South Korea E-commerce Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The South Korea E-commerce market is segmented by B2C E-commerce (Beauty and Personal Care, Consumer Electronics, Fashion and Apparel, Food and Beverage, Furniture and Home), and B2B E-commerce.

Market Snapshot

south korea e commerce market
Study Period: 2022-2027
Base Year: 2021
CAGR: 25 %

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Market Overview

The South Korean e-commerce market is anticipated to grow with a CAGR of 25% during the forecast period (2022- 2027). Retail is being rewired by digitally inspired innovations that go beyond channel shift. Owing to the COVID-19 pandemic, new business models have gained traction, and commerce ecosystems have evolved, altering how retailers and brands interact with digitally connected audiences. The digital revolution has resulted in a more convoluted and fragmented retail market during the previous decade. Marketplaces, direct-to-consumer brands, social commerce, live selling, and voice commerce are just a few examples of the various paths to the end consumer.

  • According to International Trade Administration, E-commerce is a significant part of Korea's entire consumer industry, and it is continually rising. Korea is a technologically advanced country, with about 99.5% of Korean households having an internet connection through a computer, mobile phone, or another device.
  • According to a Bank of Korea survey, credit cards are the most popular payment method for clients utilizing personal computers (PCs) and mobile platforms. Electronic payment services via PC and mobile are becoming more popular as online shopping continues to develop. The average daily utilization of the Payment Gateway (PG) service based on credit cards exceeded 16 million. Furthermore, mobile payment and digital wallet services like Samsung Pay and Naver Pay are gaining popularity.
  • E-commerce is driving the Korean retail market forward. Traditional retailing outlets are hurting as e-commerce grows rapidly. Consumers prefer to window shop in conventional stores but turn to retail internet sites to get the greatest bargains and complete their purchases. Convergence with other platforms is one of the most critical trends in internet retailing. Consumers want a one-stop shopping experience that includes product reviews and prices, purchasing, and paying with new online payment solutions associated with the platforms. Internet portal sites, social network services, TV home shopping, and other platforms now all have online shopping functions, and the popularity of their platforms is growing.
  • The majority of people's time and money is spent online. As a result, the rise in cybercrime and cyber dangers is unsurprising. As data theft and security breaches grow, so does the need to improve cybersecurity. Investing in more secure servers and checkout processes can remedy such issues. Consumers, above all, demand assurances about the security of their personal and financial data.
  • To stay relevant in a rapidly digitizing market, Lotte Shopping, one of South Korea's leading conglomerates in the store-based retailing channel, established Lotte ON. This platform unites the online storefronts of Lotte's retail brands. While COVID-19 undoubtedly signaled to the corporation that physical retail locations would be restructured beginning in early 2020, Lotte's Shopping aims to produce a seamless omnichannel capable of integrating its online and offline stores. Lotte ON wants to give customers individualized shopping experiences by making product recommendations based on their previous purchases.

Scope of the Report

Conducting an e-commerce business means fostering relationships and selling information, services, and goods over computer communication networks. E-commerce usually refers to trading goods and services over the internet, which means broader economic activity. E-commerce consists of B2B and B2C and internal organizational transactions that support these activities.

The study also tracks the key market parameters, underlying growth influencers, and major vendors operating in the industry, which supports the market estimations and growth rates over the forecast period in South Korea. The study further analyzes the overall impact of COVID-19 on the ecosystem. The scope of the report encompasses market sizing and forecast for segmentation by B2B and B2C, in which the B2C channel is further segmented by application.

By B2C E-commerce
Market size (GMV) for the Period of 2017-2027
Market Segmentation - by Application
Beauty and Personal Care
Consumer Electronics
Fashion and Apparel
Food and Beverage
Furniture and Home
Others (Toys, DIY, Media, etc.)
By B2B E-commerce
Market size for the period of 2017-2027

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Key Market Trends

Internet Plays a Significant Role in Market Growth

  • According to the Ministry of Science and ICT (South Korea) survey, as of September 2021, almost 97.9% of respondents aged 20 to 29 had purchased products and services (including making reservations) on the internet.
  • According to data from Ookla, internet users in South Korea may have expected 104.98 Mbps is the average mobile internet connection speed via cellular networks at the start of 2022. According to Ookla's data, the Republic of Korea's median mobile internet connection speed rose by 19.42 Mbps in the year leading up to the start of 2022. Such an increase in broadband speed may encourage customers to purchase goods online.
  • Remote working due to COVID-19 is one of the traffic drivers of the internet in 2020. With 5G set to capture a considerable number of early adopters, it is expected to continue high growth in the region. In South Korea, one of the leading adopters of 5G connections in the area, the average monthly data usage per 5G subscriber is more than 25GB, according to Ericsson. The data traffic per smartphone is poised to reach 41GB per month in 2026.
  • The increasing usage of the internet in the region and the developments that are happening with the 5g technology will drive the customers to significantly give thought to the online purchase of goods. 5G, characterized as Enhanced Mobile Broadband (eMBB), is expected to improve mobile internet users with higher speeds and better user experience in dense or high mobility environments in the country.
south korea e commerce market share

