Consumer complaints about social commerce sites on rise

An increasing number of customers of social commerce sites said they were dissatisfied with faulty contracts or poor services offered by business operators, a report showed Monday. Social commerce, a business model that is most well known through U.S. online commerce site operator Groupon Inc., generates profit by arranging daily discount deals between local retailers and subscribers through collective buying. The number of complaints over social commerce service registered with the Korea Customer Agency (KCA) jumped to 861 in June, up nearly tenfold from 89 in January, according to the report submitted to Rep. Yoon Seok-yong of the Grand National Party. The figure has soared from 34 in 2010 when social commerce sites started their operations in South Korea, it noted. Among the complaints accumulated until June, breach of contracts topped the list with 343 cases, followed by canceled deals with 216 and poor quality of products or services with 144, the report added. "While the social commerce industry is growing at an increasing speed with a low entry barrier, consumer complaints are on the rise," Yoon said, urging thorough monitoring on the fledgling industry. South Korea's social commerce market was valued at around 60 billion won (US$55 million) as of the end of December.