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E-commerce

Internet access
Besides having globally the highest average internet connection speed, with an online penetration of about 92.7% South Korea ranks as one of the most connected countries in the world. According to a governmental survey, of the nearly 19 million households in Korea, 99.2% have internet access via optical LAN, xDSL, cable modem, mobile or otherwise. Almost 99% of South Koreans go online at least once a week, spending an average 14.3 hours a week on the internet. More than five million Koreans aged 60 and over are browsing the web, over 50% of the age group, mostly for instant messaging (compared to only 30% of the same age group in the U.S.). South Korea ranks sixth in the world in terms of smartphone usage, with a penetration rate of 77.7%. South Korean official sources estimate the number of smartphone subscribers at 47.4 million, although the figure includes users with more than one account. The search engine market is dominated by local players, with Naver holding 74% of the market share, followed by another local search engine - Daum - at 16%. Google has a 10% market share which, despite being negligible, has been growing quickly over the years.
E-commerce market
South Korea is the third biggest e-commerce market in Asia. Domestic online purchases reached US$ 55.9 billion in 2016, up from US$ 47.6 billion recorded in the previous year. According to a report by Research and Market e-commerce sales already made up nearly 20% of total retail sales due to factors such as a developed Internet infrastructure and having the highest Internet penetration rate in the region. Over half of internet users purchased products online and among them, two-thirds made monthly purchases. The most popular categories of items purchased online were travel, clothes and electronics. The degree of m-commerce use in South Korea is impressive: over half of online retail sales in the country came from mobile last year. Convenience is a major driver of m-commerce, with smartphones ranking both as the most preferred device for online shopping and being used more frequently than computers. Popular shopping apps like 11Street and Coupang both had a seven-digit number of users, but eBay Korea still holds the largest market share of sales. Other popular e-commerce sites include Auction, G-market, Ticket Monster (TMON) and We Make Price. Amazon is also active in the market. Online purchases from foreign retailers have been rapidly increasing because Koreans find less expensive prices on overseas websites even after adding international shipping fees and import duties.  Online purchases from foreign retail sites reached US$ 1.6 billion in 2016, with 65% purchased from U.S. online retailers. Although no official data are available for B2B e-commerce, many players have been looking to expand into B2B e-commerce on consumable sales to small and medium sized companies. G-market was the first one to launch a B2B shopping site called ‘Biz on’ in 2012. Auction also has B2B sites called ‘Biz club’ for food ingredients and ‘Biz plus’ for other consumables. Interpark launched ‘I market Korea’, a platform that integrates B2B and B2C services, while Wemakeprice started ‘Wemakeprice Bizmall’ in 2016. With 5.4 million business owners and 3.5 million small and medium-sized companies, the B2B e-commerce market is expected to be very competitive.
Social media
As of the third quarter 2017, out of a population of 51.25 million, 84% of the population were active social media users (around 43 million). 88.3% of internet users aged above 6 use a messenger service and 99.2% of those use KakaoTalk, a local messenger with more than triple the penetration of Facebook Messenger (29.2%) and Naver’s LINE (13%). Almost 30 million users are on KakaoStory, a social network inspired by KakaoTalk, while 26.6 million use Facebook. Instagram has slightly above 10 million active users monthly. Even though South Korea’s social networks are enjoying widespread popularity with mobile users, interest in Facebook among marketers and consumers is on the rise. A study by DMC Media, for example, found that the country’s social media users aged 19-59 spend more time daily with Facebook than with any other social platform, regardless of device type or operating system. In addition, in South Korea companies use Facebook more than any other social platform.

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Actualitzacions: March 2024

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