"Digital Economy Accelerated by COVID-19: O2O Service Transaction Volume Grew 30% Last Year"

[Asia Economy Reporter Koo Eun-mo] As demand for non-face-to-face services increased due to COVID-19 and the digital economy accelerated, the transaction amount of domestic online-to-offline (O2O) services grew by 30% last year.

The Ministry of Science and ICT announced the results of the "2020 O2O Service Industry Survey" on the 8th, which investigated sales, workforce status, and platform transaction scale of O2O services.

O2O services are services that match suppliers and users in real-time anytime and anywhere through mobile apps for ordering food, calling taxis or rental cars, booking accommodations and leisure activities, signing real estate contracts, requesting housekeeping help, etc. Representative examples include Baedal Minjok and Kakao Taxi.

The total transaction amount on O2O service platforms last year was approximately 126 trillion KRW, showing a 29.6% increase compared to 2019 (about 97 trillion KRW). The significant rise in transaction amounts, which are sales of partner companies and franchises registered on O2O service company platforms, is mainly attributed to the surge in demand for product delivery and food delivery due to COVID-19. This is supported by the fact that the transaction amount in the transportation service sector, which includes moving, quick services, and food delivery, reached about 35.3 trillion KRW last year, a 23.7% increase from 2019 (about 28.5 trillion KRW).

Sales also grew. Last year, the total sales of O2O service companies amounted to about 3.5 trillion KRW, an 18.3% increase compared to the previous year (about 2.97 trillion KRW). By service sector, transportation services recorded the highest sales at 1.3 trillion KRW (38.5%), followed by restaurants and accommodations (30.4%), entertainment, sports, culture and education (12.1%), and building rental, brokerage, and maintenance (7.8%).

The business model shifted from being centered on advertising revenue to commission revenue. The proportion of commissions, which was 31.2% in 2019, rose sharply to 52.7% last year, while advertising revenue significantly decreased from 25.6% to 7.3% during the same period.

As the market size expanded, both the number of companies providing O2O services and the workforce increased. Last year, there were a total of 678 O2O service companies, an increase of 123 from the previous year. The entertainment, sports, culture, and education sector had the most companies at 189, followed by transportation services (153), personal beauty, finance and insurance, and others (127), and restaurants and accommodations (80). Additionally, the number of service workers is estimated to have increased by 8.1% from 537,000 in the previous year to about 580,000.

The Ministry of Science and ICT has been conducting the O2O service industry survey since 2019 after a pilot survey in 2018. Notably, last year’s survey was designated as a national approved statistic in recognition of its reliability and usability. The survey selected companies operating O2O services from startup associations and organizations, app stores, and comprehensive corporate information portals, and classified them into seven sectors for the survey.

This content was produced with the assistance of AI translation services.