For all the wild success of social commerce in Korea in the past year or so, not everyone is happy with how it’s shaping up.
As Bloter notes, most half-price coupons can’t be used before a specific date. Few or no refunds are available, even before the coupon’s period of validity begins. Most coupons offer a rigid 50 percent discount, irrespective of the service or location. And, perhaps most inconvenient of all, social commerce companies issue a set number of coupons regardless of the time, meaning ill-equipped outlets can be swamped with customers demanding discounts at the busiest periods.
A hybrid of the words Location, Time and People, Lotiple was started by seven friends who all attended Korea’s prestigious KAIST University. For the company’s head, Lee Cham-sol, Lotiple marks the second foray into the world of online startups, following an earlier social shopping venture called “O-Ilsan,” which operated, as the name suggests, from the Ilsan district just outside Seoul.
Though Lee says the company started making money almost straight away, his experience provided him with what would ultimately, he hopes, be a more profitable insight (from Bloter):
We saw that the market would very soon generate conflict, so we could see no future in it. Through talking to vendors and customers, we could see there was a clear conflict of interest.
To illustrate the point, Bloter cites a hypothetical popular restaurant in Gangnam. At lunchtimes, it will be swamped with custom from surrounding offices, whether or not it offers coupon discounts. Yet as soon as lunchtime is over, the restaurant will empty out fast. In these circumstances, the coupons clearly offer no benefit at all to participating restaurants, serving only to reduce the take from one of their busiest times.
To counter this, Lotiple hit on a neat solution: let vendors prepare and issue their own coupons via the site. Then, after downloading the Lotiple smartphone app, punters can find out what deals are on offer in the vicinity and use them straight away.
Sweetening the pot some more for vendors, Lotiple allows them to set the size of the discount, the number of coupons and the times the promotion will be valid. They even lend participating shops and restaurants an iPad 2 with which to do it.
Though Lotiple has only been open three months, Lee says the response has been positive so far. However, as with any innovations in social commerce, the window of opportunity before the big boys latch on is very small. As mentioned previously, Groupon, for one, will soon be offering real-time discounts on its smartphone app.
For the time being, however, Lotiple appears to have found a real gap in the social commerce market, and shows, yet again, that there’s no shortage of good ideas in Korea’s start-up community.