SKT "We Are Born to Be a Subscription Business"... Confidence Shown in the 100 Trillion Won Battleground

Yu Young-sang, Head of SK Telecom MNO Business, is explaining the business plan at the launch briefing of the subscription brand 'T Woosoo' held online on the morning of the 25th.

[Asia Economy Reporter Seulgina Jo] "Who is the best business operator to connect consumers and suppliers with subscription economy needs? I thought it was SK Telecom, which has numerous distribution channels, customer response experience, know-how, and has been operating telecommunications for over 30 years." (Yu Sang-young, SK Telecom MNO Business Head)

The reason why SK Telecom, the leading domestic mobile carrier, launched the subscription brand 'T Wooju' for the entire nation on the 25th and entered the subscription economy market is due to strong confidence based on online and offline competitiveness. Against existing subscription commerce giants such as Naver, Kakao, and Coupang, SK Telecom aims to achieve 36 million subscribers and 8 trillion KRW in transaction volume in the subscription economy market, which is expected to grow to 100 trillion KRW by 2025.

◆A Look at Wooju Pass

On the morning of the same day, SK Telecom held an online press conference to announce the new subscription brand T Wooju and its subscription business plan. The main point is the launch of the subscription package 'Wooju Pass,' which offers selectable subscriptions tailored to customers' lifestyle patterns, including Amazon free shipping, Google Cloud, Wave, E-Mart, Starbucks, etc., priced at 9,900 KRW and 4,900 KRW models, to be released on the 31st.

What particularly draws attention is the Amazon free shipping benefit. This core service of Wooju Pass is provided through the 'Amazon Global Store' opening on 11th Street on the same day. This is an overseas direct purchase service that allows customers to use the shopping environment of 11th Street to purchase products sold on Amazon.com. Domestic consumers can now order tens of millions of Amazon US products directly on 11th Street and receive them faster. By utilizing a separate logistics center, the delivery period for major products, which usually took 6 to 10 days, is shortened to 4 to 6 days. This is the result about 10 months after the ultra-collaboration between SK Telecom and Amazon was revealed.

The diverse and extensive partnerships also attract attention. It includes not only global big brands like Amazon and Google but also major companies and startups such as E-Mart and Baedal Minjok. This is the first time that Amazon Global Store and Google One Membership have been offered as subscription package products.

In particular, SK Telecom focused on covering customers' entire lifestyle during the preparation process. The disclosed individual products include Baedal Minjok discount coupons, up to 30% discount at Paris Baguette, four 3,000 KRW coupons for E-Mart, Starbucks Americano 4+1 coupons (twice a month), allowing customers to choose according to their preferences. Customers can also change them monthly at will. Soon, Baskin Robbins (7,000 KRW voucher), Yanolja (7,500 KRW discount coupon), Cleaning Lab (8,000 KRW voucher), Bottle Works (10,000 KRW tea voucher), and Ring Tea (60% discount) will also join.

◆Competition with Naver, Kakao, and Coupang Intensifies

With SK Telecom entering the subscription economy market, competition in 'subscription services' with Naver, Kakao, and Coupang is expected to intensify.

Naver started a subscription service on the 20th that allows users to receive products regularly. It also introduced a model providing content such as Naver Pay point accumulation, webtoons, and music through 'Naver Plus Membership' at 4,900 KRW per month. Kakao launched the subscription platform 'Subscription ON' using 'KakaoTalk' in June. The content subscription model 'Kakao View' was also launched this month. Coupang, which introduced regular delivery services early, offers the 'Rocket Wow Club' service for 2,900 KRW, allowing free shipping, same-day delivery, and dawn delivery regardless of purchase amount.

SK Telecom emphasized 'differentiation' and 'variety' in terms of product competitiveness compared to competitors. Han Myung-jin, head of SK Telecom's subscription product CO, confidently stated, "We have composed a package with more benefits and usefulness than any product in the market." For example, in the case of Amazon overseas direct purchase, which usually costs about 20,000 KRW per delivery, subscribers benefit more the more they use it. The ability for customers to change and select products monthly is also a differentiating factor.

The cost-effectiveness relative to payment can be up to eight times. Yoon Jae-woong, SK Telecom's subscription marketing manager, explained, "Amazon overseas direct purchase and Google Cloud are the most preferred services by customers," adding, "We included frequently used daily services such as Starbucks and Baedal Minjok and plan to expand partnerships further."

Unlike competitors focused mainly online, T Wooju's strength lies in the ability to conduct experiential marketing at 3,300 offline stores nationwide. SK Telecom plans to expand offline 'subscription specialty stores' to 1,000 and nurture more than 1,000 professional consultants. There are also plans to link with rate plans and T Membership in the future.

◆Aiming to Dominate the 100 Trillion KRW Subscription Market as a 'Born-to-be Subscription Operator'

Domestic IT giants, including SK Telecom, are entering the subscription economy market due to its growth potential. According to KT Economic Management Research Institute, the domestic market including rentals grew from 25.9 trillion KRW in 2016 to 40.1 trillion KRW last year. The industry expects it to grow to 100 trillion KRW by 2025.

The subscription economy is also an unmissable market as it is becoming a new consumption method for the MZ generation, which will be the main force of future economic activities. Yoon emphasized, "The reason subscription became a hot topic is that the MZ generation, which has a high intention to subscribe, has become the main consumer group, and the evolution of AI and DT technologies has been added."

Another major advantage of the subscription economy model is the generation of stable income. An IT industry official said, "From a company's perspective, it is possible to secure a cash cow and expect a 'lock-in effect' that keeps platform users tied to subscription services."

In particular, SK Telecom aims to build an optimal subscription commerce platform by analyzing customers' preferred content, interests, frequently visited places, and living environments based on telecommunications data accumulated over decades. It views subscription services not as an add-on service to retain existing telecom subscribers but as a future growth engine.

However, SK Telecom made it clear that its entry into the subscription economy is not just because it is a rapidly growing trend. SK Telecom describes itself as a "born-to-be subscription operator" that has successfully conducted various subscription marketing for 35 years. The company added that the annual number of subscription products currently reaches 20 million. Synergies are also expected with subsidiaries such as Wave, Flo, T Map, and group affiliates like SK Magic and SK Rent-a-Car.

Business Head Yu said, "We aim for an AI and data-based online and offline subscription commerce platform," emphasizing, "We will achieve 36 million subscription users and 8 trillion KRW in transaction volume by 2025." He added, "We judged that by combining numerous distribution channels, customer response experience, and know-how with AI and DT elements, SK Telecom can sufficiently play the role of a commerce platform between existing suppliers and customers."

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