SEOUL, Feb. 8 (Korea Bizwire) — Subscription businesses first arose in the United States in the early 2010s after the global financial crisis.
The subscription economy, referring to business models though which specific goods or services are provided on a regular basis for a monthly payment, is growing rapidly, more than tripling over the past five years.
South Korea has also jumped into the industry with more than 300 start-ups providing goods and services based on subscriptions.
Recently, the subscription economy has expanded to culture. Competition is brisk in the e-book industry with the introduction of ‘unlimited reading’ services for a fixed monthly payment.
‘Millie’s Library’ introduced unlimited e-books for a monthly payment of 9,900 won (US$10). More than 700,000 people have downloaded the application, proving its popularity.
When subscribing to the service, one is offered a curation service and customized book selections.
Other e-book companies are following in the footsteps of ‘Millie’s Library’ as the venture is a new attempt to attract interest and attention from users in the South Korean e-book market.
The auto industry has also introduced monthly subscription services. In January, Hyundai Motor Co. launched a service that allows users to change their car regularly.
It has only been a month since the service was released, but the response has been very positive with a flood of inquiries from customers.
There is also a growing trend in the cosmetics industry. AmorePacific Corp. has launched a service that ships cosmetics to user’s house every month based on skin type.
It is attracting a lot of users as it has a promotional effect through word-of-mouth of those who have used the service.
While other industries such as flower delivery, beer catering and clothes delivery all jumped into the subscription economy, it is now important for companies to provide good service to users.
Because the subscription model provides goods and services without customers involved in the decision making process, it is important for companies to cater to the needs of users, and provide quality goods and services if they wish to attract regular customers.
D. M. Park (email@example.com)