Instead of visiting traditional vendors, consumers buy their mobile phones at the post office, convenience stores, through online shopping sites and even from vending machines. (Image : Yonhap)
SEOUL, Feb.16 (Korea Bizwire) – With the increasing popularity of cheaper mobile phones, there has been a noticeable change in the way that consumers purchase new handsets. Instead of visiting traditional vendors, consumers buy their mobile phones at the post office, convenience stores, through online shopping sites and even from vending machines. While consumers are benefiting from convenient purchasing options, Chinese manufacturers are also seeing big sales increases as a result of the new trend.
According to industry analysts, the number of consumers who purchase their mobile phones online is continuously increasing. From sites directly managed by service providers such as SK’s T World Direct, KT’s Olleh, and LG U+’s U+ Shop, to online shopping sites such as Interpark, Auction, and GMarket, customers are getting new phones without even having to leave the comfort of their home.
For purchases made online, customers receive a larger variety of benefits compared to when they buy their phones at offline vendors. LG U+ offers additional discounts, and other service providers including KT provide their consumers with mobile phone accessories. As a result, young consumers are increasingly taking advantage of these new purchasing options.
The online shopping trend for mobile phones has resulted in increased sales of Chinese smartphones. Sales of Chinese smartphones at GMarket in November and December 2015 jumped 10 times (1,032 percent increase) and 26 times (2,567 percent increase) compared to sales in October. As of January 27, sales were 24 times higher number (2,426 percent increase) compared to October 2015.
Auction’s Chinese smartphone sales in December 2015 also jumped 134 percent compared to July 2015.
Industry officials comment that it is easier for companies to provide larger discounts to customers who purchase mobile phones online due to the lack of distribution costs and rebates paid to offline vendors.
They also add that the improvement of 3D technology and screen resolution provides a visual experience that doesn’t differ much from actually seeing the product in person. This enhanced visual experience, along with same-day delivery service, has led to a rapid increase in online sales.
Post offices are also increasing in prominence as major offline vendors of mobile phones, as their budget phone models have created a craze. After budget phones were first released at post offices in September 2013, the number of subscribers exceeded 100,000 in May 2014, and in December 2015, the number of subscribers exceeded 300,000. With unconventional plans provided at the start of the year, 120,000 budget phones were sold during a period of only a month and half.
Mobile phones are also being sold at home furnishings stores. Customers stood in long lines in front of mobile phone vending machines at Daiso discount stores when word spread that 300 Hongmi 3 phones from Xiaomi would be sold for 99,000 won.
Some budget phone businesses such as Enex Telecom are selling their products at GS25, a Korean convenience store chain.
The diversification is leading to a decrease in the number of mobile phone vendors. According to the Ministry of Science, ICT and Future Planning, there were only 11,623 mobile phone retailers in July 2015, a drop of more than 1,000 compared to the 12,663 recorded in September 2014.
By Francine Jung (francine.jung@kobizmedia.co.kr)
