This year, it has been predicted that it is possible to end the pandemic and return to normal daily life. Unfortunately, the vaccine is not expected to be announced until the second half of next year. This greatly affects businesses around the world.
South Korea is making a national push to reshape its economy around a concept called “untact.” Developed by a group of local consumer science gurus in 2017, untact envisions a future where people increasingly interact online and companies replace humans with machines to immunize themselves against the effects of rising wages and a rapidly aging workforce.
When the COVID-19 pandemic hit, that future became the present: Untact has become a key plank of President Moon Jae In’s 76 trillion won ($62 billion) “New Deal” program. In the speech to announce the ‘New Deal’ program on July 14, President Mon Jae In emphasized that Korea has the technology and capabilities to lead the digital revolution as the world's best ICT competitiveness and semiconductor No. 1 country. President Moon also said that this New Deal policy will focus on developing a technical economy in which people are centered. The Korean New Deal will focus on expanding South Korea’s digital infrastructure and services, such as data, artificial intelligence (AI), and cybersecurity, and promoting the green economy sector for climate change response. He believes that this policy will, by combining this country’s digital capabilities across industries, transform the economy from a pursuit economy to a leading economy. Kim Rando, a professor of consumer science at Seoul National University who led the team that coined the term “untact,” says South Korea’s record of embracing new technologies and its relatively small size may allow it to quickly become a leader in the emerging field.
As it is difficult to purchase goods offline, the number of consumers buying online has increased a lot. As such, the e-commerce market is experiencing an unexpected boom with Corona 19. According to market researcher Nielsen, Coupang recorded 24.6% market share in terms of payment amount from January to the first week of March this year, ranking first in the e-commerce industry. It is said that the daily average order is also steadily maintaining 3 million orders, twice as much as before the spread of Corona 19. Besides, according to statistics of KBS news, the number of online card payments has increased by 45%. This is a predetermined trend, as the number of consumers ordering online has been significantly higher since the outbreak of COVID-19. According to statistics, the number of delivery of Lotte Mart Mall has unexpectedly increased to 51%. In addition, the number of orders on the food app Yokiyo also increased by 18%. It can be said that this pandemic is the driving force for the digital transformation to take place dramatically.
Many experts believe that many jobs will be lost even after this pandemic ends. We can see President Moon government's ‘New Deal’ ideas in this policy would open up many new opportunities and trends in this society.
First, let mention the 'on-demand business/economy' term. On-demand refers to matching between suppliers and consumers in real time based on the platform. For example, if you look at delivery-type on-demand first, delivery apps such as the Baemin and Yokiyo are very popular. In addition, Airbnb is an example of the sharing economy-type on-demand, which will be a service that directly matches the accommodation supply price and the consumer.
Another on-demand business is the subscription economy, also known as the membership economy. For example, Watcha or Netflix. In the case of the subscription economy, it can be a good platform for companies to continuously generate profits and secure customer loyalty. Or, from the customer's point of view, the subscription service feels more valuable because a large amount of content can be used only for a monthly fee. In addition, what is important in the subscription economy is the data that is collected when the transaction relationship between the consumer and the service is established. This data is collected to improve customized services for customers, and this is the beginning of hyperpersonalization. Therefore, the subscription economy is an industry group that grows at a very fast pace in the era of untact.
And above all, there have been a number of changes in the retail because of the ‘untact’/untouched digital transformation. Representatively, there is a service called live commerce. When a product is sold through YouTube or a video platform, product producers and buyers are communicated directly through live commerce.
In the future, the most important part of digital transformation is the consumer. It can be said that the time has come for customers to think about how to digitally save their purchasing experience from the perspective of the seller and the seller.
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