South Korea e-commerce sales are forecast to register a strong compound annual growth rate of 7.7 percent over the next four years, to reach KRW 202.6 trillion (USD 160.4 billion) in 2027, as the Asian nation continues to evolve as a major e-commerce market.
According to a recent report by research firm GlobalData, the South Korean e-commerce market has been on growth trajectory over the last five years, registering a CAGR of 17.4 percent between 2018 and 2022 to reach KRW 136.6 trillion in 2022. Looking ahead, this trend is expected to continue in 2023, with e-commerce sales expected to grow by 10 percent, added the firm.
South Koreans are avid online shoppers with over 80 percent of the consumers reported to have shopped online in the past six months, while only 10 percent indicating that they never shopped online, according to GlobalData’s 2023 Financial Services Consumer Survey.
Driving the online coup is the the availability of new and innovative modes of online shopping, such as video live streaming. South Korean e-commerce giant Naver leads this space by enabling merchants to live stream their products on its ‘Naver Shopping Live’ platform, where customers can view the product details, interact with the seller and buy from the platform on real-time.
Meanwhile, international brands, like YouTube, are also venturing into this space, contributing to the e-commerce growth in the country. In June, the U.S. media giant launched its first official online shopping channel in South Korea.
“South Korea has a well-developed e-commerce market supported by high-speed internet, rising smartphone penetration, availability of secure online payment systems and increasing consumer confidence in online shopping,” said Shivani Gupta, senior analyst banking and payments at GlobalData.
The report also added that Koreans increasingly prefer shopping online for day-to-day products, a trend that continued post Covid-19. Everyday essentials such as food and drinks account for nearly one fourth of the e-commerce purchases by value in 2023, while clothing and footwear account for 12.2 percent.
“South Korea’s e-commerce market registered sustainable growth during the last five years,” added Gupta.
“The uptrend in e-commerce sales is likely to continue over the next few years supported by the growing consumer preference, improving payment infrastructure, and growing popularity of innovative online shopping modes.”
Source: Retail in Asia