Introduction:

Electronic Commerce or e-Commerce refers to Business over the Internet. With the present development of Information System worldwide, it is not surprised that e-Commerce has extend across continents and nations to create a platform for a large group of online business activities each day. These online business transactions are no longer unusual and with the presence of established e-Commerce transaction broker such as Amazon.com, Buy.com, and eBay, more e-Commerce users are growing confident over the wide range of online products and services.

Since 2004, there are always two major forms of e-commerce, which are Business-to-Consumer (B2C) and Business-to-Business (B2B). While companies like Amazon.com cater mostly to consumers (B2C), other companies provide goods and services exclusively to other businesses (B2B). However, in recent years the trend is starting to change as there is a noticeable increase in Consumer-to-Consumer (C2C) activities, this form of e-Commerce is mainly driven through younger generation’s greater knowledge and awareness toward business over the Internet and is commence between private individuals or consumers.

These activities were mainly active in the US and EU nations before 2004, but the amount of trade conducted electronically has grown extraordinarily with the intrusion of Asia Pacific countries lately. As Information System continues to develop, information is able reach out to others in an instant across different communication methods such as Emails, Newsgroups, Instant messaging, Video conferencing and mobile technology. The convenience and efficiency gained from applying Information System into daily business applications have encourages many Dot-com Company like Yahoo to start regional websites such as Yahoo Singapore & Yahoo Japan to focus on individual consumer markets.

Consumers are given the freedom to buy and sell on the Internet Markets or Auctions, with the help of useful tools like Internet Banking Account, Electronic Money (e.g. Visa, MasterCard), Online Shopping Carts and Secured Domestic and International Payment Systems (e.g. PayPal) to make their online purchases. These random and large amounts of online transactions are generally facilitated by an e-Commerce transaction broker by paying a fee to the broker at the end of each transaction.

Following a New York Times (NYT) report in 2008, Yahoo, as one of the Internet giant acknowledged that the growth in the auction business has slowed in recent years and emphasize the issue that most online shopper cannot be bothered with Auctions. For this reason, Yahoo Singapore ceased the operations of Yahoo Singapore Auction and associate with Gmarket which is the leading e-Commerce Marketplace in Korea as a likely replacement. As an e-Commerce Transaction Broker, Gmarket function as a third-party payment mechanism for buyers and sellers to settle a transaction. In this case study, we will analyse the function and structure of Gmarket as an e-Commerce Transaction Broker.
http://www.asiaone.com/Digital/News/Story/A1Story20080822-83605.html Gmarket

Purpose

The purpose of the Gmarket Singapore website is to provide an effective platform for everyone to buy and sell almost every product at a competitive price in a convenient shopping environment. People around the world can simply start buying and selling product just by registering themselves with Gmarket. It is a proven online trading platform for business sellers. It allows its users to buy and sell with just a minimum cost.

Gmarket has revolutionized the collectibles market by bringing together buyers and sellers internationally in a huge, never-ending "yard sale" and auction. Together with its growing number of registered users, it creates a huge range of products lists. Products listed ranges from collectibles to appliances, computers to fashions, and many other miscellaneous items. With this, Gmarket is able to serve as a one-stop online shopping site.


Gmarket Features

1. Business Model
Gmarket is an Online Marketplace which enables trade on a local, national and international basis. With a diverse and passionate community of individuals and small businesses, Gmarket offers an online platform where millions of items are traded.

GMarket’s business model is identical to the C2C market place in terms of providing market place and transaction system to the sellers and buyers. Unlike other auction or market place sites, Gmarket has succeeded in differentiating itself from Auction. Auction mainly focused on growing and maintaining the so-called 'power sellers' (whose transaction size is much bigger than others). While those power sellers were provided with lots of incentives, small sellers faced several disadvantages in selling their products on Auction. On the other hand, Gmarket has targeted these small sellers. The company has offered them a more favourable commission scheme, and this along with the new bidding system, has led to the sudden growth of small sellers’ (mostly apparel and other fashion item sellers) traffic to Gmarket.
Gmarket act as an intermediary, providing an online platform where buyers can list products on sale without any middleman. Consumers are again free to look into the exhibited products and directly correspond with the publisher to avail the product.


