Growing "subscription economy" services in Korea
- 5 years ago
Subscription economy refers to a business model in which companies provide regular products and services to consumers that subscribe and make recurring payments, such as newspaper subscription services and Netflix.
And this business model is growing in popularity across various products and retail services in South Korea.
Kim Hyesung reports.
31-year-old Woo Chang-gyun gets sterilized, fresh blankets delivered to his house every month at a time that suits him.
It includes a mattress cover, blanket and two pillow covers... all for roughly 25 U.S. dollars a month.
"It takes on average three-to-four hours to clean and dry the blankets at laundromats. But I can get clean blankets delivered with a click of an app. It's convenient and saves me time."
The subscription economy is not a new concept, it's an extension of monthly newspaper subscriptions, but the range of products and retail services online has been growing rapidly, from Netflix streaming services and e-books to cars.
Hyundai Motor Company has started one in which customers can get three kinds of different cars, including sedans and SUVs for 600 dollars a month.
Nike also launched a subscription services for kids aged two to ten that includes four pairs of shoes a year.
Sock subscription boxes are also on offer, where customers can get three pairs of socks per month.
"Most of our customers are in their 30s and 40s. They can get it delivered easily and regularly. It's also about 30 percent cheaper than buying one pair at a time."
The global market for the subscription economy is expected to grow from 420 billion dollars in 2015 to 530 billion by 2020.
"There are many online, mobile platforms. The increase in the number of one person households has led to growing demand for regular, convenient delivery services. Young people these days also emphasize experience, and prefer to try out more different products before buying. "
There are still legal issues that companies need to sort out, like who is responsible for insurance payments when a product is damaged.
But regardless, for companies, the subscription economy helps them find a niche market as consumer behavior shifts from offline to online, and also estimate product demand and plan their supply accordingly.
That means subscription economy services are set to continue evolving and growing.
Kim Hyesung, Arirang News.
And this business model is growing in popularity across various products and retail services in South Korea.
Kim Hyesung reports.
31-year-old Woo Chang-gyun gets sterilized, fresh blankets delivered to his house every month at a time that suits him.
It includes a mattress cover, blanket and two pillow covers... all for roughly 25 U.S. dollars a month.
"It takes on average three-to-four hours to clean and dry the blankets at laundromats. But I can get clean blankets delivered with a click of an app. It's convenient and saves me time."
The subscription economy is not a new concept, it's an extension of monthly newspaper subscriptions, but the range of products and retail services online has been growing rapidly, from Netflix streaming services and e-books to cars.
Hyundai Motor Company has started one in which customers can get three kinds of different cars, including sedans and SUVs for 600 dollars a month.
Nike also launched a subscription services for kids aged two to ten that includes four pairs of shoes a year.
Sock subscription boxes are also on offer, where customers can get three pairs of socks per month.
"Most of our customers are in their 30s and 40s. They can get it delivered easily and regularly. It's also about 30 percent cheaper than buying one pair at a time."
The global market for the subscription economy is expected to grow from 420 billion dollars in 2015 to 530 billion by 2020.
"There are many online, mobile platforms. The increase in the number of one person households has led to growing demand for regular, convenient delivery services. Young people these days also emphasize experience, and prefer to try out more different products before buying. "
There are still legal issues that companies need to sort out, like who is responsible for insurance payments when a product is damaged.
But regardless, for companies, the subscription economy helps them find a niche market as consumer behavior shifts from offline to online, and also estimate product demand and plan their supply accordingly.
That means subscription economy services are set to continue evolving and growing.
Kim Hyesung, Arirang News.