Chang Ji-eun, a 27-year-old graphic designer, starts her day with a one-hour pilates class at a premium boutique studio in the upscale neighborhood of Cheongdam in southern Seoul and gets healthy homemade-style soup made with "doenjang," or soybean paste, delivered for dinner. She does both of these through applications on her iPhone.
With the use of smartphones growing rapidly, online-to-offline (O2O) startups have sprung up in South Korea in recent years, enabling consumers to use an app or web site to do everything from food delivery to car rides and workout classes.
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(Yonhap) |
As a fitness fanatic who has been taking pilates classes for more than five years, Chang now only has to pay 150,000 won ($130) per month to take fitness classes that range from pilates to cycling through an app called "Mylo."
Mylo, operated by Seoul-based O2O startup company Classtime, is a monthly fitness membership that offers all-day scheduling options for various group exercise classes at more than 500 premium fitness clubs across Seoul and the surrounding area.
"I used to pay a lot more for pilates classes. Now, I just have to pay a flat monthly fee and take classes at different gyms and fitness studios rather than pay full price at one studio," Chang said.
Nearly seven in 10 people in South Korea own a smartphone, making it the country with the fourth-highest smartphone penetration rate in the world, data by Digieco, a research center run by South Korea's mobile carrier KT Corp., showed.
Mylo, the first of its kind established in South Korea, pays studios and fitness centers a set amount of money for each class that is booked through its system. The company, however, refused to give out the details of how the rate is determined.
WithPilates, a luxurious pilates studio in the Cheongdam area, said it has witnessed an influx of new customers following its partnership with the fitness platform last year.
"I would say the biggest advantage is marketing, as the studio can reduce the cost of advertising," said an instructor surnamed Lee.
The studio, however, said it struggles to find a balance between keeping dedicated regular customers who are paying the full price of 370,000 won per month for eight sessions and attracting new customers.
"We usually leave slots for O2O app customers only when classes are not filled with regular customers who sometimes ask why they should keep paying more than four times what the person next to them in the class is paying," Lee said.
Mylo is similar to the one developed by New York-based startup Classmate which has been touted as one of the most promising startups after cab-sharing app Uber and Airbnb, the world's largest room-sharing website.
Mylo, which launched the service in August 2015, said its members topped 26,000 as of December 2016 and forecasts the number to increase, as more women in their 20s and 30s get interested in working out at a relatively reasonable price. The company said that the number of partnered studios will increase to 600.
A number of local startups also began launching fitness O2O platforms, including latecomers TLX Pass, ClassPick and Funpass which offer various monthly, quarterly and unlimited memberships or coupons that can be used for each session.
GuavaPass, a Singapore-based service for finding nearby gyms and fitness centers, also kicked off its service in South Korea in October 2016. The company offers fitness subscription services across Asia and the Middle East.
"More competition is expected, as more startups or big companies will expand their business in fitness subscription services, whereas there are limited studios and fitness clubs willing to join hands with," said a local startup offering a fitness platform on the condition of anonymity.
Woowabrothers Co. is a leading South Korean startup that operates the country's most popular food delivery mobile app, "Baedal Minjok," which means "Delivery Nation" in English.
The app, available both on the Android and iOS operating systems, is currently No. 1 in such services with more than 27 million downloads as of January. First distributed in 2010, the app provides users with services similar to the likes of US counterpart GrubHub Food Delivery & Takeout.
Many people usually order food in South Korea through telephone orders. However, delivery apps have become increasingly popular and now take nearly 15 percent of the total food delivery market which is estimated at around 12 trillion won.
Baedal Minjok is a market leader with more than 50 percent market share, followed by "Yogiyo" and "Baedaltong," which are both owned by Germany-based Delivery Hero.
The app, which processes over 4 million food-delivery orders from 190,000 registered restaurants, kicked off its delivery service for homemade-style side dishes, apparently to meet the increasing demand of people who dine or drink alone.
"It was always difficult to buy the right amount of ingredients for myself as I live alone," said Chang, noting that ordering soup or salad is more cost-efficient.
The company also launched a new service, "Baemin Fresh," which delivers food through refrigerated trucks between 10:00 p.m. and 7:00 a.m. to customers' doors in order to add to their convenience.
"The company aims to meet the needs of a new trend of lone diners and lone drinkers," said Seong Ho-kyeong, a Woowabrother official, adding that the app aims to add more luxurious menus.
Not only have startups, but major tech and Internet companies including e-commerce operators ventured into the O2O beauty business, which is estimated to have a market value of over 7 trillion won.
Kakao Corp., the operator of South Korea's top mobile messenger, rolled out a salon-booking app last year as part of its expansion into various online and offline services on the back of38 million local users.
Users are required to preregister their credit and debit cards and make reservations and payments simply by typing in their passwords. They can make a reservation at over 1,500 hair salons across the country.
Kakao is a latecomer in the sector, as local startup Edge People first launched its hair, nail and skin salon reservation app in 2011. It has over 2,000 shops as partners and offers various services at relatively cheap prices.
Ticket Monster, South Korea's No. 3 e-commerce operator by sales, also sells various deals for hair and nail salons at various locations across the country.
"I only do my hair and nails through these O2O websites and apps, as not only is the service cheap but I can make a reservation easily. Also, I can read other people's reviews before I visit the places," said Kim Min-kyeong, a 34-year-old art curator, said.
In line with the trend, the online-to-offline (O2O) service by Yonhap News Agency, South Korea's leading newswire, plans to add six more startups and two more topics beginning in the middle of February.
Yonhap launched the service last month, allowing readers to connect with everyday activities, including booking nearby restaurants and finding recipes through their smartphones.
The service's name, which is only in Korean, is a combination of a hashtag and the Korean word "heung," which is best described in English as a sense of joy and excitement that keeps people afloat.
Nine startups, including a restaurant information website Siksin, and three topics, such as food and travel, were included in the service.
Starting in the middle of this month, three startups, in the fields of travel, fashion and interior design, will join the service. The number of topics will rise to five.
An official at the online-to-offline service said the second-stage launch of the service comes as it is increasingly attracting readers' attention.
"For a win-win cooperation between media and O2O startups, we will continue to search for smaller O2O startups that are struggling to secure a point of contact with customers," the official said.
Ahn Byeong-ik, head of Siksin, said the O2O service by Yonhap is a "positive" for the company that allows it to woo customers by offering a new way to connect with customers beyond Internet portals.
Industry estimates show that the domestic market for O2O services will jump to 300 trillion won ($261.5 billion) by the end of this year from 15 trillion won last year. (Yonhap)
