Subscription Commerce: A New Sensation in Korea

In 2011, US company Birchbox shipped boxes of sample-size beauty products to more than 400,000 female and male monthly subscribers around the world. A new form of e-commerce called “subscription commerce,” Birchbox was introduced in South Korea as the first of its kind. Since then, over 100 Korean companies have started similar services, making subscription commerce the new hot trend of 2013.

A time-saving personal shopper

Subscription commerce is gaining popularity in South Korea because customers don’t need to spend time shopping and researching which products to buy. Subscribers simply pay a fixed monthly fee for a specialist to handpick products and deliver them directly to the customer’s home. It’s a simple solution in an age where we are bombarded with information on what to spend our money on.

For a successful subscription commerce service, it is important to offer carefully selected, high quality goods that exceed customers’ expectations. This strengthens the customer relationship, builds trust, and generates brand loyalty. Furthermore, companies can expect an increase in subscriptions based on word-of-mouth marketing.

This model is especially helpful for startups because they have the chance to connect to customers directly and understand their needs. Here are a few examples of popular subscription sites in South Korea.

1) Memebox – Cosmetics for Girls

Memebox is the number one beauty box subscription service in Korea. It has 110,000 monthly users, with 200,000 items sold. At 16,500 won ($16.50) per month, merchandisers recommend 5-6 of the top beauty products, and offer delivery service to customer homes.

2) A Glossy Wedding Box for the Bride-to-Be

Wedding box is filled with must have items for the bride-to-be. The items that are selected include various brands of products, coupons, samples, wedding trend magazines, wedding guides and wedding diaries.

3) Shirts Magazine for Young Professionals

Shirts Magazine is the world’s first subscription service of shirts and ties. At 100,000 won ($100) per year, the customer can select a maximum of 12 shirts and ties that are delivered directly to them. It’s also a good example of how subscription commerce is popular with men as well as women.

4) Ten Box for Women and Infants

Ten Box is the world’s first service for pregnant women and babies. During pregnancy, Ten Box is delivered to the customer’s house with the essential information and necessary items dependent on the duration of pregnancy.

5) Pet Box for Man’s Best Friend

Depending on your animal companion’s preference, Pet Box includes toys, food and a check list for your pet’s health. It is automatically delivered on a date of your choosing.

What’s the outlook in South Korea?

Revenue from South Korea’s e-commerce market grew 16% last year to 999 trillion won ($895 billion), more than four times China’s $190 billion in 2012. The truth is, traditional e-commerce is getting quite boring, and unique e-commerce models like subscription commerce have huge growth potential in the South Korean market. Building a relationship on trust is what enhances a company’s competitiveness in South Korea’s e-commerce market, and innovation is the differentiating factor.

Photo by: Kiyoha

Written by: Suzie Son