South Korea is renowned for its highly advanced internet business landscape, ranking as one of the world's leaders. In 2019, it stood as the sixth-largest eCommerce market globally, boasting a revenue of $74 billion, surpassing countries like Germany and France.
Additionally, the size of the e-commerce market in South Korea is projected to be around USD 2.80 trillion in 2024, with a forecasted growth to USD 6.82 trillion by 2029. This growth is anticipated to occur at a compound annual growth rate (CAGR) of 19.49% between 2024 and 2029.
However, tapping into the Korean eCommerce market presents challenges, including limited information on marketplaces and language barriers. This article aims to shed light on the Korean marketplace environment, offering valuable insights for those venturing into this dynamic market.
Naver Smart Store, an online C2C eCommerce platform owned by the Korean portal giant Naver, focuses on enabling small business owners to participate in the digital economy. One key advantage of establishing an online store on Naver Smart Store is its lower fees compared to the Coupang Rocket partnership. Additionally, Naver has announced that it will waive commission fees for sellers during the first year, aiming to support local small businesses.
Since the onset of the Covid-19 pandemic, Naver Smart Store has experienced significant growth in its seller base. The platform has witnessed a remarkable increase in the monthly average number of new smart stores, rising from approximately 15,000 per month in 2018 to about 35,000 per month in April 2020, more than doubling over two years.
Often dubbed the "Korean Amazon," Coupang stands as one of Korea's largest online retailers. Established in 2010 as a daily deals (coupon) venture, it has since burgeoned into a behemoth valued at over $9 billion. Coupang's triumph hinges on its adeptness in catering to the distinct needs and preferences of local consumers, achieved through the development of an end-to-end eCommerce platform renowned for its unparalleled delivery speed.
A standout feature of Coupang is its acclaimed "Rocket Delivery" service, offering same-day or next-day deliveries, made feasible by the country's high population density and the expansive infrastructure cultivated by the platform. Remarkably, 70% of all Koreans reside within a 10-minute radius of a Coupang logistics center.
Moreover, Coupang has devoted substantial efforts to optimize its mobile interface, ensuring a seamless and enjoyable shopping experience for users accessing the platform via mobile devices.
GMarket, another well-known Korean marketplace, has been under the ownership of eBay since 2009. This eCommerce platform facilitates global trade, allowing users from around the world to engage in buying and selling activities. GMarket made history as the inaugural Korean eCommerce platform to be listed on the NASDAQ in 2006 and was also the pioneer in offering an English website, a feature that garnered significant popularity among expatriates residing in South Korea.
The platform offers a wide array of products ranging from electronics to clothing to technology. With its availability in English, Chinese, and Korean languages, GMarket enjoys considerable popularity among the foreign community in Korea.
11 Street is an e-commerce platform managed by SK, one of South Korea's largest corporations, with a significant presence in both Korea and Malaysia. It's a popular destination for finding attractive deals, coupons, and sales. With a focus on prompt delivery, most products are shipped within 2-3 business days, emphasizing secure transactions and providing seller training. Their extensive product range covers electronics, fashion, beauty, food, health, and furniture.
In 2017, 11Street introduced its cross-border e-commerce platform, extending its services to clients globally.
Entering the eCommerce market in Korea can be challenging for overseas sellers due to regulations and language barriers. Creating an effective product page is crucial for convincing customers to purchase your product, particularly in competitive categories.
Moreover, providing excellent customer service is essential to meet the expectations of Korean internet users, including seamless mobile payment options, responsive customer support, swift delivery, and clear return policies.
If you're considering opening an account on Korean marketplaces but require assistance, feel free to reach out to Pearson & Partners Korea for expert guidance and tailored advice for your specific situation.