INTERVIEW Cafe24 eyes global expansion
Cafe24 CEO Lee Jae-suk speaks during an interview with The Korea Times at the firm's office in Seoul, Monday. / Courtesy of Cafe24
Online shopping mall platform provider first targets Japan, Southeast Asia
By Jun Ji-hye
Online shopping platform provider Cafe24 is setting its eyes on the Japanese and Southeast Asian markets as the first step toward becoming a global player in the e-commerce sector, according to the head of the company.
Starting in Japan and extending to Vietnam this year, the firm will continue to make inroads into other countries with its “one-stop” service for e-commerce businesses, Cafe24 CEO Lee Jae-suk said.
“Our focus has been to help online sellers in Korea do business in global markets,” Lee said in a recent interview with The Korea Times. “Starting last year, Cafe24's online store-building system has expanded to help sellers in Japan go global. Our next target is Vietnam. We will continue to expand our reach to global markets until anyone in the world can turn their creativity into a successful global business through Cafe24.”
Cafe24 offers one-stop services for those who want to run e-commerce businesses. / Courtesy of Cafe24
Established in 1999, Cafe24 offers a one-stop service complete with its online shopping store building system, advertising and marketing, so that anyone can conduct online business in the global market.
The service of Cafe24 has been considered distinguished as it offers everything an online business needs through a single platform.
While Amazon, eBay and other e-commerce companies focus their business around the consumer experience, Cafe24 places online sellers and businesses at the heart of its services.
Cafe24 Japan was officially launched last October and has been well-received, Lee said.
TSI, a Japanese company posting more than 1 trillion won ($847 million) in annual sales, and Kumamoto Prefecture have already joined the Cafe24 platform along with many others.
“Japan's e-commerce market is more than twice the size of Korea's yet not as mature,” Lee said, noting that demand in that country for platforms needed to build online brand stores like Korea's Style Nanda is growing.
“Small- and medium-sized enterprises in Japan are struggling to secure online sales channels despite producing merchandise with excellent craftsmanship and distinction,” he said. “Since Japan's domestic market is not as robust as it used to be, merchants are turning to overseas markets. Currently, there is no company in Japan like Cafe24 that offers a one-stop service for e-commerce businesses. This prompted our decision to launch in Japan.”
Lee said the firm's primary goal for the moment is to successfully take root in Japan and expand its presence, and then expand its reach to Southeast Asia.
“We are planning to officially launch in Vietnam within this year. We plan for that market to be a foothold for our business in the Southeast Asian region,” he said. “In some ways, Southeast Asia shares a similar culture with Korea and its e-commerce market is growing rapidly. Starting in Japan and extending on to Vietnam, we will continue to establish our role as an e-commerce trading company in world markets.”
The CEO said the e-commerce industry consists of countless businesses that provide payment, logistics, marketing and sales channels, noting that his firm provides e-commerce businesses with easy connections to related service providers.
“Our competitive advantage stems from a strong network of over 100 global partners including Facebook, Google, Amazon, Rakuten, Alibaba, PayPal and SoftBank,” he said.
The Korean company also operates its own e-commerce app market, Cafe24 App Store, and online store theme shop, Cafe24 Design Center.
In Cafe24 App Store, apps developed by Cafe24 and third-party developers are sold to help online sellers do business. Cafe24 Design Center offers a venue for third-party design agencies to sell various designs for online shopping malls.
“The two stores encourage related experts and online sellers to participate actively in the industry, leading to a robust e-commerce ecosystem,” Lee said.
The company has also enhanced technical support for e-commerce sellers, allowing them to utilize the firm's artificial intelligence (AI) and big data functions to increase their operating efficiency.
These functions help minimize repetitive tasks that occur when building an online store, operating a business and doing brand marketing. Thus, sellers can focus on what matters the most ― their merchandise.
“Sellers can use our functions to increase sales and drive business growth,” Lee said. “These include customized product recommendations based on user preferences, advanced search filters that make it easier to search for specific products and AI-executed server distribution in times of heavy traffic.”
In a bid to help its clients do global business more easily, Cafe24 allows them to build their online stores in various languages including English, Chinese, Japanese, Spanish and Portuguese for free.
The firm has established eight overseas subsidiaries in Taiwan, China, the United States, Japan and the Philippines, providing advanced localization services.
“We support customer services in local languages as well as online marketplace listing, advertising and marketing services,” Lee said. “This helps sellers offer their customers a seamless shopping experience.”
The company has also formed various partnerships with over 100 e-commerce service providers, including online marketplaces Amazon, Alibaba and Rakuten; payment providers PayPal, Alipay and SoftBank; and logistics companies EMS, FedEx and Sagawa.
Cafe24 has formed partnerships with over 100 e-commerce service providers, offering its clients easy connections to related services. / Courtesy of Cafe24
Last month, the firm signed a business agreement with TikTok, a video-sharing platform that is quickly amassing global popularity.
“Cafe24 and TikTok's marketing partnership has opened doors for our online stores to maximize their marketing efforts on a global scale,” Lee said. “Cafe24 will continue to build partnerships with global platforms to spearhead new opportunities that will push e-commerce stores' global business in the direction of success.”
No problem in growth
Cafe24 has recently suffered from a near-40-percent fall in its stock price after it announced earnings for the January-March period that were significantly below the market consensus.
The company explained there was a temporary increase in expenses during the first quarter due to mergers and acquisitions.
Lee stressed there has been no problem in the business growth of his company.
“We has informed investors that we are expected to grow 30 percent this year,” he said.
Commenting on the entry of other competitors including NHN, Lee said, “That means the market continues to grow, thus I think it is a good signal.”
But he stressed that his firm will continue to maintain its dominant position in the market.