S. Korea's leading social commerce firm eyes more of Asia

By Lee Youkyung SEOUL, May 31 (Yonhap) -- Ticket Monster Inc., a leading South Korean operator of online daily discount deals, said Tuesday that it has agreed to acquire a Malaysian social commerce company in a push to become the next big advertising platform in Asia. The one-year-old Internet company was one of the fastest growing companies in South Korea in 2010, riding on the boom in the collective buying market. The business model, best known in the form of industry heavyweight Groupon Inc. in the U.S., attracts tens of thousands of consumers flocking to the Web site for half-priced deals for local restaurants, cultural events and other mom-and-pop stores, which receive publicity in return. Ticket Monster acquired Integrated Methods Sdn Bhd, which operates Malaysia's leading social commerce Web site, the company's chief executive officer said. It will launch a business in Singapore later this year, he added, and then the Philippines, Japan and Vietnam. "We are the biggest social commerce company in Asia by trading volume now," CEO Shin Hyun-sung told reporters. "I think it is time to begin expansion in Asia. We can do better than other companies like Groupon." Ticket Monster, which five founding members launched one year ago, said the amount of daily discount deals traded on its Web site reached 20 billion won (US$18.5 million) in May. The figure marks a meteoric increase from one year ago when the amount of deals stood at less than 20 million won. The company also plans to introduce a new version of its collective buying service for mobile phone users to offer discount deals based on users' location information and for instant use, Shin said. As the social commerce market's expansion has been unprecedentedly quick, operators of such sites have been pounded by criticism in South Korea largely for its poor customer support. Despite criticism, industry players believe that the collective buying platform will become the next biggest destination for advertising money, a position that is claimed by Google in the U.S. market and NHN Corp., operator of top Web portal Naver, in South Korea. Naver surpassed major broadcasters in South Korea as the largest ad platform, according to the latest industry report. "Because the ad business for small and medium enterprises hasn't changed, the first generation of social commerce businesses grew tremendously," Shin said. Experts echo the view that social commerce companies are most likely to be the next Google or NHN in terms of ad sales. "It is an ad business disguised as shopping. From the start, it was about ads, not commerce," said Ryu Hanseok, a director at the Seoul-based Technology, Labor and Culture Institute. "The possibility (of becoming the biggest ad platform) is higher than any other service." But, Ryu warned, the social commerce market's poor customer support could hinder its further growth.