SK C&C beefs up mobile commerce

SK C&C USA CEO Jung Jae-hyun, right, shakes hands with Frank Rosenberg, director of the Product and Services division of Vodafone, after the two agreed to cooperate in the mobile commerce market in October, last year, at SK USA’s headquarters in New York. / Courtesy of SK C&C

Firm teams up with OLO for expansion

By Kim Yoo-chul

SK C&C, the IT solutions unit of SK Group, remains bullish in the rising mobile commerce market. It has been pursuing overseas partnerships in a bid to become a total IT solutions provider.

While its main local rivals including Samsung SDS and LG CNS still face difficulties in international markets because of a lack of expertise in system integration (SI) services, the SK affiliate, headquartered in Bundang, Gyeonggi Province, has been building a strong client base.

“SK C&C plans to generate 2.5 trillion won in revenue and 220 billion won in operating profit this year, up by 11.5 percent and 9.6 percent from last year, respectively,” said a company spokesman in a statement to The Korea Times, Tuesday.

The spokesman said the company will complete its “Beyond Domestic, Beyond IT Service” transformation this year. He stressed the company’s top management plans to realize its “4th To-Be” initiatives this year.

The company has identified three main goals: increasing profit in the SI business, strengthening solution-based services and finding new business opportunities through collaboration with existing partners.

“We will be much faster in expanding our business territories abroad,” said the spokesman.

C&C is expanding in mobile payments after signing partnership agreements with Google and Dunkin’ Donuts. CorFire, the mobile commerce business of SK C&C USA, announced a strategic business partnership with OLO ― the fastest growing digital commerce engine for restaurants.

OLO’s digital point-of-sale platform allows multi-unit restaurant chains, mainly in the quick service category, the ability to offer mobile and online ordering.

“This partnership creates synergy between two of the leading mobile commerce companies to offer a full suite of services: mobile ordering, mobile local offers, mobile payment, mobile gifting, mobile loyalty, and mobile social check-ins,” said OLO CEO Noah Glass.

Other major business partners including Vodafone and SingTel are helping the Korean provider rewrite its corporate history.

“Local regulatory issues have so far been forcing investors to unload C&C stocks. But this is no longer a risk because C&C’s mobile commerce business has stabilized thanks to its stronger client portfolio,” said Kim Joon-sup, an analyst at E-Trade Investment.

C&C’s desire to grow its mobile payments business coincides with the explosive growth of mobile commerce, which many brands and retailers are beginning to take advantage of.

As of late 2010, mobile commerce accounted for only 3 percent of e-commerce.

By the end of last year’s holiday shopping season, this number had risen to 11 percent or $18.6 billion in consumer spending, according to data from comScore, a leading market research firm.

Thanks in part to a new ecosystem of retail and shopping applications, mobile-generated retail spending could rise to 15 percent of retail e-commerce by the end of this year.

More than 1 billion people may use mobile payments, equivalent to almost $1 trillion in transaction value, by 2016, according to IE Market Research, another research firm.

“I can say the reason is simple ― the continued proliferation of Google Android and iOS devices, as well as tablets, have led to new mobile usage habits such as ‘lean-back’ shopping and the big explosion in mobile commerce,” said Lee Hoon, an analyst at Korea Investment & Securities.

He said it’s no surprise to see a further market expansion because smartphones and tablets are becoming commoditized.

In the company statement, C&C said it formed an alliance with the First Data Corporation in the United States to provide key solutions for Google’s mobile payment services.

Last year, it completed the development of a mobile wallet service system for Dunkin’ Donuts in the United States. The solution uses C&C’s in-house mobile wallet solution, CorPay, and patented marketing solution, Cor360.

“Those deals encouraged us to strike a new mobile commerce partnership with Vodafone in the United Kingdom, the world’s No. 2 mobile carrier,” the company spokesman said.

The spokesman said the company reached a partnership agreement with PayPal, and has been fine-tuning needed technologies for this partnership.

Specifically, C&C has been developing technology that would help shoppers get coupons and pay for items on their mobile phones.

“Because the government is seeking balanced economic growth that includes local small- and medium-sized enterprises, it has been forcing SI providers including C&C, Samsung SDS and LG CNS not to supply their solutions to their own affiliates. But we don’t worry too much about C&C. C&C’s approaches to mobile commerce-related solutions have so far been effective, and C&C has been catching up with the market trends,” said Lee.