2. Payment Method

Gmarket provides its users with 5 payment methods.
PayPal Express checkoutUsers are able to pay for their items through after registering through for PayPal website with their own ID.

i) Cash transfer to Sellers
This is a payment directly to seller's designated bank account if the seller supports direct payment service. For this payment method, Gmarket bears no responsibility in payment dispute between the buyer and the seller. The seller's account information is provided in My Gmarket>>Main page along with order details.

ii) Credit Card
Gmarket accepts both Master Card and Visa. It is the fastest and safest way for payment.

iii) Gmarket-Protected Cash Transfer
This payment method benefits those users who do not have credit card or any other methods to pay. Gmarket protects their payment by Escrow service till trade complete.
Firstly, what users have to do is transfer or deposit into Gmarket bank accounts as below.



They have to make sure to input Gmarket ID once they make a deposit or transfer to avoid delay. Only DBS and SCB bank are available for bank transfer at this stage, but more banks will be added soon.

However, users are not allowed to transfer money through the automated teller machine (ATM) as it does not allow users to input the Gmarket ID and Order number at all.


iv) Real time Cash transfer via I-banking (e-Nets)
This is the newly implemented payment method. It is only available for customers who own an I-banking account. Available Banks users can transfer from are DBS, POSB, UOB and Citibank eNETS covers more than 90% of the Singapore Internet Banking users. Online Direct Debit is suitable for buyers who don't have or won’t use credit cards to pay online. It also minimizes fraud as it uses PINs and tokens to authenticate the buyers.

3) Loyalty (Coupons, Gstamps and Mileages)
Gmarket invest heavily in buying media from major local channels, such as internet portals and price comparison websites, so that users can save on their your own promotional activities and related costs. In addition, Gmarket provides sellers with a range of marketing tools, including loyalty programs.

There are 3 types of loyalty programs:

i) Discount Coupons
Buyers can collect discount coupons by trading in Gstamps or visiting pages that issue discount coupons. Flexible use of coupons, just like in bricks-and-mortar shops, increases the fun side of shopping, while encouraging buyers to buy more on Gmarket.

ii) G-stamps
Registered buyers can earn Gmarket Stamps (Gstamps) through various activities on the Gmarket site, including purchasing selected products and writing product reviews. Gmarket also awards Gstamps through random draws and other channels. Gstamps can be accumulated and redeemed for discount coupons.

iii) Gmarket Mileages
Registered buyers can earn Gmarket Miles by purchasing selected products. The selected products are seller promotions, and the relevant seller bears the cost for issuing Gmarket Miles.


Design

As Yahoo invested in Gmarket after the failure of its now defunct Yahoo's Auctions, its web design inherits some of the user friendliness associated with Yahoo. Unlike its major competitor, EBay, which has a clean homepage with a list of categories and a huge search field, GMarket’s homepage is relatively busy with flashing advertisements of 'sales', 'discounts', 'specials' and 'bestsellers'. Among the clutter, it manages to fit its list of categories and search field prominently on the top of the page.

Gmarket claims to have up to 3 millions visitors and 700`000 transactions daily and in order to cater to the huge traffic the site experiences its servers would have to be scalable to prevent any slowdowns. Its database has to be reliable and efficient in order to handle the many items on sale and reflect any price changes and stock availability in real time.

The website offers several unique features to improve customer experience like discount coupons, G stamps, and Gmarket Mileage. The G Stamps are awarded through various activities on the Gmarket site, including purchasing selected products and writing product reviews. Gmarket also awards Gstamps through random draws and other channels. Gstamps can be accumulated and redeemed for discount coupons. Buyers can earn Gmarket Miles by purchasing selected products. The selected products are seller promotions, and the relevant seller bears the cost for issuing Gmarket Miles.