Cosmetic and Personal Care is One of the Factor Driving the Market

  • According to the Ministry of Science and ICT (South Korea) survey, as of September 2021, almost 97.9% of respondents aged 20 to 29 had purchased products and services (including making reservations) on the internet.
  • According to data from Ookla, internet users in South Korea may have expected 104.98 Mbps is the average mobile internet connection speed via cellular networks at the start of 2022. According to Ookla's data, the Republic of Korea's median mobile internet connection speed rose by 19.42 Mbps in the year leading up to the start of 2022. Such an increase in broadband speed may encourage customers to purchase goods online.
  • Remote working due to COVID-19 is one of the traffic drivers of the internet in 2020. With 5G set to capture a considerable number of early adopters, it is expected to continue high growth in the region. According to Ericsson, in South Korea, one of the leading adopters of 5G connections in the Asia Pacific, the average monthly data usage per 5G subscriber is more than 25GB. The data traffic per smartphone is poised to reach 41GB per month in 2026.
  • The increasing usage of the internet in the region and the developments in the 5g technology will drive the consumers to significantly give thought to the online purchase of goods. 5G, characterized as Enhanced Mobile Broadband (eMBB), is expected to improve mobile internet users with higher speeds and better user experience in dense or high mobility environments in the country.
 south korea e commerce market forecast

Competitive Landscape

In South Korea, the competition in the E-commerce market has increased as the customer's adoption of online sales channels has grown.The market is moderately fragmented. This growth is aided by an increase in internet penetration. Further, brands such as Coupang Corp, Naver Shopping, and many more expand their reach by providing customer-centric services that enhance customers' online shopping experience.

  • February 2022 - New Vessel has funded an undisclosed seed round led by Naver, CKD Venture Capital, and Wooshin Venture Investment, with participation from Lighthouse Combined Investment and S&C Networks, to enter the South Korean and Japanese markets. The fresh funds will be used to buy Korean and Japanese e-commerce firms as well as hire more brand managers, marketers, and supply chain managers.
  • March 2022 - Una Brands, a Singapore-based e-commerce aggregator, has teamed with KlickBrands, a South Korean peer, to increase its presence in the country. South Korean e-commerce firms will benefit from the strategic relationship as they expand locally and into new Asian markets. Since its start in 2021, Una, one of Asia's major e-commerce aggregators, has grown a presence in Singapore, Australia, India, China, Indonesia, Malaysia, and Taiwan.

Recent Developments

  • October 2021 - Payoneer, a commerce technology firm focused on payments and growth, has teamed up with Coupang, an Asian eCommerce startup, to expand sales potential in South Korea. The partnership will combine Payoneer's technology and expertise with Coupang's payment capabilities, giving Coupang sellers improved cross-border payment options.
  • March 2022 - Citcon Inc., a mobile wallet payment service that enables global commerce at scale, has announced the addition of South Korea and Japan to its worldwide presence. Citcon's global payments gateway now allows merchants to trade with customers in these markets using all local payment options, including over 30 locally issued credit and debit cards and eight popular digital wallets, all through a single payment gateway.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definitions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Industry Attractiveness-Porter's Five Force Analysis

      1. 4.2.1 Bargaining Power of Suppliers

      2. 4.2.2 Bargaining Power of Buyers/Consumers

      3. 4.2.3 Threat of New Entrants

      4. 4.2.4 Threat of Substitute Products

      5. 4.2.5 Intensity of Competitive Rivalry

    3. 4.3 Key Market Trends and Share of E-commerce of Total Retail Sector

    4. 4.4 Impact of COVID-19 on the E-commerce Sales

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

      1. 5.1.1 High Smartphone and Internet Penetration Across the Country

      2. 5.1.2 High Demand of Food Delivery Services

    2. 5.2 Market Challenges

      1. 5.2.1 Data Security

    3. 5.3 Analysis of Key Demographic Trends and Patterns Related to E-commerce Industry in South Korea (Coverage to include Population, Internet Penetration, ecommerce Penetration, Age & Income etc.)

    4. 5.4 Analysis of the Key Modes of Transaction in the E-commerce Industry in South Korea (coverage to include prevalent modes of payment such as cash, card, bank transfer, wallets, etc.)

    5. 5.5 Analysis of Cross-border E-commerce Industry in South Korea(Current market value of cross-border & key trends)

    6. 5.6 Current Positioning of South Korea in the E-commerce Industry in Asia-Pacific

  6. 6. Market Segmentation

    1. 6.1 By B2C E-commerce

      1. 6.1.1 Market size (GMV) for the Period of 2017-2027

      2. 6.1.2 Market Segmentation - by Application

        1. 6.1.2.1 Beauty and Personal Care

        2. 6.1.2.2 Consumer Electronics

        3. 6.1.2.3 Fashion and Apparel

        4. 6.1.2.4 Food and Beverage

        5. 6.1.2.5 Furniture and Home

        6. 6.1.2.6 Others (Toys, DIY, Media, etc.)

    2. 6.2 By B2B E-commerce

      1. 6.2.1 Market size for the period of 2017-2027

  7. 7. Competitive Landscape

    1. 7.1 Company Profiles

      1. 7.1.1 Coupang Corp.

      2. 7.1.2 Naver Shopping

      3. 7.1.3 eBay Inc.

      4. 7.1.4 Amazon.com Inc.

      5. 7.1.5 Gmarket

      6. 7.1.6 Auction.co.kr

      7. 7.1.7 Tmon

      8. 7.1.8 11Street

      9. 7.1.9 SSG.com Corp.

      10. 7.1.10 Apple Inc.

    2. *List Not Exhaustive
  8. 8. Investment Analysis

  9. 9. Future Outlook of the Market

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Frequently Asked Questions

The South Korea E-commerce Market market is studied from 2022 - 2027.

The South Korea E-commerce Market is growing at a CAGR of 25% over the next 5 years.

Coupang Corp , Naver Shopping, eBay, Inc. , Amazon.com Inc, Gmarket are the major companies operating in South Korea E-commerce Market.

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