South Korea - Harbinger of Internet Trends

For the future of Internet trends, look no further than South Korea. According to statistics released by OECD and ITIF on April 2007, Korea ranks #1 in broadband penetration [90%], #2 in average internet access  speed [45 mbs], and #2 lowest in internet access cost [$0.45 per 1mbs per month], among 30 OECD countries surveyed. Given its roster of Internet companies, one would guess that the US wouldn't be far behind. However, it merely ranked 12th on the list with 51% broadband penetration, 4.8 mbs average internet access speed and average internet access cost of $3.33.

Other interesting comparison points were in the following areas:

• Popularity of Virtual Worlds: Korea's CyWorld had 14.8 million subscribers versus Second Life's 3.1 million as of June 2007 based on comScore Media Metrix data [Source: eMarketer] - Contrast this with South Korea's population of 49 million versus US population of 301 million
• Popularity of Social Networking: 55% of Active Internet Users in South Korea visited a Social Networking site in the last 30 days versus 24% for the US [Source: eMarketer / Ipsos Insight, 2007]
• Newspaper Penetration in South Korea fell 17% between 2004 and 2006 from 48% to 40% [Source: eMarketer / Korea Press Foundation, 2006]
• South Korea's $ 14 billion B2C E-commerce sales represented more than 25% of all e-commerce activity in the Asia Pacific Region in 2006 (Japan and China were at  $33.5 billion and $2.5 billion respectively, for comparison) [Source: eMarketer, 2007]
• Internet retail sales grew fastest among all retail channels at 23.5% per year, twice as fast as second most popular channel: convenience stores [Source: eMarketer / Korea Times, 2006]
• Clothing, shoes and sporting goods were purchased by 62% of all active internet users in South Korea, ranking number one among all products and services. Music was a close second at 49.1% [Source: eMarketer / MIC, 2006]
• While Music was #1 content purchased online, with 75% of active internet users, Education was not far behind at #4 with 27%
• Mobile TV is a huge growth area with expected subscriber growth of more than 8X in 6 years - from 2.5 million subs in 2006 to 21 million subs in 2012 [Source: eMarketer / TU Media Group, 2006]

Personal Conclusions:

• Keep watching the social networking space for interesting vertical implementations (examples: Maya's Mom, Dogster)
• E-commerce volume will keep going up and personalized recommendations will keep playing an important role in that growth
• Online Education is an overlooked segment and should become much more visible in the next few years
• Mobile TV space should get a lot more exciting if the wireless carriers could improve their user experience and abysmal bandwidth faster

Comments

[da4night]

Cyworld and Second Life shouldn't be compared.
Cyworld is MySpace on steroids; Second Life is a 3-d environment, essentially a game.