Korea has several excellent advantages around the world. First, let’s look at the transportation system. Not only are subways conveniently connected to major cities across the country and the bus system is well-coordinated with the subway lines, but taxis are also accessible anywhere in any city. In addition, mid- to long-term plans will be carried out to establish an intelligent transportation system infrastructure that communicates with each other using advanced technologies such as artificial intelligence and big data. This system will provide smart transportation services tailored to demand.
The Ministry of Land, Infrastructure and Transport announced on the 19th that it had reported and confirmed the “Basic Plan 2030 for Intelligent Transportation Systems” at a Cabinet meeting presided over by the Prime Minister. The Basic Plan for the Intelligent Transportation Systems is a 10-year legal plan under the National Integrated Transportation System Efficiency Act. It is a promotion strategy that will develop and distribute intelligent transportation systems for each field such as automobiles, roads, railroads, aviation, and sea. The Basic Plan 2030 for Intelligent Transportation Systems was established with the vision of “providing eco-friendly, safe and uninterrupted transportation services.”
Prior to the commercialization of fully autonomous vehicles in 2027, communication infrastructure will be installed on major roads nationwide starting this year, and a security certification system will be established for reliable information exchange between vehicles and infrastructure centers. In addition, standards related to the structure and urban air mobility boarding facilities will be prepared, and three-dimensional maps will be created for safe and efficient operation in the city to prepare for full-scale utilization. According to the basic plan, a smart CCTV monitoring system that detects unexpected situations with artificial intelligence will also be expanded and installed. Through this, a road condition management system that provides cautionary information to drivers will be established. It will also introduce a smart railroad crossing that judges traffic flow and self-determines dangerous situations. By 2025, it will be built first in 200 places with heavy traffic to prevent accidents. Using artificial intelligence, it will also implement a customized virtual assistant service that provides the optimal route of travel from home to airport boarding through mobile to enhance the convenience of air transportation.
Finally, it will support overseas exports of railway operation and safety management technologies and create a Korean-style export ecosystem by assisting domestic companies related to marine technologies such as intelligent maritime transportation information services. Ahn Seok-hwan, head of the Ministry of Land, Infrastructure and Transport in South Korea, said, “We expect the Basic Plan 2030 for Intelligent Transportation Systems to improve the transportation system so that people can move more safely and conveniently from their departure to destination.”
The second is communication network service. It has once again been confirmed that Korea’s broadband network penetration rate is the world’s highest. EMarketer, a U.S. IT research firm, recently released a report titled “Global Broadband Network: 2005-2011,” and said, “78.8% of all households in Korea (as of 2006) have access to the Internet through broadband networks.”
▲ The ranking of broadband penetration rates by country announced by U.S. IT research firm Imarketer. South Korea, which was surveyed to have a total of 12.7 million households subscribed to broadband networks, topped the list with 78.8% penetration rate.
The survey showed that South Korea, which has emerged as the “world’s No. 1” in broadband network penetration, is far ahead of Canada, which ranked second with a 58 percent penetration rate.
Japan ranked third with 52.3%, followed by Britain (47.1%) and the United States (45.9%). China’s broadband network penetration rate, which has recently seen a surge in Internet users, was only 12.6%, ranking 12th. Meanwhile, the penetration rate of broadband networks combined with all other countries except the 15 countries that ranked in the rankings is about 3%, indicating that the “digital infrastructure gap” between countries is still significant.
The report also predicted the prevalence of broadband networks in countries in the Asia-Pacific region in 2011. Among the countries in the Asia-Pacific region, Australia is expected to show the fastest growth rate, with broadband network utilization per household rising from 45.4% in 2006 to 78.7% in 2011. The factors suggested as the basis for this prediction is overheated competition among Australian broadband providers. However, such rapid growth is unlikely to surpass Korea’s advanced infrastructure. Korea’s broadband network is expected to continue to expand in the future, showing a penetration rate of 81.9% in four years. In 2011, only 76.1% of Japan’s penetration rate, 23% of China’s total households, and 1.2% of all households are expected to remain at 5% in four years. The survey’s “wideband communication network” category conducted by eMarketer included
ADSL cable satellite wireless Internet optical cable power line communication (PLC) American WiMAX) that can communicate at a speed of 200 kbps in at least one direction.
Third is the development of the e-commerce market.
As competition intensified due to Coupang’s fast delivery system, the profitability of the e-commerce industry turned red. Major e-commerce companies such as Coupang, 11th Street, SSG Dotcom, and Lotte On also saw their losses increase significantly year-on-year. Coupang recorded a deficit of 600 billion won ($510 million) in the second quarter, more than five times higher than the same period last year. This is due to increased demand for investment in new platforms such as investment to strengthen delivery competitiveness and live commerce. Although the online commerce market is expanding due to the prolonged COVID-19 situation, there are concerns that it will become a “bottomless poison” as competition intensifies. The fire at the Deokpyeong Distribution Center was also to blame for the loss as the cost of damage was about 340 billion won, but even considering this, the deficit more than doubled. 11th Street saw its sales rise 3.6 percent to 132.9 billion won, but its operating loss rose from 9 billion won to 14 billion won. SSG Dotcom saw its sales rise 12.1% to KRW 349.5 billion, while its operating loss rose to KRW 26.5 billion, up KRW 12.8 billion from a year earlier. Lotte On recorded an operating loss of 32 billion won on sales of 29 billion won. The market is growing rapidly, but the profit structure is getting worse as the competition to increase market competition among companies to increase their market share intensifies. The market is steadily growing, with the growth rate of online transactions exceeding 20% until May this year. Competition is intensifying as Coupang, which was listed on the New York Stock Exchange in March and secured 4 trillion won in investment funds, began investing in logistics centers and new businesses in earnest. In the second quarter, each company took strategies such as expanding the delivery area or advancing the delivery time for fast delivery. In the case of 11th Street, “Today’s Order, Today’s Arrival” service or “Grocery Shopping” introduced same-day delivery and early morning delivery, while SSG Dotcom started early morning delivery in Chungcheong Province. Investments were also made to expand the search for products, provide massive marketing activities, and provide new services. Lotte On held promotions to cut seller fees and large-scale discount events to commemorate the first anniversary to secure new sellers, and 11th Street established a new live commerce platform. The e-commerce industry’s “war of money” is expected to continue for the time being. This is because even a little bit of a rapidly growing market can be obtained to lay the foundation for survival. The market concentration of the top three companies, which have already made large-scale investments, continues to increase. As of last year, the top three operators, Naver, Coupang, and eBay, accounted for 43.6%, up from the previous year (37.8%). In the second quarter of this year, the growth rates of top businesses such as Coupang and Naver were 71% and 42.6%, respectively, far exceeding the growth rate of the overall market. Accordingly, small and medium-sized businesses are pursuing strategies such as joint partnership or IPO. SSG Dotcom has begun preparing for listing, including selecting the organizer for listing next year, and 11th Street will introduce a cooperative model with Amazon within this month. Han Tae-il, an analyst at Korea Credit Ratings, said, “The domestic market still maintains a large number of e-commerce companies, and low profitability continues due to high competition strength. Continuous restructuring such as mergers and acquisitions and business expansion is needed.”
SAM KIM
Asia Journal
