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Tech Giants Struggle Among Young Consumers

2018/09/23 | 175 views | Permalink | Source

Korea's top IT firms are trying hard to impress young people as their cachet threatens to fade.

Prof. Han Sang-lin at Hanyang University said, "There is no time to be complacent in the IT industry because it's such a fast changing environment. Many industry leaders 10 years ago who had so much support from people in their teens and 20s but became complacent are gone. The leaders now have to constantly strive to provide new and fun services. If they don't, they will disappear much faster than you'd think"

Some industry leaders have formed teams of new young staff to target young customers. SK Telecom launched a special subscription plan called "Young", which also means zero in Korean, on Sept. 4. University students can use data for free on their campus, and teens can top up data in convenience stores.

The team consisted of staff with less than three years on the job but was entrusted with the service launch from scratch. 

Korea's largest portal Naver also formed a team of new employees to analyze user patterns of young people and reflect their findings in its services for them. Naver recently updated image and video services for young people and now offers recommended videos related to user's searched keywords, just like YouTube.

Kakao will soon add a new function enabling users to erase wrongly sent messages, which competitors such as Facebook Messenger already has.

Koh Dong-jin, the head of Samsung's moile division, said, "Millennials born after 1990 are among our core customers".

But top firms' grip on young consumers is weakening. For example, SK Telecom's market share among those in their 20s or younger is less than 40 percent, lower than the overall market share of 42.2 percent.

One industry insider said, "Youngsters view smartphones as a device to watch YouTube videos and telecommunications services as a data provider". There is no incentive to buy an expensive Samsung phone and take out a more pricey package from SK if they can have cheaper Chinese phones and a no-frills data package.

If this continues, Korea's leading firms cannot guarantee their future five years hence. The age group with the most purchasing power is from 25 to 49, and if they cannot win young people over now, they may never be able to.

"In the past, top companies' influence lasted for two to three decades, but in the age of smartphones and the Internet it's hard to predict even one or two years in future. It's getting harder and harder to maintain the top position in Korea with fast-changing technologies and fierce competition with global firms such as Amazon, Facebook, and Google", said an executive with one of Korea's largest firms.

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