Social Commerce and Consumer Protection Policies

Abstract

Abstract This study intends to investigate some practical problems that arise from the development of the social commerce market and propose a set of consumer protection policies. To that purpose, we discuss the concept of social commerce and analyze a few common types of social commerce in Korea. Then, we look into the problems of the social commerce industry and propose a set of consumer protection policies that can deal with those problems. The goal of the current paper is to suggest optimal policies that can protect consumers from this new trend of online transactions. We hope that the proposals can help establish the base of consumer protection from the social commerce business. Key Words : social commerce, consumer protection, problems of social commerce, consumer policies * Professor, Dept. of Advertising and Public Relations, Namseoul University 논문접수: 2012년 7월 18일, 1차 수정을 거쳐, 심사완료: 2012년 8월 21일 1. The purpose of analysis 1.1 The concept of social commerceSocial commerce refers to the online transactions that occur through social network service. A group purchase with more than a certain number of consumers makes a considerable rate of discount possible. The name 'social commerce' comes from the fact that consumers use social network service in order to gather a group of interested users and put the discount through. The online dictionary Wikipedia defines the term as 'a subset of electronic commerce that involves using social media, online media that supports social interaction and user contributions, to assist in the online buying and selling of products and services'. Others call it 'social shopping'. In the portal site Naver.com, it is defined as 'a type of electronic transaction where a certain product or service is sold at a considerably discounted price for a certain period of time with the condition that a minimum number of buyers have to purchase'.The term 'social commerce' was first introduced in 2005, when Yahoo developed the pick-list sharing service of Shoposphere. In 2008, the online discount coupon service named Groupon launched a business model of group purchasing and the concept of social commerce has gained popularity around the globe. The basic flow of social commerce is presented below in