Competition in South Korea's online market is fierce, with major e-commerce giants "fighting head-on"

Industry data shows that in 2020, the size of South Korea's e-commerce market exceeded US$100 billion, ranking fifth in the world, comparable to the size of the e-commerce market in Southeast Asia as a whole. As of now, its e-commerce market size is still increasing.

At the same time, competition among South Korea's e-commerce giants is also heating up. In order to seize more market share and gain market opportunities , they are gradually increasing their investments regardless of whether they are making losses or not .

It is understood that the investments of these e-commerce giants are mainly concentrated in logistics and marketing.

First is South Korea's local e-commerce giant Coupang, which has recently been raising funds by increasing paid-in capital and mortgage loans. Although Coupang 's sales have been on an upward trend in the past two years, its net profit has been in the red, but it has recently decided to invest more than 1.5 trillion won (US$1.25 billion) to build logistics centers in 10 locations across the country.

Next is Shinsegae Group , the operator of South Korea's comprehensive online mall SSG.com , which will also further increase its investment in the e-commerce market .

South Korea's second-largest retailer plans to invest an additional 1 trillion won over the next four years to increase the number of logistics centers for its e-commerce deliveries after Shinsegae Group acquired eBay Korea for 3.5 trillion won.

Meanwhile, another online shopping platform, 11st, signed a lease contract to use a logistics center in Paju, Gyeonggi Province last month and started operations this month. The logistics center has a construction area of ​​17,517 square meters, which is about five times the size of the logistics center 11st operates in a neighboring area.

In addition, Lotte ON, an online shopping site operated by Lotte Shopping , is increasing its investment in marketing , including issuing discount coupons , with the main purpose of directing some new traffic to the platform.

It is reported that at the end of last year, given that Coupang's accumulated deficit reached 4.75 trillion won, the retail industry expected it to go bankrupt within three to four years.

However, things have changed since Coupang went public on the New York Stock Exchange earlier this year . Backed by the strong financial strength it built through its IPO, Coupang is now leading the e-commerce market in its home country of South Korea .

South Korea

E-commerce market