A Lesson from the Shutdown Notice of Cyworld

Posted by Pei-chieh Chen on
Sunday, November 22nd, 2009 at 9:01 pm

cyworld_logo

In the MCDM program, we study many positive examples of digital media. Now I would like to share information about the shutdown of Cyworld, a negative example of brand management and customer service in social media.

As the largest social networking site in South Korea, Cyworld started reaching an overseas market in 2006. Local offices were launched in the U.S., Taiwan, Japan and China. However, Cyworld’s big dream of globalization crashed in 2008. Most local offices were closed, but those services were still maintained by Cyworld headquarters in South Korea. Then in early November this year, an announcement of the closure of the Cyworld U.S. service was posted on its U.S. website and mailed to its American members. The content was poorly written and full of grammatical errors, as reported by TechCrunch. The same embarrassing thing also happened with the closure notice for Cyworld Taiwan: inappropriate phrases, grammar errors and bad layout. For loyal Cyworld users, the shutdown notices were rough and thoughtless.

What have I learned from Cyworld? First, the closing should not have happened. Chris Anderson’s book, Free: The Future of a Radical Price, states that technical costs such as storage and bandwidth are approaching zero, which makes web services become free. Cyworld isn’t disappearing completely; the South Korea and China sites are stable enough. The removal of diaries, photos and other data was frustrating for users of Cyworld sites that were shut down. They should have been provided with an appropriate tool to copy all of their data.

Secondly, Cyworld failed to do customer service. The poorly written shutdown notices are one example. The notice should guide users to the Korean service since their local service will not be available. Many users register for Cyworld because of their interest in Korean pop culture. One of the reasons that Cyworld failed in most of their overseas markets is that the local service couldn’t connect to the Cyworld Korean service, leading to user disappointment. If Cyworld supported multi-language services, it won’t lose so many members globally.

The Cyworld U.S. shutdown notice does not only show the loss of Cyworld’s international markets; it also displays bad branding and marketing. Having strong branding and marketing is especially important to companies in the digital age.

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6 Comments, Comment or Ping

Darien

I wouldn’t expect anything less from SK Telecom (Cyworld’s parent company in Korea). Just look at how Korean telecoms have handled the smartphone market, which hasn’t taken any cues from the outside world. They’ve dragged their feet on the app market, and still just fill their app stores with products that they tell themselves people will want; third party developers and users themselves have, up to this point, played little to no role in driving the evolution of the mobile app medium.

Five years ago, Korea seemed like an emerging IT powerhouse. Today, it feels like a wasteland of dated and failed ideas.

Nov 23rd, 2009
Zachary Midles

Branding and marketing are incredibly important in any business. It can make or break your company. In the article “A lesson from the shutdown notice of Cyworld,” the article ends with “having strong branding and marketing is especially important to companies in the digital age.” The branding is important because if your company is branded incompetent, they will not survive. With the dramatic grammatical errors that Cyworld was showing in its American markets website, they branded themselves as unable to properly communicate with people who speak English and were consequently shut down because of it. Granted they had a lot of visitors each day in the American market, but they may only hurt their brand more because more people are aware of how weak in grammar they are.
While it is hard in the digital age to slow down expansion because the World-Wide-Web makes it seem very straightforward, companies have to be careful with going to fast and being branded incompetent. Even with the new digital age where practically any website can exist, a company must still have good grammar to be taken seriously.
While the website Cyworld could have stayed up because costs are extremely low, I do believe a lesson can be learned from this. That lesson is if you want to expand on the world market, put your best foot forward, and make sure that you are using appropriate grammar. Otherwise you will not be taken seriously and will be shut down.

Nov 25th, 2009
Elizabeth Noagi

Branding and marketing are important but they are not as important as understanding your customers. Cyworld went global, but they were thinking local. Just because a strategy works in Asia, doesn’t mean that it will work in Europe, the Americas or any other continent you pick. When making a plan to cross international boundaries, we have to allow for differences in cultural perspectives and language. Plus, successful companies that go international have more than a great plan. They have the wiliness to develop a new persona that fits the needs of their new audience. Pepsi in the states isn’t advertised the same as Pepsi in Europe or the Middle East. In fact, based on taste their recipe is either different or maybe it’s just the minerals that find themselves in the local waters that feed their factories.

Nov 26th, 2009
-AntikA-

I agree with Elizabeth that to be success on global level, the company needs to understand their customers in each area. There are no standard rules for any business to use to work in every country.

Even the global product such as Coca Cola or Mc Donald, be reminded that food is the basic need for everyone, they also have to adjust their products to meet the local need. The Coca-Cola has many tastes for selling around the world. Mc Donald in Thailand has a special menu for serving Thai people who love spicy food.

Cyworld is more complicated than those products because it is service. The customers have different preferences on the service depending on their lifestyles and behaviors. The website users are not only require the different languages but also different website layouts and content.

If the website like Cyworld wanted to be success on global level, it should conduct the hard work research to understand their new customer, and also conduct strong supporting team, including translator team to work along with the service. Thus, the website will have to invest a lot of money and could not provide the free service as in its original country.

Nov 28th, 2009
Pei-chieh

Hi Elizabeth and Antika,

I agree with you. Cyworld’s lack of localization lead their failure in overseas markets. However, they did try to localized but failed. They owned local companies and have localized interface for each website. However, most people joined the service because their likeness about Korean culture. They feel disappointed when they found out the service isn’t globalized enough.

On the contrary, Facebook becomes globally without being much localization. They don’t have local offices. The interface of the website stay same for each countries. All they did is providing multiple language. So I think it’s hard to decide a web service should go global and local.

Nov 29th, 2009
Jim Hong

Are you sure this was a branding failure (combined with poor localization)? My understanding of the CyWorld product is that it is a social network with a strong sense bend towards chat, etc. This isn’t the kind of thing that has seen a big foothold in the U.S. If you look at another Korean company – NCSoft – you’ll find that their product does considerably better, and I think it’s because their gaming products maps more closely to what U.S. audiences are looking for. I wonder if this is more an issue of the product not being what U.S. audiences are interested in currently?

Dec 8th, 2009