Market Trends of South Korea E-commerce Industry
Food and Beverages sector to Register Significant Growth
- Food and beverage e-commerce has benefited from the growing demand for online grocery shopping. Although South Korea's vaccination program gradually established an increased level of confidence among local consumers to spend time outside the home by the end of 2021, their regular changes in terms of food consumption, which were greatly influenced by reduced outdoor activities such as work from home and remote learning, supported further strong growth for food and drink e-commerce.
- Foreign food businesses seeking to capitalize on South Korea's e-commerce growth might encourage localization to optimize reach, with the country having sizable per-individual online sales worldwide.
- Moreover, according to the Korean Statistical Information Service (KOSIS), the transaction value of online food and beverage purchases was roughly KRW 7.19 trillion (USD 5.54 trillion) in the first quarter of 2023, a 6.9% increase in sales from the previous quarter, Q4 2022. Over the years, the transaction value has gradually grown. Such a significant transaction value would considerably contribute to e-commerce growth in the country.
- The market has witnessed a significant increase in the internet channel's nationwide percentage of fresh food purchases. However, as consumers' meal preferences have evolved, they increasingly seek out different cuisines as substitutes for Korean-style recipes, buying fresh components such as imported meat and Western veggies or meal packages in small quantities. Such trends are considerably contributing to online food deliveries across various food chains, thereby driving e-commerce sales in the country.
- The accessibility of online grocery shopping is expected to retain current customers, as many of them have grown accustomed to having large grocery items brought to their homes. The growing number of single-person and dual-income households, which fueled the channel's growth before the pandemic, is expected to continue to be the primary driver. At the same time, the influx of new customers, such as older adults, is anticipated to accelerate the rapid growth of food and drink e-commerce over the forecast period.
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Fashion and Apparel sector to Hold Significant Market Share
- South Korea is now regarded as one of the East's most significant emerging fashion capitals, with Seoul Fashion Week becoming increasingly famous. Saturation in the West has caused many businesses to change their emphasis and seek out emerging markets, which is expected to develop the fashion and apparel industries in the country.
- Moreover, South Korea has an economically expanding fashion industry, with several local names accounting for a sizable portion of total fashion sales. Aside from that, Seoul has a powerful impact on street style, particularly among the younger groups.
- Furthermore, South Korea has its own set of patterns and retail and online players. Although there is a strong preference for Western luxury goods, customers in the nation have individual preferences for them. As a result, the strategy for reaching these consumers must be completely tailored to their preferences. South Koreans use a variety of social media applications, both prominent Western and local, which is expected to account for e-commerce revenue generation considerably.
- Local celebrities and pop icons also have a big influence on South Koreans. Moreover, many Western companies use these personalities as brand ambassadors. Their distinct style can influence public opinion and set significant national developments. These trends could potentially attract large players to invest in fashion e-commerce activities to enhance their offerings across the country.
- Consumer demands in the fashion market are becoming increasingly complicated and varied due to increased consumption and rising disposable incomes. Other factors include the growing desire for individuality and personalized fashion, the growth of life-enriching consumption such as leisure and cultural activities, an increase in internet sales, an aging population, and a change in core consumers. Such trends would significantly increase e-commerce sales in the fashion industry.
- Furthermore, according to the Korean Statistical Information Service (KOSIS), the transaction value of fashion products or accessories through online stores in South Korea was expected to be around KRW 3.7 trillion (USD 2.78 billion) in 2022. Online purchases of clothing and other fashion products have gradually grown in recent years, thereby driving e-commerce market growth in the fashion and apparel industries in the country.
