South Korea’s e-commerce landscape, expected to reach USD 160.4 billion by 2027, has firmly established itself as a robust platform facilitating transactions across diverse sectors and platforms. With the advancement of e-commerce and logistics infrastructure, delivery services have significantly improved in speed and efficiency. Notably, South Korea’s delivery and logistics companies rank seventh globally. Companies such as CJ Logistics, Korea Post, and Lotte Global Logistics are among the top providers, offering secure and fast delivery services.
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Within South Korea’s industrious culture and bustling lifestyle, online shopping is highly esteemed for its value and time-saving advantages. According to a 2022 survey, a substantial 74% of Koreans prioritize online shopping, driven by its inherent convenience and time-saving attributes. This behavior isn’t limited to younger demographics as older individuals are also embracing online purchasing amid South Korea’s aging population,. This trend emphasizes the need for brands to expand on the e-commerce platforms in South Korea to tap into evolving consumer behavior and market opportunities.
Leading e-commerce platforms in South Korea
B2C: Coupang is the most popular e-commerce website in South Korea
Founded in 2010, Coupang (쿠팡), often hailed as the “Amazon of South Korea,” stands as the largest e-commerce platform in the country. With a staggering 385.83 million website visits in December 2023 and an impressive 20 million active users as of Q2 2023, it has secured its top position among e-commerce platforms.
Coupang’s success largely lies on its fast delivery services. Its “Rocket Delivery”, a next-day delivery service, has made it a preferred choice, particularly for the bustling schedules of the Korean populace. It operates its own logistics network, ensuring customer satisfaction through reliable and prompt next-day deliveries. In 2019, it also launched “Rocket Fresh” service, offering next-day delivery of fresh groceries, transforming the way customers access essential items without leaving the comfort of their homes.
C2C: Naver has all functions needed to shop and search
Naver, the top search engine in South Korea with 40 million active users, entered the e-commerce industry in 2001 and since then it has become the second most popular e-commerce platform with a market cap of USD 24.30 billion in January 2024. Its e-commerce platform Naver Shopping (네이버 쇼핑) is notable for seamlessly integrating e-commerce services within the platform, allowing consumers to buy products without leaving the platform.
For brands, the integration provides a streamlined avenue for them to implement marketing strategies directly within the platform. Whether through promotions, featured listings, or sponsored content, brands can efficiently reach their target audience without the need for external marketing efforts. Moreover, most of the e-commerce platforms in Korea offer a “Naver Pay” function, which allows the buyers to conveniently proceed with the transaction online without entering their card numbers every time they pay.
D2C: SSG.com is trusted luxury shopping platform of Korea
SSG.com is the e-commerce platform of South Korean chaebol Shinsegae Group. It has more than 24.5 million active users and is the sixth top e-commerce and retail shop platform in South Korea. In 2022, the sales revenue of SSG.COM amounted to USD 1.3 billion, making it the third most successful online shopping platform.
Even though SSG retails a wide range of products such as apparel, food, fashion goods, and others, it is most famous for its leadership in South Korea’s luxury goods market. SSG Luxury provides an exclusive delivery service for customers purchasing select high-end watches, jewelry, and bags. This premium service, offered in collaboration with Valex Expert Cargo, a Korean logistics company specializing in cash/valuable-in-transit (CVIT) services, ensures swift door-to-door delivery with an enhanced level of security through dedicated drivers. Moreover, SSG.com’s user-friendly features, like the “SSG lens” for convenient product search, allows customers to search for a product by taking a picture of it. This makes the web search convenient, driving the traffic for the website.
Deal commerce: TMON is popular for its deals and sales
Established in 2010, TMON has emerged as one of South Korea’s most successful startups, positioning itself as a key player in deal e-commerce. The platform encompasses a diverse range of categories, including electronics, lifestyle products, books, games, and household items, collaborating with a vast network of over 15,000 merchants. Notably, TMON experienced a substantial surge in popularity, recording over 12 million visits to the platform in December 2023, with a consistent monthly growth rate of 3%. What distinguishes TMON is its exceptional deals. It regularly providing discounts that make its prices notably more affordable compared to other online shopping platforms, contributing to its sustained success in the dynamic South Korean market.
Q-commerce: Baedal Minjok is the most used food delivery platform for consumers and restaurants
Baedal Minjok takes center stage in the realm of Quick Commerce (Q-Commerce) as a prominent food delivery platform in South Korea. Boasting a user base of 20 million, the platform collaborates with an impressive 140,000 registered restaurants, offering a diverse range of culinary delights through its app.
