Shinsegae to launch SSG.com open market service

By Kim Jae-heun

Shinsegae Group said it will launch an open market service ― for individual dealers to sell outside products ― on its e-commerce platform, SSG.com, during the first half of this year. This move is expected to make competition among local online shopping platforms fiercer than ever.

“Test operations for our open market service will begin on April 20. We have decided to introduce the service in order to secure more varied products and boost our platform's competitiveness,” an SSG.com official said.

SSG.com has been selling products of Shinsegae's other retail affiliates, such as E-mart and Shinsegae Department Store. But after the official launch of the open market service in June, it will let individual dealers sell their products online, similar to on Naver and 11STREET. Its main rival, Lotte Shopping, launched open market services in April 2020 on its combined online shopping platform, Lotte ON.

As part of the plan, SSG.com on Wednesday established a seller's page called SSG Partners, where small and medium-sized dealers can register, promote and manage their products.

The e-commerce firm also lowered its standard for sellers to start businesses on the platform, by simplifying the dealer registration process online. Anyone who can provide their ID through a mobile phone can open a business on SSG.com's open market.

However, it decided not to allow open market sellers to sell grocery items, luxury goods and certain fashion brands, as they are in direct competition with Shinsegae Group's retail units.

SSG.com's decision not to allow open market sellers to sell groceries is also based on the fact that those sellers have to send their products to customers on their own with a delivery driver, and fresh food products can lose their freshness if delivered late.

For luxury goods, SSG.com could become involved in controversies for selling counterfeit brands, as Coupang has.

SSG.com currently sells about 10 million products kept in stock, and this inventory is expected to grow fivefold when it starts its open market service. This growth will help Shinsegae's online business to increase its market share, which is now only 2.4 percent.

SSG.com's gross merchandise value stood at 3.9 trillion won last year, which is far below Naver Shopping's 26.8 trillion won and Coupang's 20.9 trillion won. The number is nearly half of Lotte Shopping's 7.6 trillion won as well.

Shinsegae believes offering an open market service is imperative for it to gain competitiveness against the front-runners in Korea's e-commerce scene.

“We will strengthen our cooperative system between our online and offline business while forming strategic partnerships with outside companies,” E-mart CEO Kang Heui-seok said during a general meeting of stockholders on Wednesday.

SSG.com will give a 50 percent discount to customers ordering fresh food from Shinsegae's other retail affiliates overnight in Seoul and the capital area between March 25 and 31. The company said it will offer the same promotion every second and last week of the month on a regular basis.

However, the discount promotion will only apply to two items selected by SSG.com.