You Still Do Shopping Outside? I Do It on Subscription Commerce Sites

SEOUL, Korea, Oct 30 (Korea Bizwire) – Most women may have had an experience of regretting their decision to buy an expensive make-up product after a few days of use. In 2011 alone, Korea’s women spent 10.8 trillion won on cosmetics, up 9.6 percent from the previous year. Still not many of them use a cosmetic item until it runs out. They tend to stow it in the drawer after using it only a few times.

In order to address this problem, there has emerged a new service called “subscription commerce.” This does away with the need for people to visit stores in person and instead allows them to get deliveries in regular intervals. Subscription commerce is an excellent alternative to in-person shopping for busy people who have little time to go out. At the cost of 10,000 to 20,000 won a month, subscribers can receive a package consisting of 5 to 6 small samples and items. This is typically 60-80 percent lower than the price if purchased separately.

Since the subscription model was introduced in Korea in 2011, the number of companies engaged in the business has increased to 50 and is expected to rise to 100 by the year’s end. The current 30-billion-won subscription commerce is also forecast to grow to 60 billion won by the end of this year.

The first subscription commerce company that landed in Korea was GlossyBox of Germany in June 2011. After the entrance of GlossyBox turned out successful, other operators rushed in to the market including Memebox, the company specializing in beauty goods subscription commerce. The leading category in the subscription commerce market is far and away the beauty area.

For example, Memebox sends a package with value of 80,000 to 100,000 won a month at the monthly membership fee of 16,500 won. The company gets free samples from cosmetic companies for promotional purposes. There are currently 350 companies supplying free sample to Memebox. In return, Memebox provides advertising for these companies, in the form of infomercials on cable TV channels and exposure to social networking sites such as Facebook and Twitter. In addition, the company measures the effectiveness of their advertising by conducting surveys on their customers and compiles these results in reports. Last year, Memebox posted 1-billion-won sales revenue in its first year of operation. Its sales revenue rose to 1.5 billion won for the first six months of this year.

The business of subscription commerce isn’t restricted to beauty products. NS Home Shopping recently launched a regular delivery service for organic food items directly from Jeju Island. Delivery intervals can be set between one week and four weeks and customers get delivery of foods worth 63,000 won for a 50,000-won-a-month subscription fee (based on delivery frequency of once a week).

HeyBread is a service delivering fresh bread and pastries to customers who place Internet orders a day before. It has made special contracts with several Seoul-based boulangeries and patisseries with good reputations for their baked goods. Anyone who makes orders between 11 am and 11 am next day will be able to receive her sweet-smelling bread the following morning.

STCO, the store selling dress shirts and ties for men, has launched a subscription-based service delivering up to 12 shirts a year at the cost of 100,000 won. Unlike any other subscription models that do not allow subscribers to pick and choose what they want, STCO displays all its shirt types available for delivery and tells its customers select styles of their choice.

Another clothier Mankit purports to be the helper for those busy men who have little time for shopping. The company provides subscription commerce service in which it delivers men’s essential items such as Calvin Klein panties, Snoozy socks, and cotton T-shirts at 22,000 or 39,600 won a month, depending on the subscriber’s preference. In another package, it offers L’Oreal skin lotion and other men’s cosmetic items at the same monthly subscription prices.

Subscription commerce is popular among moms who are picky about quality while sensitive to price. For pregnant women or those preparing for pregnancy, Mamibox sends out different types of items in ten installments including underwear for pregnant women, books for prenatal education, and nursing pads. Another subscription commerce operator “Bebe & Co.” is well received by moms as it delivers baby goods such as baby bottles, organic baby foods, and formulas.

Pets also need a steady supply of feed and other items as much as human babies. A new subscription commerce company “Petsbe” was launched in February this year with a mission to provide quality feed for pet animals as there is no legal requirement as of yet for animal feed makers to indicate country of origin. At the price of 34,900 won a month, the company sends out a package with five to six items in it including food, snacks, toys, and other pet items. It also provides recommendations on a best mix of feed based on pet information supplied by the user.

If you are sick and tired of going out for shopping, using a variety of subscription commerce services may be a truly convenient alternative to stock up your pantry and closet, with a lot of cost saving as an added benefit.

Marketing (Follow Us @marketingnews_Korea)