Status of e-Commerce in Korea Sangwon Lim Senior Researcher Korea Institute for Electronic Commerce Sangwon Lim Senior Researcher Korea Institute for Electronic Commerce Oct. 14, 2005

▣ KIEC A Bridge between government and private sector A steppingstone for international cooperation A creator of an e-Business friendly environment A hub of Korea’s e-Business industry Korea Institute for Electronic Commerce, established pursuant to the Framework Act on Electronic Commerce, is dedicated to promoting e- Business as a driving force in the digital economy.

Infrastructure e-Business Research and Survey Development, Dissemination and Promotion of Standard e-Documents Support for Cultivating e-Business Human Resources Support for e-Business Technology Development Promotion of the e-Learning Industry Operation of Electronic Commerce Resource Center eTrust Authorization Program Electronic Commerce Mediation Commerce e-Business Week and e-Business Award Evaluation and Accreditation of e-Business Venture Participation in and Cooperation with Global Bodies in e-Business Cooperation with Major e-Business Leading Countries Government for Business (G4B) Promoting the e-Health Industry Designation of Accredited Electronic Document Repository Promotion Global Cooperation Enhancement Major Activities

▣ Korea eCommerce Market YearTotalB2BB2GB2COther ,832151,34916,1664, ,445201,06421,0285, ,286(100)271,578(89)26,583(8.7)6,262(2.1)863(0.2) e-Commerce Volume (Unit: Million USD) (Source: Korea National Statistical Office, May 2005)

E-Marketplace Business AreaNumberPercentage Chemistry146.0 Construction146.0 Agricultural, dairy & marine products, F&B198.1 Steel93.8 MRO239.8 Textile146.0 International Trade Healthcare135.6 Oil52.1 Machinery & Industrial Materials Electronics Other Total (Source: Korea National Statistical Office, May 2005)

G2B (Government Procurement) YearTotalPurchase of Goods & ServicesConstruction ,1666,6029, ,0288,17512, ,583(100)9,541(35.9)17,043(64.1) (Unit: Million USD) (Source: Korea National Statistical Office, May 2005)

Cyber-shopping Mall NumberPercentage General Retailers Specialized Retailers3, Total3, (Source: Korea National Statistical Office, May 2005)

▣ KEBIX (Korea e-Business Index) e-Business e-Business - “e-business means strategically and systematically transforming and innovating business processes within and across firms by electronically networking various business actors, thereby improving operational efficiency and creating value” e-Business Index - Quantifiable values by evaluating the e-business status of companies comprehensively Scorecard - Objective assessment tools for diagnosing and comparing the specific situations, and scoring the core factors selected from the conditions Basic Definition

Environment Resource & Infrastructure Process People Value Customers, Suppliers, Government Policies that influence That influence the e-Business of an enterprises Computers, networks, security, and disaster recovery etc. for implementing e-Business e-Transformation of tasks and business processes CEO, executives, and employees carrying out e-business Effects and values acquired from the e-business The e-business scores is calculated based on only 3 areas: ‘Resources & Infrastructure’, ‘Process’, ‘People’ The evaluation on the ‘Environment’ and ‘Value’ not included in the e-business index score, but employed for analyzing the relationship between e-business and its performance Components of e-Business

I Environment (5) Customer Environment e-business readiness and infrastructure of customers Supplier Environment e-business readiness and infrastructure of suppliers IT Environment skills and service level of e-business enablers Policy and Industry Environment - environment of legal & institutional - environment of related associations & leading company II Resources & Infra (4) IT Investment financial resource for e-business initiative Computing & Network Implementation level of computing & network infra Security & Risk Mgt system/ process/ guideline for security & risk management DB & Integration management of DB and its integration III Process (4) Supply-side Process e-business in work processes for purchase & procurement Operation Process e-business in production and service development Sell-side Process e-business in sales and customer management Supportive Process e-business in personnel/ financial/ intellectual mgt IV People (5) CEO recognition and will of CEO on e-business Executives recognition and will of executives on e-business e-Business Org. & personnel capability and support of e-business org. & personnel Whole Org. & Personnel e-business mind and readiness of whole org. & personnel V Value (2) Overall Value value and benefit creation from e-business general Value by Process value and benefit creation in primary activities

Industry-Specific Scorecard Industry-Specific Scorecard Manufacturing(1) & Non-manufacturing(11) Scorecard Textile Petrochemistry Steel Machinery Electronics Motors Pulp/Paper Food/Beverage Manufacturing 12 Scorecard 12 Scorecard Non-Manufacturing Wholesale/Retail Construction Transport Telecommunication Public Services(3) Finance(4) Environment, Resources & Infrastructure, People  Identical across industry Process and Value  Differentiated across industry Environment Resources & Infra ProcessPeopleValue Identical Differentiated Industry-Specific Scorecard

▣ KEBIX in Petrochemical in 2004 Overall Index Score Category WeightIndustryTotalPetro-Chem.WeightIndustryTotalPetro-Chem.WeightIndustryTotalPetro-Chem. Total Index 100% % % Environment15% Resources & Infrastructure 20% % % Process35% % % People30% % % Value (MOCIE, Dec. 2004)

Environmental Score Category WeightTTLPetro-Chem.TTLPetro-Chem.TTLPetro-Chem. Needs Customer30% Supplier30% IT Industry20% Competitor Laws & Systems Policy, etc. 20% TTL100% (MOCIE, Dec. 2004)

Resources & Infrastructure Score

Process Score

People Score

Value Score

▣ KEC (Korea EDIFACT Committee) KEC Structure KEC TAG KEDIFACT Sub-Committee ebXML Korea Committee Secretariat : KIEC Iron & Steel Committee Automobile SC …. Total of 31 SCs Procure- ment Committee Ad-Hoc Special Committee

SCDomainSCDomainSCDomain 1Trade11Iron & Steel21Industrial Tools 2Finance12Health Care22Agriculture/dairy 3Customs13Procurement23Construction 4Land Transport14Ship-building24Precision Chemistry 5Air Transport15Textile25 Mold & Die Industry 6Sea Transport16Electricity26Petroleum 7Insurance17Heavy Industry27Corrugated Packing 8Distribution18Bio-industry28Furniture 9Electronics19Watch & Clock29Logistics 10Automotive20Fastener30Culture & Tourism 31Cross-industry List of 31 SCs

Thank you!