E-commerce

Report summary

Text reads: South Korean market intelligence report 2022 - e-commerce

e-Exporting to South Korea

South Korea’s e-commerce market is thriving and offers British companies huge opportunities. With rising disposable incomes, a technologically savvy and increasingly outward-looking population, and an ICT infrastructure that is the envy of the world, Korea is at the forefront of both domestic and cross-border ecommerce trends.

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Key figures: e-Commerce market £135.48 billion. Projected 2024 e-Commerce penetration rate: 82.7%. Share of mobile e-Commerce: 74.9%
Text reads: Made in the UK, sold to South Korea

British goods enjoy a strong reputation among Koreans and are known for their sophisticated design, quality and heritage. Whereas US e-commerce platforms have dominated the overseas direct purchasing market in Korea until now, market watchers believe that direct purchases from the UK, along with China and Germany, will see substantial growth over the coming years.

The Korean e-Commerce Market

Korea is the world’s fifth largest e-commerce market and APAC’s 3rd largest e-commerce market after China and Japan. In 2023, it also ranked fourth worldwide for retail ecommerce as a share of total retail sales with 25.5%, after China (25.9%), the UK (32%), and Indonesia (28.8%). The industry was worth £135.48 billion in 2023, an 8.3% increase from the previous year. Statista projects the eCommerce user penetration to reach 82.7% in 2024 and grow further to reach 98% by 2028. m-Commerce (Mobile Commerce) constituted 74.8% of total online sales in 2022, or £93.62 billion.

The country’s e-commerce industry is extremely competitive, with open market platforms such as Coupang, Naver Shopping and 11STREET and online shopping malls such as SSG and LotteOn all vying for market share. Among them, Coupang is the most used e-commerce platform, far ahead of its competition. Based on a June 2023 consumer survey, Coupang had a market share of 37.7%, followed by Naver Shopping at 27.2%, Gmarket at 6.8%, 11STREET at 5.5%, Auction at 3.0, and SSG.COM at a 2.3% share.

Korea is also a market dominated by domestic brands – the global giants of e-commerce such as Amazon or eBay have either failed to penetrate the market or to secure a foothold, with Amazon partnering up with 11STREET to enable Korean customers to purchase its goods via the local platform.

It is also important to note the preference for mobile apps over mobile web. In February 2023, two out of three Koreans – or 33.09 million users – were active users of marketplace shopping apps, a 46.3% increase from February 2019.

Cross-border Online Shopping

Many global brands in areas such as fashion, food and beverages, or beauty and cosmetics have enjoyed popularity amongst Korean consumers since as far back as the 1980s. The value of cross-border online shopping was estimated to have reached £4.01 billion in 2023, a 26.9% year-on-year increase. With the growth and diffusion of online and mobile platforms, inexpensive shipping methods, and the UK-Korea FTA soon to take effect, British retailers of all sizes can now address Korean consumers’ needs directly.

Opportunity Areas for UK Companies

British goods enjoy a strong reputation among Koreans and British products are often marketed with specific reference to their origin. There is a clear overlap in the areas in which the UK excels and products that are increasingly sought by Koreans looking to make overseas direct purchases. Key cross-border categories include:

  • Fashion (premium and mass apparel, outdoor wear, accessories, etc.)
  • Beauty and Cosmetics (small-batch cosmetics, organic cosmetics, male grooming, perfumes, etc.)
  • Food and Beverage (health supplements, organic food, confectionery, etc.)
  • Home and Living (home décor, kitchen/tableware, bed/bathroom accessories, pet accessories, etc.)
  • Baby products and Toys (organic/hypoallergenic baby cosmetics, clothes, educational toys, etc.)

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