South Korea’s e-commerce market to grow by 10.2% in 2024, forecasts GlobalData. Source: Shutterstock.com

South Korea is rapidly emerging as a significant player in the e-commerce space and is expected to grow by 10.2% to reach KRW164.3trn ($125.8bn) in 2024, forecasts GlobalData, publishers of EPI.

GlobalData’s E-Commerce Analytics reveals that South Korea e-commerce market registered a strong CAGR of 12.6% between 2020 and 2023 to reach KRW149.1trn ($114.2bn) in 2023. This upward trajectory is anticipated to continue in 2024.

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Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “South Korea boasts a robust e-commerce market supported by high-speed internet infrastructure, secure online payment options, and a growing trust among the consumers in the realm of online shopping. Events such as Black Friday and Cyber Monday have supported the growth of e-commerce. The availability of alternative payment solutions that offer security and convenience is also boosting online purchases.”

To capitalise on the growing e-commerce market, international brands are venturing into this space

For instance, Chinese fashion online fashion retailer Shein launched its Korea-dedicated online platform in June 2024.

Similarly, in June 2023, YouTube launched its inaugural online shopping channel, where products are live-streamed in the Korean language. Additionally, to boost e-commerce sales, YouTube partnered with the e-commerce platform Coupang to introduce the Shopping affiliate program in June 2024. This new feature allows YouTube content creators to tag products from affiliated brands or shopping sites in their videos. If viewers click on these tags and make a purchase, the creators will receive a commission.

The frequency of shopping online is high among the consumers in South Korea with 79% indicating buying something online in the past month and only 6% never shopped online, according to the GlobalData’s 2024 Financial Services Consumer Survey.

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In terms of product and service categories, food and drink rank first in terms of online transaction, highlighting the high level of comfort consumers have buying everyday essentials online. 92% of the respondents indicated buying food and drinks (including groceries and other supermarket products) online in the past month. Also, a high percentage (78%) of respondents paid for food and drinks online for restaurant orders and takeaways.

To cater to the rising demand for online grocery deliveries, food delivery app Coupang Eats launched free delivery for Coupang WOW members in March 2024.

Sharma concludes: “South Korea’s e-commerce market looks promising supported by the growing consumer preference for online channel, improving payment infrastructure, proliferation of alternative payment solutions. The market is expected to register a healthy compound annual growth rate (CAGR) of 7.8% between 2024 and 2028 to reach KRW222.1trn ($170.1bn) in 2028.”