New users will be able to start shopping quickly as a dedicated customer service page is offered. Everything from help topics to FAQs is available to browse. A live support page for users that require more help that allows users to chat with customer support staff or even have voice communication with them.

Strength

Gmarket is as an ideal choice to replace Yahoo Singapore Auction which ceased operation since Oct 2008. With their established success in Korea and Japan since 2000, Gmarket have great experience in e-commerce and win an opportunity to partner with Yahoo Singapore. In recent years, statistics have shown Yahoo as the no.1 Portal in Singapore, which promises a large amount of customer base to begin with. By associating with Yahoo Singapore, Gmarket is able to attract the interests of existing users from Yahoo Auction to reinvest their interest in Gmarket. The primary different is that Gmarket is an e-Commerce Transaction Broker and is unlike Yahoo Auction, whereby Gmarket does lots of marketing activities to boost it seller’s business and drive traffic to seller Gmarket items.

The successful setup of Gmarket is that, it is as credible and trustworthy as shopping at bricks-and-mortar shop, since payment are made to Gmarket first and then transferred to the sellers based, in principle of the buyer’s confirmation that the sale and delivery has been completed. This greatly reduces the risk of fraud while increasing buyer satisfaction. Gmarket as a third party give user the confidence to buy and sell online as they are able to investigate and resolve the disputes between delivery and other issues for either the buyer or the seller.



The requirement for any new user to register as a buyer/seller at Gmarket is at least 15 years old with other basic conditions and this create early opportunities for younger Singaporean to start off their business. Although Gmarket Smart Shopping gives it buyers’ a wide choice to buy from Singapore, Korea and Japan, Gmarket also provide the flexibility for users to enter an Auction. In Gmarket Auction, buyer and seller meet in a large marketplace of first and second hand goods and user are have the freedom to bid, negotiate, buy, cancel, refund for their goods through an organized business transaction process. The categories of product listing, information of products and the efficiency in the Gmarket Auction are considered an improvement to the old Yahoo Auction.

Gmarket helps it users to sell as they invest heavily in buying media from major local channels, such as internet portals and price comparison websites, so seller can save own promotional activities and related costs. In addition, Gmarket provides sellers with a range of marketing tools, including loyalty programs such as G Stamps & G Discount Coupons & Mileages.

Gmarket do provide each registered user an Individual Message box Application for user to hold and receive messages from sellers in Gmarket. This Message box give communication directly and function the same way as any Yahoo mail or Hotmail account so that users can save the troubles to log in elsewhere to their other email account just to read a reply. There is also a Gmarket Customer Services specialised in targeting Singapore users with all the relevant FAQ and Help Topics such as Bank issue that are informative enough to get them through a Transaction easily. Not to mention the future Gmarket Live Support which is still on trial, Gmarket are making good use of available information system to reach out to consumer with it Live Chat and Voice call features to discuss certain enquires topic online to help buyers make decisions right away.

As a Buyer, Gmarket aims to provide both buyers and sellers with a secure transaction experience by implementing Credit Point & Auction Credit System that rewards good customers. 2-3 credit points are deducted when you cancel or return non-defective items or when you fail to deposit payment within 7 days of placing an order. Therefore if a user drop to zero credit points, the user will no longer receive bonus point benefits, and if the credit points drop to negative 20, the user will no longer be able to purchase from Gmarket.

Gmarket Shopping Cart gives buyer the same satisfaction of purchasing multiple products at eBay or Amazon with some added functions. Gmarket Shopping Cart is able to refresh it memory of what is recorded in the user’s previous visit and displayed the similar items that is in the cart even if the user login to Gmarket from a different computer. It also contain a Wish List function for user to transfer items for observations for a duration of 1 month and this bookmark function is useful for buyer to reserve and decide on their immediate and secondary choices of purchase.

