Hundreds of billions of dollars! East Asia's e-commerce market is accelerating

With the widespread popularization of the Internet around the world, more and more consumers are turning to online platforms for shopping, which has led to the rapid development of the global e-commerce industry.

According to Forrester's forecast, by 2028, global online retail sales will approach US$7 trillion, reaching US$6.8 trillion, a growth rate of 54% compared to US$4.4 trillion in 2023, with a compound annual growth rate of 8.9%.

Among them, the development speed of e-commerce in the Asia-Pacific region is particularly impressive. According to data, the scale of the e-commerce market may exceed 3 trillion US dollars by 2028. In particular, the three East Asian countries - China, Japan and South Korea - have a more rapid growth momentum.

South Korea's e-commerce market is worth $100 billion

The Korean market to be introduced in this article has gradually emerged in the global e-commerce landscape in recent years. As a rising star in the Asia-Pacific e-commerce field, it is making great strides forward.

Recently, GlobalData, a global market research company, released its latest research report on the Korean e-commerce market. Currently, the Korean e-commerce market is developing at an astonishing speed. In 2024, its scale will reach 164.3 trillion won (about 116.9 billion U.S. dollars), compared with 149.1 trillion won (about 106.2 billion U.S. dollars) in the same period last year, a growth rate of 10.2%.

GlobalData also predicts that by 2028, the size of South Korea's e-commerce market is expected to further expand to 222.1 trillion won (about US$158.1 billion), and the average annual growth rate of the market will reach 7.8% between 2024 and 2028.

In this regard, Ravi Sharma, payment analyst at GlobalData, said, "The rapid growth of South Korea's e-commerce market is mainly due to the country's relatively complete Internet infrastructure, secure online payment functions and consumers' growing trust in online shopping platforms. In addition, large-scale promotional activities such as 'Black Friday' and 'Cyber ​​Monday' have also played a significant role in promoting the growth of its scale."

Specifically, on the one hand, South Korea is one of the countries with the highest Internet penetration rate in the world. Last year, the total number of local Internet users reached 50.56 million, with a penetration rate of 98%. Among them, the household Internet connection rate is 99%, and the proportion of users using social media accounts for 92%.

On the other hand, with the widespread popularity of smartphone users in South Korea, online shopping has become more and more popular among local consumers, and people's dependence on it is also growing. The latest survey shows that 79% of respondents have used online shopping in the past month, and only 6% of consumers said they have never used e-commerce platforms for online shopping.

Another point that must be said is that the increase in the number of online shopping consumers has also driven a sharp increase in online transaction volume in this market.

Data shows that in the first half of this year, South Korea's online shopping transaction volume reached 120.4 trillion won (about 85.7 billion U.S. dollars), a growth rate of 9.7% compared with 109.8 trillion won (about 78.1 billion U.S. dollars) in the same period last year. Moreover, in the first quarter of this year alone, the market's online transaction volume has reached 59.6 trillion won (about 42.4 billion U.S. dollars), a growth rate much higher than market expectations.

It can be said that the above-mentioned multi-faceted performances have laid a solid foundation for the development of the local e-commerce market scale.

Backed by "hot land", the performance of multiple platforms soared

With its ever-expanding development potential, the Korean e-commerce market continues to attract a large number of players. Moreover, relying on this blue ocean market, many platforms have achieved quite impressive results.

In June this year , Shein officially announced its entry into the Korean market and stated that its Korean official website had been officially launched at the end of April. It is reported that the product categories sold on SHEIN's Korean official website include clothing, shoes, accessories, beauty products, etc. Among them, the clothing category has captured the hearts of many consumers with labels such as "low price and diversity".

According to data from Mobile Index, within one month of the launch of SHEIN's official website, the number of monthly active users has reached more than 660,000, an increase of 10.3%. In this regard, some Korean fashion officials said that they cannot rule out the possibility that SHEIN will become the leader of domestic fashion apps in South Korea.

Temu, which entered the market in July 2023, once again became the number one app in terms of new downloads in South Korea with 868,000 downloads in September this year. Instagram and TikTok Lite ranked second and third, with 760,000 and 707,000 new downloads respectively.

In fact, Temu has only been in the Korean market for more than two months, and it has already topped the list of new APP downloads in the local market. In June and July of this year, it also topped the list of new downloads for two consecutive months. With the strong rise of Temu in Korea, the local freight volume also surged, and in the first five months of this year, it set a record high since 2009.

In addition, AliExpress, which entered South Korea in 2018, also occupies an important position in the South Korean e-commerce market. In addition to Chinese e-commerce platforms, the performance of giants Amazon, YouTube and local e-commerce platforms cannot be ignored.

Take Amazon, for example. As early as 2021, Amazon announced a partnership with 11 Street to sell products to Korean consumers. In April this year, Amazon also announced that it would provide free delivery services for Korean orders worth more than 68,000 won (small daily necessities to large household appliances are eligible).

Among local e-commerce platforms, Coupang, as one of the largest e-commerce platforms, is not only known as the "Amazon of Korea", but also ranks first with a market share of 24.5%. Last year, its net revenue reached US$24.4 billion, with more than 21 million monthly active users and more than 14 million paid WOW members, ranking first in Korean e-commerce. Its website covers categories including electronics, beauty products, books, baby products, household goods, decorations, toys, sporting goods, etc., and is very popular among local consumers.

It is worth mentioning that South Korea's blue ocean market has not only attracted major e-commerce platforms to rush in, but also for cross-border sellers. One industry insider pointed out that "today, South Korea has developed into a fertile land full of opportunities, and will attract more players in the future."

For sellers who want to enter this market, they may wish to pay more attention to categories such as food and beverage, beauty and skin care, business and industry, entertainment peripherals, automotive supplies, fashion and accessories. According to the survey, in terms of product and service categories, food and beverage is the category with the highest online transaction volume, and 92% of respondents said that they had purchased food and beverages through online platforms in the past month.

Overall, the Korean e-commerce market will continue to grow rapidly in the future, and both platforms and sellers are likely to seize new opportunities in this "hot land". However, it must be noted that due to factors such as rising prices, interest rates, and exchange rates, Korean consumers' shopping concepts are constantly changing. Platforms or sellers must follow the trend and actively innovate in order to break through the waves in this blue ocean market.