South Korea: M-commerce grows, Naver shares rebound, Pantech in trouble
In South Korea, mobile shoppers exceed 20 million, Naver stock bounces back after drop, and mobile phone maker Pantech to undergo debt workoutBy beSUCCESS 04 Mar, 2014
A recent survey has shown that Koreans using mobile shopping applications has grown such that there are now more mobile shoppers than there are KakaoGame players in Korea.
According to Rankey who conducted the survey, the number of shopping app users totaled 21.63M, as of January 2014. This figure is 2.7M higher than the number of KakaoGame Play users and represents a significant shift, considering that there were about 7M more KakaoGame players than mobile shoppers just a year ago.
60,000 Android smartphone users were surveyed for the report, to analyze the number of net number of users for both shopping apps and KakaoGame.
A Rankey official said, “This survey showed that the user base of shopping apps has expanded sharply over the past year.”
As social commerce sites continue to gain popularity with their mobile traffic exceeding those of open markets, mobile competition is increasing in the online shopping industry in Korea, but also represents that there are still great opportunities to be had for newcomers in the space.
In its previous e-commerce report, Rankey revealed that WeMakePrice was ranked No. 1 in terms of growth rate among mobile apps, with the number of shopping–related apps which were included among the top-100 apps, estimated at 15.
Naver shares bounce back after a worrying drop
Shares of Naver Corp., South Korea’s top internet portal, were trading near a record high at the end of last week as the WhatsApp buyout by Facebook Inc. fueled speculation that its free chat messaging service Line would find a strategic partner through a stake buyout. This news comes a week after share nose-dived the day Facebook announced its unprecedented buyout of WhatsApp for $19Bn.
Shares of Naver were trading at $761.5, up 2.4% from the previous session’s close. At one point during the day’s trading, they even touched a record high.
Pantech set to go under further debt workout program
Pantech Co., South Korea’s third largest mobile handset maker, is expected to be placed under a debt workout program soon as it struggles with poor cash flows amid slumping sales, industry sources claimed last week. Pantech has been struggling against domestic giants Samsung and LG for over a year. Pantech has reached out to its creditor banks, requesting to be put under a debt-restructuring program that will, the company hopes, allow it to freeze or delay the repayment of its debt.
“Through this (debt) workout, we expect to improve Pantech’s financial status and secure a stable flow of liquidity,” the company said in a statement.
The most recent debt workout program comes some two years after it was released in December 2011 from its five-year debt workout program.
Pantech has been trying hard to reel in its expenditure. Last year the company culled 30% of its staff to reduce costs and also decided to pull back from overseas sales in the hope that it could consolidate in its home country. It remains to be seen if the company will achieve this.