In an unusual cross-border, public-private partnership called "Korea's Best," 500 products from South Korea will be included in iMall's shopping search engine, Stuff.com, where consumers can buy directly from the manufacturers. Samsung, which is acting as an "intermediary" between iMall and the South Korean government, will create an e-commerce site for the program.
International e-commerce is a largely untapped opportunity, complicated by concerns about customs requirements, foreign exchange, and recourse if a transaction goes awry. To ease fears about trading with overseas merchants, the South Korean government has agreed to guarantee the security of the transactions and delivery of items that U.S. consumers buy from merchants participating in the Korea's Best program.
The program is expected to be up and running in June, according to iMall.
The government's direct involvement owes in part to the fact that South Korea is eager to find new ways increase exports and decrease unemployment, which hit a 17-year high last month as a result of economic restructuring. Nonetheless, it may break new ground for electronic commerce.
The link with Samsung is certainly significant for iMall, which also secured an agreement from the South Korean company to spend $200,000 on advertising on Stuff.com. "It is a toe in the water with a very large company," said iMall CFO Anthony Mazzarella.
iMall hopes to make similar deals with other major manufacturers, which could boost its lackluster financial results. Last week, the company reported fourth quarter revenues of $750,000 and a net loss of $5.4 million; for the year, the loss was $11.1 million on revenues of $1.6 million.
Over the past year, iMall has been moving away from the online mall concept and toward providing e-commerce services for small and mid-sized merchants. It landed a deal with credit card processor First Data Merchant Services, and the two companies will begin offering a joint service called MerchantStuff to First Data's 2 million merchants next month.
iMall set up an online mall in South Korea just over a year ago, Mazzarella said, but it has met with only moderate success.