[Herald Interview] ‘In influencer-economy era, even internet giants require 3rd-party big data’
When Korean telecom firm KT decided to open a platform leveraging its big data on consumer behavior, it searched for other models to benchmark, but found it difficult.
It finally zeroed down on the Shanghai Data Exchange, founded in 2016. The two organizations have since signed a memorandum of understanding to work on cross-border collaboration to nurture a global big data platform.
SDE’s Vice President Lu Yong and COO Shen Xiangyu said in an exclusive interview with The Korea Herald that the importance of big data for business strategies is on the rise, and that the Chinese government is endorsing such exchanges to enrich businesses.
Shanghai Data Exchange’s Vice President Lu Yong (left) and COO Shen Xiangyu (Lim Jeong-yeo/The Korea Herald)
“This is the era of influencer economy. Social media mentions and related data is key to understanding consumer trends,” Lu said.
Even Chinese internet giant Tencent sources big data from SDE, seeking to gain third-party information.
SDE is a major online data marketplace that covers 120 cities in China, covering about 500 million people there.
While KT handles data from about 30 percent of the Korean population -- splitting the pie with competitors SK Telecom and LG Uplus -- SDE pools data from all of China’s mobile communications providers: China Mobile, China Telecom and China Unicom. There are roughly 10 big data platforms in China as of now, but SDE takes up 50 percent of the market share.
While sharing of cross-border data is legally forbidden, the general market information and reports can be traded between Korea and China.
Shen said that more Chinese investors are interested in gaining insight into business conditions in Korea, to which end KT’s new big data platform will be of great interest.
“For example, KT’s Ureca big data, focusing on real estate information, would be helpful to those trying to understand the Korean property market,” he said.
As for SDE, the platform is a marketplace of data where data suppliers and data consumers meet to trade information.
“We don’t process data at all – it is processed from the data supplier side, and not stored on the SDE platform. We never own any data ourselves,” said Lu.
What SDE does, instead, is treat data as a product.
“We are like Amazon, but only that our product is data,” Lu said, “The price of the data is up for bargain between the supplier and the consumer.”
SDE is endorsed by the Chinese government, and has mixed stakeholders of state-owned enterprises and private companies. Its target audience are those most mobile-savvy, aged between 18 and 40.
“It has now become fragmented for the audience. They maybe spend only a couple of minutes of their attention each time they look at their phone,” said Lu.
“Therefore, the businesses need to not only understand who to target but also find out how to deliver their message in that split time the audience’s attention lingers.”
To efficiently target the audience, SDE identifies elements to describe data points: what kind of identification information, how it is classified, for what scenario the data will be used, how frequently it is updated and what value the data holds.
Each data point is given 85 different attributions, such as gender, age, online preferences and location-based information. Through sifting through these attributions, using a technology called XID system, SDE isolates nonpersonified data that companies can use to strategize their business plans while at the same time protecting consumer privacy, or personal identification information.
Protecting PII is the most important and the most difficult task for big data businesses, said Lu.
Moreover, big data can be assets for a business to leverage its social influence for loans.
“When a business tries to loan capital from a bank, the bank can use our big data to ascertain the potential of the business,” Lu said.
“This is a new thing in China, called inclusive finance. For the startups who have difficulty borrowing from the big banks, they can use the government open data to prove the healthiness of their business to leverage a loan,” Lu said.
In 2020, the size of the Chinese data trading market is estimated to account for 3 percent of vertical industries, or niche markets where consumer behavior requires analytical interpretation.
Data trading for online advertising will hit 3 billion yuan ($400 million), and for the finance security insurance market, data trading will account for some 0.1 to 0.3 percent of total loans.
By Lim Jeong-yeo (firstname.lastname@example.org