“INTRODUCING THIS must-have item, brought to you at a special price.” Nowadays, consumers tend to purchase various products from social media stars they admire—known as influencers. Influencers, with thousands of followers in their fanbase, make use of their accounts by establishing one-person stores online known as “cell markets.” However, there are limitations as to what individual shop owners can do by themselves, and as the fairly recent trend of cell markets have risen, several problems have begun to emerge. Many “fansumers” who were disappointed after receiving the so-called “flawless” and “well-priced” products are now raising their voices for changes to be made.
The rise of cell markets
The term “cell market” is a market trend where product distribution is divided into “cell units,” as more and more individual sellers are opening their shops on social networking services (SNS). One of the main driving forces behind cell markets is, of course, the exponential growth in the number of social media users in recent years. Social media applications like Instagram and Facebook, both of which are highly condensed platforms that allow active communication among users, have had a profound impact on marketing. Today, sellers create networks and advertise products on social media to ultimately lead people into making purchases. Similarly, influencers utilize eye-catching and charming posts on their accounts to appeal to and gather followers, who subsequently become their buyers.
Functions on social media such as “like,” “comment,” and “share” buttons form the perfect structure for a branching effect. By liking or sharing sponsored posts, other people can also see promotions on their newsfeed**; likewise, the nature of the platform enables posts to branch out quickly with almost no effort. This type of marketing method serves as a suitable strategy for building brand awareness, since it makes the product visible to more audiences. Because of this low-cost, high-efficiency system, sellers have been flocking to social media to advertise their newly opened stores. Furthermore, posts featuring non-celebrities facilitate the word-of-mouth effect, as consumers are more easily convinced by buzzers*** who often create a hype after trying a product. According to a 2016 study conducted by researchers at Sungkyunkwan University, psychological distance between the self and the advertising model plays an important role in marketing; as the distance between the self and the model gets closer, consumers are more likely to make purchases because a non-celebrity feels more relatable. Applying the same idea, many advertisements on social media take the form of an influencer reviewing the product, and then sharing it on their account for other users to see. Although they are not reviewing the products with absolute honesty, the posts are often written in ways that make the viewers think these “reviewers” share the same perspective as that of consumers.
Following the trend
Cell markets start with influencers placing “group orders” of certain products that they have introduced. Most of the time, buzzers are prompted to upload such posts because they had received sponsorships from companies seeking influencer endorsements. The cell market environment then continues to evolve, where influencers start selling products that are either designed by themselves or picked up from wholesale markets. Many sellers also open separate websites (other than their personal SNS accounts) to upload a selection of items that they have chosen to promote. Leaders in this field have even expanded their business through offline stores, which shows that the power influencers hold is no longer restricted to the Internet community.
In an interview with The Yonsei Annals, Oh Sang-eun (Visiting Prof., UIC, HASS) argued that the biggest success factor of cell markets is their “curating role.” Products that people can choose from have become highly diversified as shops—both online and offline—have continued to expand. Yet, these countless options can sometimes be rather overwhelming for consumers. Cell markets are the best place to find collections that meet people’s standards since social media influencers, like Merchandisers**** (MDs), curate and offer only a limited selection of products to their consumers. Oh stressed that “the buyers’ trust in the cell market operator's taste and ability to screen products” are thus crucial elements these shops need to have in order to flourish. Along with the products, followers are buying “taste” when they make purchases because they yearn to follow the influencers’ fancy lifestyles and trendy fashion.
Is it worth buying?
Cell markets that go beyond traditional distribution channels have now secured its place in the minds of customers. Jim Squires, Instagram’s head of business, announced that according to the company’s survey which was conducted among 2,000 South Korean Instagram users, “85% have experience searching for products on Instagram, 63% have visited websites linked to Instagram accounts, and 35% have actually bought from such stores.” A transaction does not end in a simple exchange of goods and payments; it encompasses all the steps from brand marketing and payment methods to customer service. With cell markets, however, a number of issues related to product inspection, seller reliability, and post-purchase product and service management are being discussed among the buyers.
In an interview with the Annals, Hwang Sun-ah (Sr., UIC, Info. & Interaction Design) shared that her experiences shopping from cell markets are enjoyable yet inconvenient. She noted that many individual markets lack detailed images of products when compared to other shopping malls online. Even the available images are mostly Photoshopped, which is a problem as buyers notice that the color and quality of the actual product are different from what they had expected. Lee Su-bin (Sr., UIC, Economics), another social media user who has purchased from a cell market before, mentioned that cell markets not allowing exchanges or refunds is another issue besides the products’ disappointing quality. Although the Korea Consumer Agency states that it is mandatory for all sellers to accept exchanges or refunds within seven days after purchase, many influencer-run stores ignore such measures. The following line is often spotted in the product details page: “No exchanges or refunds allowed, so please purchase carefully.”
