[Asia Exclusive] The Era of Untact Revolution... Anyone Can Become the Next 'Style Nanda'

Direct Approach - Jaeseok Lee, CEO of Shopping Mall Platform 'Cafe24'
E-commerce Now with New Survival Strategies
Anyone Can Start a Business with Creative Ideas
Building Online Shopping Malls and Linking with Large Corporations

Transaction Volume Growing 20% Annually, Expected 10 Trillion Won This Year
Maximum Shopping Mall Startups... Surpassing 1.79 Million Cumulative
Selected as Facebook E-commerce Partner
Accelerating Global Market Expansion Including India

Lee Jae-seok, CEO of Cafe24, is being interviewed by Asia Economy on the 7th. / Photo by Moon Ho-nam munonam@

[Interview = Myung Jin-kyu, Head of Consumer Economy Department at Asia Economy, Organized by = Reporter Lee Seung-jin] "The biggest change after COVID-19 is that our entire society has not just gradually adapted to the concept of untact (contactless), but was forced to accept it. We can say that an era of radical and disruptive innovation has arrived. Although e-commerce has been active for a long time, it was still regarded as a complement to offline retail, but now the understanding of e-commerce itself has changed. Across all age groups, the understanding of e-commerce has increased, making communication with those preparing to start businesses smoother. Before COVID-19, people only vaguely thought about entering e-commerce, but now they are taking action. This is the biggest change brought by COVID-19."

Lee Jae-seok, CEO of Cafe24, said this in an interview with Asia Economy regarding the biggest changes caused by the novel coronavirus infection (COVID-19). The rapidly growing e-commerce market has entered an explosive growth trajectory due to COVID-19. As the untact consumption culture becomes daily life, many companies are building online shopping malls as a survival strategy. Among these, one company is receiving the most attention: the global e-commerce platform Cafe24.

Cafe24 is an e-commerce solution company that provides online shopping mall construction services and connects domestic and overseas shopping malls. Moreover, it partners with major domestic shopping malls such as Coupang, Gmarket, SSG.com, and Lotte ON, supporting mall operators with integrated market management services that allow them to easily sell products not only on their own malls but also on external markets.

Cafe24, which has achieved steady growth, is experiencing explosive growth this year and expanding its business into the global market. Last year, Cafe24's sales reached 217.2 billion KRW, a 24% increase compared to the previous year, achieving an average growth rate of over 20% for three consecutive years. Especially this year, the number of online shopping malls launched through Cafe24 has reached a record high. In the third quarter alone, 35,836 online shopping malls were built through Cafe24, and as of September, the cumulative number of shopping malls reached 1,797,123.

In May, Cafe24 was selected as the only partner company in Asia for Facebook's e-commerce project 'Facebook Shops.' This project involves Facebook collaborating with e-commerce companies worldwide to discuss and create various e-commerce business strategies needed by online shopping mall operators. Based on this, Cafe24 plans to accelerate its entry into global markets such as India. The following is a Q&A with Lee Jae-seok, CEO of Cafe24.

-You are considered a beneficiary of COVID-19. How are the results up to the third quarter?

▲We do not set specific numerical goals. Focusing too much on numbers can cause us to miss the flow of the times. What is important is whether the business model is functioning properly. In that regard, things are going well, and I believe we have fully met expectations up to the third quarter. Since its listing, Cafe24 has steadily grown, with transaction volume increasing by an average of 20% annually over the past five years. This year, we expect the transaction volume to exceed 10 trillion KRW.

-What is the business strategy focus for this year?

▲One of the biggest business plans this year was to establish overseas branches. However, as COVID-19 spread worldwide, business trips have been impossible since February, and most business plans were put on hold. Nevertheless, there are clear achievements due to COVID-19. Previously, the industries hoping to build online shopping malls were limited, but this year, due to COVID-19, businesses have progressed in various fields regardless of industry, including manufacturing. Also, as many product sellers gathered, we strengthened integrated management functions to manage their entry into other markets. Since overseas business became difficult, we focused more on managing domestic platforms.

-There must have been many setbacks in overseas business.

▲At the beginning of this year, I expected to be traveling to places like the Philippines and Europe around this time to plan overseas business. Especially for India, establishing a branch this year was a goal, but it was postponed, which is disappointing. However, we are continuously pushing forward with business plans in India and expect to establish an Indian branch as early as the first half of next year. Before COVID-19, India recorded a high growth rate of around 7%, and its purchasing power with a population of over 1.3 billion is a significant advantage.

-You are receiving love calls from global e-commerce companies.

▲First, we provide infrastructure for domestic businesses to enter global markets. Anyone can easily build overseas malls through Cafe24. We support a total of seven languages, including English, Chinese, and Portuguese. Localization is key to overseas expansion. We partner with leading e-commerce companies worldwide to support expanding sales channels and marketing optimized for local markets. For example, in the Southeast Asian market, through market linkage with the largest local open market 'Shopee,' any Cafe24 customer can enter markets like Vietnam and Singapore. Second, we directly expand the Cafe24 platform overseas. This supports global online business for overseas operators. Currently, Cafe24 has entered Japan, Vietnam, and the Philippines. We plan to expand beyond Asia to North America and Europe in the future.

-Naver Shopping's advance is remarkable, but Cafe24 is growing instead.

▲From afar, we may seem competitors, but the market is divided depending on what the business focuses on. Portals like Naver provide e-commerce services centered on consumers, whereas Cafe24 is a platform strictly focused on sellers. Every service and function of the Cafe24 solution is designed from the seller's perspective to make business convenient. Sellers can build their own stores and designs according to their preferences. Rather than direct competitors, we see each other as good competitors and partners within the ecosystem. Cafe24 is more interested in sellers expanding overseas regardless of market type.

-What are Cafe24's strengths and differentiators?

▲In the e-commerce market with many players, content and branding are important. For this, a unique online space is necessary. Unlike portals or open markets where sellers fit into fixed formats, Cafe24 allows free construction of shopping malls according to individual tastes and items. The great attraction is that with creative ideas, anyone can open a differentiated online shopping mall. Cafe24 is an IT platform that enables differentiated content and branding, which aligns with global e-commerce trends. Like 'Stylenanda,' which achieved great success worldwide through Cafe24, we believe more successful shopping malls will be spotlighted in the global market.

-You have reached the 22nd anniversary. What is the growth engine?

▲We were founded in 1999. Over more than 20 years, Cafe24 has always achieved steady growth. First, choosing the internet business, a core industry, is an important growth factor. We expect the online-related market to continue growing for the next 20 years. Internally, we have a culture that respects the individuality of each employee. We do not force individuals into the organization, allowing members to work autonomously, which brings great satisfaction in their work. Also, rather than focusing on quantitative standards, our corporate culture strengthens competitiveness by raising the level of the Cafe24 platform. This is the background of Cafe24's steady growth.