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SK Telecom spins off 11st online shopping site
2018-06-21
SK Telecom is spinning off its 11st online commerce platform to make it the Korean version of Amazon, the company said Tuesday. The company said it attracted 500 billion won ($448,000) in investment for 11st from investors including private equity fund H&Q Korea. 11st is an e-commerce platform operated by the mobile carrier’s SK Planet subsidiary. The announcement comes after SK Telecom CEO Park Jung-ho denied rumors last year that the company was trying to sell 11st to retail groups Shinsegae or Lotte and vowed to make it a leading commerce platform in Korea. The platform, despite its high brand recognition and trading volume, has been a headache for the mobile carrier as it keeps losing money due to high marketing costs. Price wars and competition from large online commerce platforms like Coupang and TMON didn’t help. After being spun off, 11st will be able to shake off losses and become a differentiated online commerce platform, SK Telecom said. 11st plans to digitize its platform using SK Telecom’s latest technologies including artificial intelligence and big data. 11st has already been offering AI-based chat-bot and image recognition-based product search services and is looking into launching a service similar to Amazon Prime, a paid subscription service that offers free two-day delivery as well as streaming of movies and music. 



 It will also expand partnerships with major retailers in the country. The platform will cooperate with fresh-food delivery service Hello Nature, which is currently operated as a joint venture under SK Planet and BGF, the operator of Korea’s largest convenience store chain, CU. Hello Nature, founded in 2012, is known for delivering fresh foods sourced directly from over 1,000 farmers. It started as a wholly owned subsidiary of SK Planet, but in an agreement with the CU operator earlier this month, the two parties said they would run Hello Nature together and make it the No.1 player in the premium fresh food market. SK Telecom will also merge SK Planet’s remaining marketing platforms - its membership service OK Cashbag and mobile gift coupon brand Syrup - with SK Techx, an enterprise mobile platform developer wholly owned by the mobile carrier. The new SK Planet will specialize in offering marketing data analysis and mobile platform related technology to enterprises. “We figured it is best to execute corporate reforms so each company can specialize in a certain business area,” a spokesperson for SK Telecom said. The decisions by the board of directors Tuesday are subject to approval from the shareholders’ meeting scheduled for July 31. After gaining approval, the two new corporations - 11st and the new SK Planet - will be established by the beginning of September.
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