In My Gmarket, buyers are able to gain access to their own Shopping List; this is the buyer’s main User Interface which gives a buyer flexibility to check or make changes to multiple items’ transaction regardless of their status of ‘Buy now’, or ‘Cancel & Refund’. Buyers are also able to extract and review every past Transaction History and pending transactions even from the items brought inside ‘Gmarket Auction’. Buyer also has a individual G Account, it is identical to having a bank account with Gmarket. The advantage is that Buyers are given the freedom to withdraw money from their personal bank account and deposit into their G Account if they are buying in a long term basis. This G Account will have a debit values and gives buyer an alternative bank to purchase items from. On the other hand, buyer can also withdraw the money from G Account to re-deposit into their personal bank.



Besides G Accounts which is active in DBS Bank Ltd and Standard Charter Bank Singapore, Gmarket also provide up to 5 payment methods for the buyers. These are customised payment methods for the Singaporean Market. The other Payment Methods are PayPal Express checkout, Cash Transfer to Seller, Credit Card, Gmarket-Protected Cash Transfer and Real time Cash transfer via I-banking.

As a Seller, there is also a control system that helps to protect and preserve buyer’s confidence on Gmarket. Since sellers have the advantage to host a virtual store which is called Mini Shop on Gmarket, the Mini Shop’s Seller Level is subjective to the seller Past Transaction Performance and History. It is up to the seller responsibility to achieve good ratings in the seller level to be able to gain advantages and entry into buyer’s favourite seller selection. The system gives sellers a good competition and equal opportunities inside Gmarket as they thrive to encourage buyers to re-visit their Mini Shop.

In the virtual store, Sellers are given the freedom to post their selling items into different Category Information for easy and flexible viewing. Gmarket also provides Category Manager to help give suggestion to new seller on how to deal with category and start off with their business.

As a Gmarket Seller, Gmarket create and provide it own applications for seller to manage their business through the Gmarket Sale Manager (GSM). With this information system application, sellers can even use mobile wireless access to sign in to GSM and manage and monitor present as well as past record of the listed order anytime. This management tool is available to every seller and guides them through all the business operation necessary to complete the transaction.



Sellers also have access to Gcash which is a kind of cyber currency used at Gmarket just for sellers. The seller must have enough amount of Gcash in their G Account to be able to sell items by direct payment method on the site; G Cash will be deducted as a success fee if items sell at the rate of Gmarket sets. Finally, as an e-Commerce Transaction Broker, Gmarket charge seller a Flexible Service Fee for each different item sold through Gmarket.



Weakness

Although Gmarket attempts to control the sale of pirated goods that are bound to be sold on the site, they are unable completely remove its presence due to the many individual sellers. There is also no way to ensure that the items arrive as described. The design of its homepage falls behind the simplicity of its rival Ebay. The main page appears cluttered with many flashing advertisments. Its market reach is not that wide as Gmarket.com.sg only caters to the very small Singaporean market. Its registration process to be a seller is very troublesome and might turn away many potential sellers.

Security

Several secure payment options are offered by Gmarket. These include PayPal and all major credit cards. Security of the credit card transactions are certified by VeriSign which allows its buyers to purchase with confidence. Gmarket protects its buyers from fraudulent sellers by providing an escrow service. The buyer does not pay the seller directly as Gmarket will hold all the funds until it can confirm that the buyer has received the purchased good. Disputes can be easily raised if the buyer experiences any problems with the delivery or condition of the product upon arrival. A direct payment to the seller is also possible but this is done at the risk of the buyer as Gmarket will not be able to provide any payment protection.
Gmarket further ensures the security of its transactions by requiring all potential sellers to provide documents of identity with matching bank statements. It is only when these documents are verified that these applicants will be registered as sellers on the website.

Privacy

The opening phrase on GMarket’s privacy policy website is as follows. “We, GMARKET Inc. (the “Company”), take customers’ personal information seriously and use or keep it confidential. In order to protect our customers’ private information, we have established a Privacy Protection Policy (the “Policy”) in accordance with the relevant Singapore laws.”
Its privacy policy covers everything from personal information, whereby Gmarket aims to protect the information of all its registered users from any misuse, to restrictions on advertising, where Gmarket restricts the advertising on its emails sent to registered users.