South Korean entertainment has taken the world by storm in the past decade. People are crazy about the so-called Korean Wave, including the nation’s TV shows, or K-dramas, and South Korean music, mainly K-pop. Indonesians are no exception.
For instance, Korean K-pop bands BTS and Blackpink topped Spotify’s list of the most-streamed artists in Indonesia in 2020, while the faces of Kim Seonho, an actor in K-drama Start-Up, and Lee Minho, who starred in Boys Over Flowers, graced several advertisement billboards along Indonesian roads. Major e-commerce platforms like Tokopedia and Shopee have also recently signed brand ambassador agreements with BTS, Blackpink, and Stray Kids. Details regarding the business size of those partnerships have not been revealed.
The market size of the South Korean entertainment and media industry amounted to around USD 2.02 billion in 2019, according to Statista. Korean soft power is also highlighted by the over 100 million members of Hallyu, or Korean Wave fan clubs, in 109 countries around the world, according to the Korea Foundation.
The hype around K-pop bands and other celebrities has led many fans to spend big cash on their merchandise, as shown by a recent study by e-commerce aggregator iPrice Group. A loyal fan spends around USD 600 to USD 1,400 per year on official merch, albums, and concerts. However, the report did not break down the data by country, so it is hard to project how much money on average Indonesians spend on these goods.
As the Korean Wave is growing in Indonesia, many are even starting small businesses to jump on the bandwagon, various sources told KrASIA. Elok Putri, a 27-year-old woman from the Sidoarjo regency in East Java, usually makes up to IDR 10 million (USD 690) a month by selling albums and various K-pop and K-drama collectible merchandise online. Putri’s earnings from her online business are more than three times higher than Indonesia’s average wage of IDR 2.83 million (USD 195) per month, according to a 2019 survey by the Indonesia’s Central Statistics Agency (BPS).
“I was fired from my former office, so I started selling K-pop albums to make a living,” Putri told KrASIA. She has been following several K-pop groups since her high school years, and in mid-2020, she began promoting K-pop merchandise through Twitter, where she has more than 10,000 followers.
Here is how it works: sellers like Putri use social networks like Twitter or Line to promote their products and get orders. The final part of the transaction is realized on e-commerce platforms such as Tokopedia and Shopee, where sellers have set up online stores. Marketplace accounts give them business legitimacy while buyers also feel more secure, Putri said. If there’s a problem with the items they ordered, a customer can ask for a refund.
To maintain this business, Putri has to keep track of all popular K-pop bands’ releases, so when a new album goes on sale, she will be one of the first people to make a pre-order request on the band’s official website or online retailers such as Ktown4U or Yes24. She will then post the information on Twitter and find a buyer who will make a down payment—usually half of the final price—through an e-wallet or bank account. Finally, Putri will send the link to her marketplace, where customers can check out their purchases.
Most of Putri’s customers are underage students, who are ineligible to open a bank account, let alone apply for credit cards or a PayPal account—the only ways to pay for orders placed with official websites or online retailers. Asking parents to help to pay for the album is “out of the question,” she said, as parents would likely scold them for the high expense of K-pop merchandise.
“The income from this business is good enough to pay my living expenses, support my family, and my dog. I also still have enough to spend on my K-pop hobby,” she said.
However, like any other business, she has faced challenges along the way, such as “hit-and-run” situations, where customers place an order but don’t pay for it. “I prefer to be grateful even when facing difficulties but still secretly grumble to myself,” Putri said with a laugh.
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A growing entrepreneurial spirit among fans
The Korean Wave industry has been praised for its creativity and brilliant marketing. The industry is employing a “synergy” strategy to promote their idols, Gietty Tambunan, a lecturer for the Cultural Studies postgraduate program at the University of Indonesia, told KrASIA.
“Being a fan or consumer of the Korean Wave means you can’t only buy one product, but you will also consume various other products as the industry automatically conditions it,” Tambunan said.
Collectibles such as photo books, postcards, posters, and photo cards of Korean idols are highly sought after by Indonesian fans, which have spurred a secondary collector market. Some items are usually sold together with physical CDs, while others are from special collaborations with brands or given away at events such as fan meetings.