Broken promises, upset fansumers
The feeling of betrayal when your role model lets you down is beyond words. Chee-u (real name Son Ru-mi), owner of the designer brand SONUA and online shopping mall Chee-u’s Closet, has been and continues to be a controversial figure in the world of cell markets. Referring to herself as the “Cheongdam Unnie*****,” the influencer regularly uploads posts and videos of her life as a quirky CEO who attends fashion shows but eats food in a traditional market; she has since gained thousands of followers on Instagram and YouTube through her likeable image. After receiving individual orders for customized clothes for five years, Chee-u launched the brand SONUA in July 2016. SONUA sought to position itself as a high-end, “small wedding fashion” label by producing elaborate and trendy garments. However, dresses designed by Chee-u turned out to be copies of other designer brand clothes. Fans were shocked to find out that SONUA’s pieces were cheaper duplicates, the very opposite of what the CEO claimed to be ₩2 million worth tailor-made outfits. Other complaints included slow delivery, poor customer service, and product quality not meeting the buyers’ expectations.
Customers even created Naver****** blogs and Instagram accounts to compile negative reviews, noting the problems that users experienced when purchasing Chee-u’s products. Such accounts recently sparked another controversy, with a post reporting that Chee-u resold fruits bought from department stores by simply changing the label. On her online shop, Chee-u’s Closet, the influencer sold tangerines for ₩12,000 per kg, which is about four times more expensive than tangerines sold elsewhere. Fans were upset after they realized that Chee-u’s promise to provide high-quality products at an affordable price was a lie. Likewise, people are questioning the ethical issues that arose due to the influencer’s irresponsible management.
There were also cases where sellers and buyers went into legal battles. Im Ji-hyun, the spokesperson and creative director of Imvely, received consumer backlash after responding poorly to customer complaints. Im was recognized as a successful, legendary influencer until her buyers started pointing out problems with her cosmetic and food products. Imvely had to pull out from department stores after consumers reported that Imvely’s “fresh and organic” pumpkin juice contained mold. Duty-free shops also stopped carrying her “Vely Vely” cosmetic line because consumers boycotted the brand. User @imvely_sorry on Instagram, who was once a loyal customer, revealed several of the influencer’s misdeeds. Im and 37 of her ex-“Vely”s (the nickname Im uses to call her fans) went to court in May, 2019; the former sued the account owner for defamation, while the latter accused Im for Food Sanitation Law and Cosmetic Law violations, Trademark Law violations, and false advertisements. The case is still ongoing as of March 2020, and the Seoul Southern District Court recently dismissed Im’s request for injunction*******, a desperate attempt for all the posts on the @imvely_sorry account to be deleted.
The future of cell markets
New laws are needed to solve the problems that occur in cell market transactions. In an interview with the Annals, Kong Hyun-min (Visiting Prof., School of Design and Business Admi., Hongik Univ.) asserted that stricter regulations are necessary for online markets that dodge the existing legal requirements. Professor Kong also mentioned that, “the owners’ transparent conduct must coexist with [the cell market system].” According to a 2018 survey conducted by the Seoul Metropolitan Government, about 30% among 4,000 respondents (social media shoppers) felt inconveniences when purchasing from stores on social media platforms. For example, there were cases where consumers lost contact with sellers when they wanted to send inquiries. Since many cell markets are operated through transactions between individuals, some owners even fail to provide business registration numbers. However, such acts are clearly illegal efforts to avoid paying taxes.
About ten bills related to regulating e-commerce and social media markets are currently pending in the National Assembly********. One of them, introduced as the Clean SNS Market Act, allows the National Tax Service to levy taxes by requesting information from social media market sellers—those suspected of tax evasion—on platforms such as Naver and Instagram. An Influencer Training Law is also being discussed among a few policymakers; they expect the government to help influencers with product planning and after-service (A/S or customer service in general) so that the sellers can focus on providing high-quality goods and services. Until such measures are taken into effect, buyers are encouraged to listen to other users in the Internet community about their shopping experiences. Fellow e-commerce shoppers advise consumers to check if the sellers are properly registered and are providing contact information to avoid possible damages in future transactions.
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The line separating celebrities and influencers on social media is blurring with the emergence of cell markets. SNS stars like Imvely received love and support from their followers by sharing their beauty and fashion secrets on their accounts. Promotional posts on social media have the same influence as that of celebrity advertisements in the past, and non-celebrity recommendations are proven to be influential in today’s digital era. Fans buy products that were recommended and attend fan meetings to meet their unnies in real life. However, many of them have turned their backs on influencers after the series of controversies broke out over the past few years. At present, the future of cell markets remains rather bleak; it is now the cell market owners’ duty to rebuild their tarnished image and regain the people’s and the fansumers’ faith in them.
*Fansumer: compound word for fan and consumer
**Newsfeed: webpage that updates users with the latest news and information
***Buzzer: people who are hired to spread a sales message
****Merchandisers: people in charge of product display and promotion
*****Unnie: A Romanized Korean word for “older sister”
******Naver: Korean portal website
Disclaimer: The magazine version's error regarding Professor Oh Sang-eun's affiliation has been fixed in the online version.