscribers, Cookat introduces 10 PB products every month at Cookat Market. Typical examples are glutinous rice cake with strawberries and sweet potatoes, Daebangeojang, and Komakjang. 66% of all products are PB products. In May of last year, the store opened at Starfield COEX Mall in Samseong-dong, Seoul, with an average monthly sales of 180 million won. CEO Lee Moon-joo emphasized that “content commerce also prioritizes product quality.”

Style Share has also been operating PB’Earth’ from 2019 under the theme of “fashion created with users.” It makes clothes reflecting the opinions of consumers, and uses consumers as well as product models. Earth’s return rate is 0.9%, lower than the average return rate (10-20%) of internet shopping malls. An official from StyleShare said, “It seems that the satisfaction level is high because you can see the realistic fit worn by the general public.”

The company’s own brand,’Musinsa Standard,’ launched in 2017, also surpassed 110 billion won in sales last year. The company actively conducts collaborative marketing to target the MZ generation. HITEJINRO (000080)Representatives are the’Chamisul Backpack’, which collected topics in collaboration with the company, and the’Pengsoo T-shirt,’ which collected 10,000 purchasers in collaboration with Spao. Musinsa opened’Musinsa Terrace’ at AK& at Hongik University Station in Seoul last year, and plans to expand offline stores of Musinsa Standard this year.

Point 4. To succeed in content commerce, you must keep’trust’

With the recent spread of non-face-to-face consumption, commerce incorporating content is being actively conducted in the distribution industry. It sells products through influencers (SNS celebrities) that have an influence on the public, or combines entertainment and dramas into shopping like live commerce (Rabang).

However, as communication has built trust with customers, actions against this can be fatal to growth. Musinsa recently received criticism from customers by suspending the use of the community for 60 days to a customer who pointed out that it was’gender discrimination’ over the fact that only female customers were given discount coupons. Representative Man-ho Jo has taken steps to take care of himself by posting an apology, but the customer’s anger does not easily subside.

Along with this, it became controversial when it was known that it was informed that it would stop trading if it entered a competitive fashion platform. This can be regarded as an economic restrictive act among the’unfair trade acts’ stipulated in Article 23 of the Fair Trade Act. An official in the fashion industry pointed out, “Since starting from a community, the corporate culture is closed and there seems to be a lack of understanding of win-win growth.”

“Musinsa, Today’s House, etc. have built a foundation for success by building a fandom for a long time,” said Seung-yoon Lee, a professor of business administration at Konkuk University. “It is necessary to have CS (customer management) responsiveness so that we can quickly follow-up when a problem occurs,” he said.