Live Commerce Sales Soar... AK Plaza Goes All Out for Digital Transformation

Consideration of Establishing a Broadcasting Organization
Department Store Industry's First Adoption of
Simple Payment 'Naver Pay'

Aekyung Group is making every effort to digitally transform by introducing 'live commerce' and 'easy payment' to respond to the rapidly changing distribution environment due to the novel coronavirus infection (COVID-19). The photo shows comedian Hong Yunhwa hosting a 'Gejang Mukbang Live' broadcast on June 2. Photo by Hong Yunhwa

[Asia Economy Reporter Cha Min-young] Aekyung Group is making every effort to digitally transform by introducing 'live commerce' and 'easy payment' to respond to the rapidly changing distribution environment caused by the novel coronavirus infection (COVID-19).

According to related industries on the 2nd, AK Plaza is reportedly considering establishing a broadcasting-related organization after the regular personnel reshuffle at the end of this month to strengthen the live commerce market. This is because it judged that it had achieved satisfactory results in live commerce after entering the market in September last year as the first domestic department store to partner with the media commerce company Grip, coinciding with the COVID-19 situation. From January 1 to the end of October this year, the total number of live commerce broadcasts aired in collaboration with Grip by AK Plaza reached 992. The number of viewers exceeded 320,000, surpassing 300,000 in October alone, and the number of orders was counted at 11,124. The number of Grippers (channels) related to AK Plaza reached 198.

Even in the Chinese cross-border e-commerce market, where major domestic distribution companies are struggling, a solution was found through live commerce. After Lotte Mart, Shinsegae Department Store, and Emart successively withdrew due to low operational efficiency in the Tmall Global specialty store, AK Plaza has continued operations since opening the specialty store in 2016. AK Plaza collaborates with Tmall Global to typically conduct live commerce broadcasts for more than six hours, and recently extended the duration to 10 hours ahead of the November Singles' Day season. After Suwon branch, a dedicated Tmall broadcasting station was installed at the headquarters for filming broadcasts.

Domestic department stores as a whole saw a 14.2% decline in sales in the first half of this year compared to the previous year. AK Plaza (the department store division of AK Holdings) also recorded a deficit of 29.76 billion KRW during the same period. Although immediate sales are urgent, internally, efforts are being made to strengthen the live commerce business from the perspective of securing future MZ customers (a compound term for Millennials and Generation Z).

AK Plaza will also be the first in the domestic department store industry to introduce Naver Pay, Naver's easy payment system. Naver Pay is a representative domestic easy payment service used by more than 30 million people, allowing simple payments without cumbersome authentication procedures such as public certificates or security cards, as long as users have a Naver ID. Through the introduction of Naver Pay, AK Plaza's strategy is to proactively expand the easy payment system and embrace a broad consumer base.