According to Statistics Korea, in 2020 the online shopping transaction value in Korea marked 161.1 trillion KRW, an increase of 19.1% from 2019.
The rise and growth of Hallyu over multiple decades has made Korean culture to be widely recognized on a global scale - most notably through industries like K-pop, Korean dramas and cosmetics (or K-Beauty). With the help of the thriving e-commerce industry, Korean products have become more in demand and accessible than ever.
South Korea is one of the biggest ecommerce markets worldwide. With sites like NAVER Shopping, Coupang, eBay Korea, Wemakeprice and TMON - Koreans have more choices and reasons than ever shop online. This is a start contrast to a single player that tends to dominate overseas online shopping markets, such as Amazon in the US & the UK and Alibaba in China.
Finally, as a consumerist nation with an internet usage rate of about 92%, Koreans are most likely to turn to the Internet to search for, find and purchase an item or service that they are seeking.
Keep reading to learn about domestic ecommerce trends as well as the growing number of transactions from foreign markets for Korean products.
1. Online Shopping Transaction Value in Korea
In 2020, transaction value of "Culture and Leisure Services" (-69.3%), Travel Arrangement and Transportation Services" (-53.3%) declined.
Online shopping transaction value of "Food Services" (78.6%), "Food & Beverages" (48.3%) and "Household Goods" (44.1%) increased.
Top 3 categories that took the largest share of online shopping transaction value were "Food & Beverages" (12.4%), "Home Electronics and Telecommunication Equipment" (11.8%), Food Services (10.8%).
2. International Online Shopping on Korean Sites
In Q4 2020, the Korea site online sales to foreign users decreased by 18.2% to 1.5 trillion KRW, whereas, the Korean user purchases from foreign sites increased by 25.9% to 1.2 trillion KRW.
Decrease in the Korea site online sales to foreign users was strongly impacted by a sharp drop in online sales of Duty Free online sites.
Online overseas direct sales amounted to 5.96 billion won in 2020, down 0.6% from the previous year. Online overseas direct sales compared to the previous year increased in China (0.9%) and the US (20.5%), but decreased in ASEAN (-31.4%) and Japan (-13.6%).
Records, videos, and musical instruments increased (132.2%) in 2020, compared to the previous year. Cosmetics also increased slightly (1.1%), but clothing and fashion-related products (-32.4%), home appliances, electronics, and communication equipment (-41.4%), food and beverages (-40.7%) saw a decrease compared to the previous year.
3. Korean User Purchases from Foreign Sites
Korean users were reported to making more transactions from foreign sites in 2020 compared to the previous year. The amount of online overseas direct purchases by country increased for every country in this report. The three largest market countries observed were the US (3.5%), the European Union (21.7%) and China (24.4%).
When looking at Korean user purchases from foreign sites, most categories saw an increase in 2020 compared to the previous year. Categories that saw an increase include: Food & beverage products (22.5%), clothing and fashion-related products (11.8%), household goods, and Automotive supplies (34.6%).
In Korea, online retail transactions has become as ubiquitous and as common (if not more) than physically going into a store and purchasing something. For this reason, the ecommerce industry is expected to grow well into 2021 and beyond.
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