Consumerism among fans is tightly correlated with collectivism. Fans will share or show off their collection to others via social media, which puts invisible pressure on others to do the same, Tambunan explained. “When someone is joining a fandom community, the sense of community formed with other fans becomes the basis, and a culture of consumerism cannot be avoided,” Tambunan said.
While normal K-pop artists’ photo cards are priced between IDR 70,000 (USD 4.80) and USD 150,000 (USD 10.35), some rare and highly desired cards can be sold for millions of rupiahs, as they are produced in limited quantities. For example, a limited yearbook photo card of Johnny Suh, a member of NCT, a boyband formed by SM Entertainment, was sold for IDR 1.95 million (USD 134.50) in 2020.
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The secondary market also goes beyond Indonesia, as fans are usually looking in overseas markets where there is greater supply and lower prices. However, buying from overseas sellers also comes with high shipping costs and currency conversion fees, which is why fans have created online ordering groups where they can order in bulk to lower shipping costs.
Andina Pratiwi, a 25-year-old office worker living in Jakarta, joined an international K-pop merchandise ordering group in February 2021 hosted on messaging application Line. As a fan of NCT, she wanted to complete her photo card collection but couldn’t get the missing ones in Indonesia. “I found that foreign sellers had more photo cards to sell compared to local ones. Sometimes the price is also lower,” she told KrASIA.
At first, Putri received purchase requests from her friends to share the shipping and currency conversion costs. “Then I thought, why not start my own group?” she told KrASIA.
Her Line group, which she launched in early February 2021, now has 352 members who regularly place orders for photo cards, postcards, or even secondhand albums that Pratiwi usually buys from South Korean sellers. Pratiwi works with two administrators in charge of looking for photo cards and other items for sale, mainly on Twitter. The admins will then post pictures of collectible items together with a preliminary price, usually in won, along with the item conditions, letting buyers place their orders.
After accepting an order, Pratiwi will conduct the transaction with the South Korean sellers, and once done, buyers can check the final price on the group’s notes created by the admins. Pratiwi charges a 10% premium on average, she said, not including the delivery fee. Since launching, the group has processed more than 200 orders in only two months, although Pratiwi didn’t disclose how much income she generates from this business.
To get the goods, Pratiwi relies on a network of Indonesians in South Korea, who receive the parcels from Korean sellers at their place and then deliver the goods to Indonesia. Once Pratiwi receives the items, the final transaction is conducted on e-commerce platforms like Shopee and Tokopedia.
“Buyers usually ask if they could check out via Shopee because it offers many free delivery promotion events,” said Pratiwi. Her group members are scattered across Indonesia, from Jakarta to eastern Indonesian cities, so the shipping cost to cities outside Jakarta can be very high, but users frequently profit from e-commerce platforms’ delivery promotions.
It is unclear how many online Korean Wave ordering groups are active in Indonesia. However, a Twitter search using keywords related to K-pop items will show thousands of results, mostly redirecting to online ordering groups.
Like Putri, Pratiwi has also experienced “hit-and-run cases” that have affected her business. “It is pretty hard because sometimes there are buyers that purchase cards above the average price but then don’t pay for them. Unless some other buyer is really desperate, they won’t buy for the cards at that price, so I have to lower it,” she said.
Pratiwi is looking to add more items to her offerings, including pre-orders for albums. “But for now, I’m going to promote my group more on Twitter and Line to get more members,” she said.
As for Putri, the K-wave influence has also taken over her diet, which spurred another vertical for her business in 2021: homemade Korean street snacks food delivery, thanks to intercity delivery services like Indonesian logistic startup Paxel. She saw the opportunity in the lack of available Korean food in her small hometown, but said she has even sent snacks to customers in Jakarta, which is 780 kilometers from her city.
“It doesn’t only give me material benefits such as money, but also lets me gain more friends and fellow K-pop fans. My mental state is also more stable. Now, I get to do what I like, earning money from my hobby,” she said, adding that the best benefit is that she’s learning how to run a business, which started as a hobby.
This article is part of KrASIA’s “Tech in Culture” series, where KrASIA writers unpack how tech is changing the status quo across Asia.