In a nation where dining out and food delivery are ingrained habits, the convenience of smartphone applications for ordering has witnessed a notable surge. A significant portion, approximately one in two South Koreans, now opts for mobile apps multiple times a month for their delivery food orders, with fast food, particularly fried chicken, emerging as a popular choice. According to a survey on delivery expenditure, over 70 percent of respondents spend up to KRW 100,000 on delivery food per month on average.
Online grocery: Market Kurly’s seemingly quick success lies in its fresh and overnight delivery
Kurly (컬리), a significant player among South Korea’s e-commerce platforms, stands out as an online premium grocery service catering to both local and international culinary enthusiasts. In November 2022, it expanded its beauty sector by opening Beauty Kurly.
Established in 2015, the platform has rapidly gained popularity, amassing a user base of 10 million, with over 2.4 million monthly active users. Its user-centric approach, emphasis on quality, and substantial valuation not only solidify its current market leadership but also signal potential for further growth and innovation.
Market Kurly specializes in delivering high-end desserts, fresh bread, milk, bottled water, condiments, and an array of processed foods directly to consumers’ doorsteps. Beyond merely offering groceries, the platform is committed to providing a seamless and top-tier culinary experience.
Reflecting its success, Market Kurly’s valuation soared from KRW 2.5 trillion in the Series F funding round (July 2021) to approximately KRW 4 trillion in pre-IPO funding by December 2021, garnering significant attention and investor confidence.
Reseller e-commerce: Simplifying reselling with Karrot Market
Karrot Market (당근마켓), the largest online secondhand marketplace in South Korea, has revolutionized local commerce by connecting buyers and sellers within communities through its user-friendly app. Established in 2015, the platform has rapidly grown its user base to an impressive 18 million monthly users, fostering a hyper-local approach to buying and selling.
Karrot Market goes beyond typical secondhand exchanges, offering diverse services such as fresh produce delivery, property listings, tutoring, and neighborhood information. Its focus on facilitating face-to-face transactions fosters community engagement and trust among users. With the introduction of Danggeun Pay in late 2021, users can enjoy simplified payment processes without the need for bank account exchanges or separate apps. This innovative approach enhances user experience by streamlining cash transfers. Karrot Market’s commitment to community and innovation cements its position as a leading force in South Korea’s online flea market landscape.
From a startup to an e-commerce giant: Common strategies to survive the competition
In the fiercely competitive landscape of South Korea’s e-commerce market, successful giants employ common practices to not only survive but excel amidst the intense competition.
With a high smartphone penetration rate, mobile-focused strategies are imperative as consumers prefer the convenience of shopping on their mobile devices. This involves user-friendly mobile apps and responsive websites, optimized mobile shopping experience, and seamless navigation for users on smartphones. For example, Coupang’s success is partly attributed to its effective use of mobile technology, including features like one-click purchasing and same-day delivery.
Fast and reliable delivery services significantly impact customer satisfaction and loyalty in a competitive market. Companies form partnerships with efficient logistics providers, offering same-day or next-day delivery options, and prioritize secure and timely delivery to enhance the overall customer experience. For example, Market Kurly offers a selection of fresh and high-quality groceries with a focus on quick and reliable delivery. Market Kurly’s success is in part due to its commitment to timely service, ensuring that customers receive their orders promptly.
Providing a variety of secure and convenient payment options is crucial. South Korean consumers prefer diverse payment methods, including credit cards, mobile payment solutions, and even alternative payment options. Companies offer multiple payment choices to enhance the overall customer experience, ensuring secure transactions, and catering to the diverse payment preferences of South Korean consumers. For example, Naver Shopping allows customers to utilize various payment methods, including credit cards, mobile payments, and other electronic payment options. By providing a range of secure and convenient payment choices, Naver Shopping aims to enhance the overall shopping experience for South Korean consumers. Naver’s integration of e-commerce into its broader ecosystem reflects a strategy that encompasses both information and commerce, emphasizing convenience and accessibility for its users.
Key takeaways on e-commerce platforms in South Korea
- Korea’s e-commerce market is growing, making it the ground for customer choice and opportunity for startups to establish themselves in the market.
- Several factors make Korea attractive to the e-commerce startups. These factors include the future expansion of the Korean online shopping, the rising preference of Koreans for online shopping, and the existence of efficient delivery platforms.
- The e-commerce platforms like Coupang, Naver, SSG.com, TMON, Market Kurly, Baedal Minjok, and Karrot Market are currently dominating online shopping platforms in Korea.
- Creating a mobile-focused applications, providing efficient logistics, and convenient payments are key to the success of e-commerce platforms.
