[700 Trillion Distribution War] The Intensified Paid Membership Battle, Winning Strategies Revealed

Charm alone is not enough... Without a 'killer service,' failure is certain
Expanding services that are easy to recognize and use is essential

Following Coupang and Naver, even Shinsegae has intensified the competition for paid memberships, influenced by an all-encompassing competitive environment that transcends industries. This is because securing loyal customers who seek specific products and services is essential for medium- to long-term survival amid fierce competition. From the consumer's perspective, since they must make limited choices within a fixed budget across all industries' services, the industry consensus is that a service cannot simply be 'attractive' to become the ultimate winner. There must be a 'killer service' that makes consumers say, 'I can't do without this,' even when paying a cost, to open consumers' wallets in the current situation where concerns about economic downturn are already strong.

According to the distribution industry on the 19th, users of major subscription economy services in Korea exist not only across the broad distribution sector, such as Coupang Wow Membership (about 11 million) and Naver Plus Membership (about 8 million), but also across lifestyle and culture sectors, including KT IPTV (8.58 million, first half of last year), Coway water purifier rental (6.56 million, June last year), SK Broadband IPTV (6.24 million), Netflix (5 million), and Melon (5 million).

This month, Shinsegae Group officially entered this arena by launching the paid membership 'Shinsegae Universe Club,' promoting 'virtually zero annual fee' and 'integrated discounts across six online and offline affiliates.' Market reactions to this latecomer were mixed. While some praised the return of the annual fee through Emart's 'e-money' as 'worth trying,' others criticized it as useless, lacking significant advantages compared to existing card discounts and coupons.

(From left) Lee In-young, Co-CEO of SSG.com, Kang Hee-seok, Co-CEO of E-Mart and SSG.com, and Jeon Hang-il, CEO of Gmarket, are taking a commemorative photo after the launch briefing session of Shinsegae Group's integrated online and offline paid membership 'Shinsegae Universe Club' on the 8th. Photo by Kang Jin-hyung aymsdream@

Earlier, major companies that introduced paid memberships highlighted free shipping as a core service for Coupang and 11st, and points accumulation for Naver. Their strategy is to make consumers reluctant to cancel paid memberships by eliminating delivery fees even for a single order and to make them feel that 'membership is beneficial' through accumulated points over time.

In particular, Coupang and Naver, each with 11 million and 8 million paid members respectively, included free use of online video services (OTT) in their offerings, reducing the burden of additional monthly content subscriptions and enhancing the appeal of paid memberships. This month, Coupang added reasons to continue paid memberships by offering free access to the latest movie 'John Wick 4' on Coupang Play, invitations to the South Korea vs. El Salvador national soccer match, and tickets to attend SNL Season 4 recordings. Next month, as part of the 'Coupang Play Series,' they will host a match inviting Manchester City and Atl?tico Madrid from the English Premier League, with tickets available exclusively to Wow Membership members. Naver expanded its subscription content services such as OTT, streaming, and webtoons, offering one free item monthly to broaden consumer choices. Conscious of this, Shinsegae also announced at the paid membership launch briefing that it is considering adding content benefits such as OTT.

Industry experts unanimously agreed that to be chosen in the already burdensome competition among consumer paid memberships and subscriptions, it is essential not only to ensure that the money spent monthly or at once is not wasted but also to maintain and expand content enough to justify the effort to sign up and maintain the membership. Professor Eunhee Lee of Inha University's Department of Consumer Studies said, "To survive in the competition, benefits that are easily recognized and convenient for consumers to use must be consistently provided."

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