8 key facts about South Korea e-commerce

www.chandlernguyen.com Mar 2016

1. South Korea e-commerce market is the 6th largest worldwide (behind China, the US, UK, JP, Germany)

Sout

h Ko

rea

e-co

mm

erce

sal

es (B

illion

s)

$0.00

$15.00

$30.00

$45.00

$60.00

2014 2015 2016 2017 2018

$12.7$11.5$10.3$9.1$8.0

$50.6$46.6

$42.8$38.9

$35.0

Retail ecommerce sales Digital travel sales

Source: eMarketer 2015 data

Note:

Retail e-commerce sales includes products or services ordered using the internet via any device, regardless of the method of payment or fulfilment; excludes travel and event tickets; converted at the exchange rate of US$1=KRW1,053.31; eMarketer benchmarks its South Korea retail e-commerce sales figures against Statistics Korea, for which the last full year measured was 2014

Digital travel sales includes leisure and unmanaged business travel sales booked via any device; converted at the exchange rate of US$1=KRW1,053.31

2. There are 25M digital buyers in South Korea, 58.3% of the total population (South Korea penetration is higher than China, but lower than the US, UK, Germany and JP)

Dig

ital b

uyer

as

% o

f tot

al p

opul

atio

n

0.0%

17.5%

35.0%

52.5%

70.0%

0.0

7.5

15.0

22.5

30.0

2014 2015 2016 2017 2018Digital buyers Digital buyers (% of population)

68.6%65.3%

61.7%58.3%

54.1%

29.828.3

26.725.0

23.1

54.1%

58.3%61.7%

65.3%68.6%

Source: eMarketer 2015 data

Note:

Digital buyer: ages 14+; internet users who have made at least one purchase via any digital channel during the calendar year, including desktop/laptop, mobile and tablet purchases

3. South Korea has the second highest percentage of retail m-commerce sales in the total retail e-commerce sales world wide

Ret

ail m

com

mer

ce s

ales

(% o

f tot

al re

tail

ecom

mer

ce s

ales

)

0.0%

17.5%

35.0%

52.5%

70.0%

2014 2015 2016 2017 2018

38.1%

49.7%

55.5%

61%

66.3%

32.9%

46%50.2%

54.8%

59.8%

KR CN US UK

Source: eMarketer 2015 data

Note: Retail e-commerce sales includes products or services ordered using the internet via any device, regardless of the method of payment or fulfilment; excludes travel and event tickets; converted at the exchange rate of US$1=KRW1,053.31; eMarketer benchmarks its South Korea retail e-commerce sales figures against Statistics Korea, for which the last full year measured was 2014 Retail m-commerce sales includes products or services ordered using the internet via mobile devices (including sales on tablets), regardless of the method of payment or fulfilment; converted at the exchange rate of US$1=KRW1,053.31

4. In South Korea, female are more likely to buy online than male (57% vs. 50%) and close to 80% of respondents between the age of 20-40 year old have purchased online in the past year

Methodology: Data is from the December 2015 Korea Internet & Security Agency (KISA) and Ministry of Science, ICT and Future Planning (MSIP) - South Korea report titled "2015 Survey on the Internet Usage - Executive Summary." 63,218 respondents ages 3+ from 25,000 family households in South Korea were surveyed face-to-face via home visits during August 1-October 15, 2015.

5. Travel, home electric appliances and clothing are the top 3 e-commerce categories in terms of sales in South Korea and digital buyers are increasingly purchasing them on Mobile devices

6. South Korea is, however, behind other developed markets like the US, UK or China when it comes to payment systems with many digital buyers are still using direct debit or bank transfer using ATM

Comment from eMarketer in the report “Global e-commerce platform 2015 “: “In fact, it was not until March 2015 when the government ended its requirement of Microsoft’s archaic ActiveX software to pay for goods and services online. A few large companies in South Korea, including Daum Kakao (which owns messaging app Kakao Talk), search engine Naver and electronics company Samsung, have announced their own online payment systems.”

7. Similar to other markets like China, Hong Kong and Taiwan, Social commerce is getting big in South Korea with 2/3 of internet users participating in it. Also the device of choice is smartphone

8. Gmarket, 11st.co.kr, Auction.co.kr are the top 3 e-commerce sites in South Korea in terms of unique visitors

Appendix

Over the year, smartphone is becoming a main device used to make digital purchase (43% in 2013 to 68% in 2015)

Compared with other countries in APAC, digital buyer in South Korea also use smartphone quite a lot for both research (76%) and purchase (67%) online