The South Korea e-commerce market is set to surpass KRW222.1 trillion (USD170 billion) in 2028, thanks to an expected compound annual growth rate (CAGR) of 7.8 percent over the next four years.
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According to GlobalData, South Korea’s e-commerce market registered CAGR of 12.6 percent between 2020 and 2023 to reach KRW149.1 trillion in 2023, with the strong growth expected to continue in 2024, with e-commerce sales set to increase 10.2 percent to reach KRW164.3 trillion this year.
The strong online sales growth makes South Korea the fourth-largest market in the Asia-Pacific region for e-commerce in value terms, behind China, Japan, and India, the research firm added.
“South Korea boasts a robust e-commerce market, supported by high-speed internet infrastructure, secure online payment options, and a growing trust among consumers in the realm of online shopping,” said Shivani Gupta, senior banking and payments analyst at GlobalData.
“Furthermore, the country has witnessed significant digital retail advancements, including the utilisation of drones and robots for deliveries, AI-driven personalisation, and the emergence of live stream shopping.”
The rise in e-commerce sales has seen several international brands venture in the Korean online shopping space this year, including Chinese fast-fashion giant Shein, which launched its Korea-dedicated online platform in June.
E-commerce companies are also using live streaming to reach out to larger customer base in Korea. Last year, YouTube launched its inaugural online shopping channel in South Korea, where products are live streamed in the Korean language.
YouTube partnered with local e-commerce platform Coupang to introduce the Shopping affiliate program in June this year, allowing YouTube content creators to tag products from affiliated brands or shopping sites in their videos.
In terms of payment methods for online, cards lead the way in South Korea with a combined market share of 54.3 percent in 2023, according to the GlobalData’s 2023 Financial Services Consumer Survey.
Among the card types, credit and charge cards accounted for a 48.5 percent share in 2023, while alternative payment tools are gaining popularity, accounted for a 32.9 percent share in 2023 with popular brands being Samsung Pay, Naver Pay, and China UnionPay.
“South Korea’s e-commerce market is poised for rapid expansion in the immediate future. This can be attributed to the growing consumer preference for online channels, improving payment infrastructure, proliferation of alternative payment solutions and growing popularity of innovative online shopping modes,” concluded Gupta.