"Not Spam" Text-Based Closed Commerce Strengthened by the Three Major Telecom Companies

T Deal, K Deal, Uplus Cock, etc.
Transaction Volume Increased 3 to 9 Times Compared to Initial Period

[Asia Economy Reporter Cha Min-young] The big data war among the three major telecom companies has ignited into a closed commerce business based on text messages. The total transaction volume (GMV) has shown aggressive growth, increasing by up to nine times depending on the period. They plan to differentiate themselves by recruiting executive-level talent from competitors as latecomers and by incorporating new features such as gifting and application (app) push notifications.

According to the industry on the 17th, the transaction volume of the text-based closed commerce services of the three telecom companies has increased by 3 to 9 times compared to the launch period. SK Telecom’s ‘T Deal’ grew more than ninefold from about 3 billion KRW in Q2 2020, right after the service launch, to about 28.4 billion KRW in Q1 this year. LG Uplus’s ‘U+Kok’, which has operated the service for the shortest period, also grew more than three times compared to its initial volume. KT’s ‘K Deal’ is also accelerating its growth. Nasmedia, which operates K Deal, announced that platform segment sales grew 59.2% year-on-year in Q1 this year due to the sales effect of K Deal.

The text-based closed commerce service, first launched by SK Telecom in 2020, is a shopping service that proposes customized products one-on-one to customers based on big data. Telecom companies are increasing transaction volumes by deploying various marketing tools such as ‘Brand Day,’ ‘Time Specials,’ and ‘Gifting’ events and services. LG Uplus, as part of its ‘True Fan’ strategy, offers an additional 3% discount on all products within U+Kok to customers with VIP status or higher.

The main purpose of the closed commerce business is a small and medium-sized enterprise (SME) and small business-friendly strategy and environmental, social, and governance (ESG) activities. T Deal’s sales from SMEs account for 96% of total sales. U+Kok also has an SME product ratio exceeding 95% of all products. The low cost per text message sent also increases the business’s attractiveness due to cost efficiency. From the telecom industry’s perspective, which monopolizes its customer data, it is also a testbed to see if targeted advertising to customers is possible. There is also potential to use it as a foothold for future big data strategies through ultra-personalized customized product and service recommendations.

As a latecomer, LG Uplus has taken a strong step in talent acquisition to narrow the gap with competitors. They recently recruited Kim Tae-hoon, former senior research fellow at LG Business Research Institute, who served as head of smart push-type advertising products and T-Deal TF leader at SK Telecom, as head of the advertising business division. Led by Kim Tae-hoon, LG Uplus plans to launch the web-based platform U+Kok mobile app and develop it into a customized commerce service combining app push and messages. Kim said, "Based on ultra-personalized customer data, we plan to connect heterogeneous media into a single platform and provide the only integrated advertising platform among the three telecom companies."

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