Austrade e-commerce guide paves the way to Korea
25 Jan 2018
An e-commerce guide has been developed by Austrade to help Australian
businesses gain access to Korea’s burgeoning e-commerce marketplace and
increase pathways to market for Australian exporters.
The aptly titled
‘E-commerce in Korea: A Guide for Australian Business’
(PDF 4.03MB) – the first
in a series of country specific publications being developed by Austrade –
provides detailed information on Korea’s e-marketplaces and tips on how to
access the increasingly savvy Korean consumer.
Amanda Hodges, Austrade’s Seoul-based Senior Trade Commissioner for Korea
and Mongolia, said Korea’s e-commerce market is predicted to hit US$50
billion this year, making it the third largest in the Asia-Pacific, after
China and Japan.
‘The Korean e-commerce market is growing at a rate of 15 per cent every
year,’ said Hodges.
‘A combination of high 4G penetration and smartphone ownership of nearly 91
per cent of Korean’s population of 50 million people, has assisted internet
retailing to become a way of life in Korea. Close to 65 per cent of
internet users are shopping online – the second highest percentage of
online shoppers in the Asia-Pacific region.
‘Korean consumers are shopping across borders to look for deals and
hard-to-find items, food and beverages (excluding alcohol), apparel,
consumer electronics and beauty and personal care items,’ added Hodges.
Fuelling this growth is Korea’s new e-commerce applications, platforms and
payment solutions which are making it easier to engage in e-commerce. This
is further enhanced as Korea is a global technology leader with a tradition
of robust investment in sophisticated technology. It has also opened
opportunities for Australian companies specialised in fintech solutions.
According to Statistics Korea, over 99 per cent of Koreans aged 10–30 years
use the internet, while consumers aged 40–60 years – who make up 80 per
cent of the population –are heavy internet users.
Smartphone purchases are also booming as a growing number of consumers are
spending more using their mobile devices.
Approximately 54.2 per cent of online shopping transactions were made from
mobile phones, with one-third of smartphone users making a purchase with
their phone at least once a week.
These mobile-driven transactions accounted for 53.5 per cent of total
internet retail sales in 2016 and were worth US$31.7 billion (KRW35.5
trillion), a 41.9 per cent increase compared to 2015.
Hodges noted five types of online shopping websites in Korea are also
fuelling the growth in online transactions. These include department store
chain websites such as Lotte, Hyundai, Shinsegae and AK; hypermarket
websites; TV home shopping channels; social commerce shopping platforms;
and open market platforms.
‘eBay Korea owns the two biggest internet retailers in Korea – Gmarket and
Auction – and held a 22 per cent market share in 2016. While SK Planet’s
‘11 Street’ shopping website is the second biggest online retailer, with
nine per cent market share, and Lotte Shopping and Coupang ranked third and
fourth,’ said Hodges.
Eight countries accounted for 99 per cent of cross-border online trade: the
US, China, Germany, Hong Kong, Japan, the UK, France and New Zealand.
However, Australia only accounted for approximately 0.4 per cent of
cross-border online sales in 2016.
For cross-border online shopping, top items purchased by Korean consumers
from Australia included beauty and personal care items, fashion and health
supplements,’ she said.
Hodges said the landmark Korea-Australia Free Trade Agreement (KAFTA), once
fully implemented, will also allow 99.8 per cent of Australia’s highly
regarded goods tariff-free entry to Korea.
‘This is why we encourage Australian business to take a closer look at the
opportunities Korea’s e-commerce platforms provide and utilise them as they
represent an innovative pathway to enter the market.’
Contact Austrade Seoul to learn
more about accessing the e-commerce opportunities.