E-commerce

Ryou Jung Hye approaches a counter in a fashionable department store, focuses her digital camera and, with a silent click, captures the frilly purple top and the pearl-encrusted costume jewelry on display. Like any fashion designer, Ryou is looking for inspiration for her next collection. But you'll never see mannequins strutting her stuff down a runway. Ryou is head of marketing for popular Korean Internet portal www.freechal.com, and one of her jobs is to dream up virtual fashions and accessories for avatars, cartoon characters that stand in for a user online. When you use Freechal, you can outfit your avatar in a range of styles: punk rocker, gangster, curvy superhero. To do so, though, you have to pay real-world cash. Says Ryou: "Romantic is going to be big this spring."

Korea boasts a bevy of start-ups like Freechal that turn a profit by selling digital content on the Internet and mobile data networks. The nascent sector is one of the reasons Korea's economy is becoming more diverse and self-sufficient. Top-notch infrastructure is underpinning job growth: high-tech start-ups have generated more than 100,000 jobs in the past few years.

Korean consumers have an affinity for e-commerce—thanks to the wildfire popularity of online gaming, shopping and stock trading—that is creating markets where none previously existed. These days, nobody would dream of visiting a chat room in the default get-up. Freechai's male customers are a bit conservative, says Ryou, but women like to go wild, taking fashion dares they wouldn't risk on a real boulevard. So she takes ideas and jacks them up a bit for cyberspace. Explains Ryou, who dons baggy hip-hop pants, a red tank top and bright yellow hair when she logs on: "People want their avatars to be flashier than they are in real life. When we did swimwear, there were guys who would go around in trench coats with just their bathing suit on underneath."

A graduate of Seoul National University, Ryou might have opted for a more traditional job in a big conglomerate. (Her parents wanted her to be a doctor or lawyer.) Instead she spends her days wandering shops and department stores, flipping through magazines and checking out popular TV dramas for the latest fashion trends to bring to the Internet. Her parents still don't get it. They often ask her: "Why would anyone pay for this?" Don't worry folks: pay they do. And Korea's ahead of the rest of cyberspace in finding new ways of making money.