Korean E-commerce: A Rapidly Growing Market
Korea’s e-commerce market is on a rapid rise. Expected to reach USD 57.69 billion by 2028, it’s driven by innovative online shopping methods like social media and voice shopping. The shift towards QR code-based mobile payments and businesses making their payment methods mobile-friendly are fueling this growth. People are now enjoying a range of shopping experiences, from traditional online marketplaces to cutting-edge digital platforms [mordorintelligence.com].
Internet and Payment Methods in Korean Homes
In South Korea, almost every home is connected to the internet, making online shopping a regular activity for many. In 2022, about 93% of South Koreans aged 3 years and older were using the internet. [statista.com] With high internet use, traditional credit cards are widely used for online shopping, but mobile payments are becoming more and more common.
Samsung Pay and Naver Pay are popular choices, known for being quick and easy to use. The mobile payment market in South Korea is growing fast. It’s expected to increase from USD 37.27 billion in 2023 to USD 57.69 billion by 2028 [mordorintelligence.com]. This growth is driven by the expanding e-commerce market and the increasing use of QR code-based mobile payments. Many businesses are making their payment methods mobile-friendly, and major market vendors, along with foreign vendors entering the country, are contributing to this growth.
The shift towards mobile payments is significant, with many consumers choosing contactless payment options over traditional credit cards. The COVID-19 pandemic accelerated this shift, as people opted for contactless payments via mobile wallets or e-wallets to avoid the risk of virus transmission through cash handling. Many retailers, restaurants, and public transport networks started accepting mobile payments during this time [mordorintelligence.com].
South Korea’s high internet penetration rate, standing at 97.6%, reflects the country’s advanced digital infrastructure and the population’s readiness to adopt new technologies [oberlo.com]. This widespread internet usage and the shift towards mobile payments show a clear trend towards a more digital, cashless society in South Korea.
Apple Pay’s Entry into Korea
The launch of Apple Pay in South Korea in 2023 is a noteworthy development in the digital payment landscape, especially considering the long-awaited anticipation from Apple consumers in the region. This strategic move by Apple into a thriving digital payment market caters to Korean consumers’ growing preference for convenient and secure payment options. Initially exclusive through Hyundai Card, Apple Pay’s integration aligns well with the tech-savvy lifestyle in South Korea, offering a seamless and efficient payment method that enhances both online and in-store shopping experiences.
Samsung Pay, a major competitor in the market, has been available to Korean consumers since August 20th, 2015, setting a precedent in the country’s digital payment ecosystem [androidauthority.com]. The introduction of Apple Pay, therefore, marks a significant step in diversifying the range of digital payment options available to Korean consumers and is seen as a response to the evolving needs and expectations of the market.
Apple Pay’s presence in South Korea is expected to drive further advancements in the country’s digital payment infrastructure. Renowned for its security and ease of use, Apple Pay might influence consumer spending habits towards more cashless transactions. In a market where digital payments are rapidly becoming the norm, and innovative payment solutions are highly sought after, Apple Pay’s partnership with Hyundai Card—a key player in South Korea’s financial sector—is seen as a strategic move to broaden its adoption and integration.
The Online-Offline Shopping Fusion
In South Korea, the retail industry is evolving significantly due to shifts in consumer behavior and technological advancements. Consumers are increasingly browsing in physical stores but making purchases online for better deals. This has led to a blend of online and offline shopping experiences. Significant mergers, like Shinsegae’s acquisition of eBay Korea, have disrupted traditional retail, enabling companies like Shinsegae to implement omnichannel strategies that combine their physical stores with online market expertise [oosga.com].
During the COVID-19 era, this shift accelerated, prompting global brands to reimagine their offline presence through flagship and pop-up stores, enhancing customer experience and loyalty. Retail strategy has evolved, focusing on fewer but more experiential outlets. This Online-for-Offline (O4O) approach, creating immersive, thematic store environments, is increasing brand engagement and loyalty, as observed by Dan Kim of Cushman & Wakefield Korea [koreajoongangdaily.joins.com][koreajoongangdaily.joins.com].
Surge in Online Fashion
In South Korea, the fashion e-commerce market is experiencing significant growth, becoming a major part of the country’s online shopping landscape. It’s projected to reach approximately US$28.46 billion in 2023, accounting for a substantial portion of South Korea’s total e-commerce market. This market includes diverse categories such as apparel, footwear, and bags & accessories. Despite expectations of a slight decline in the coming years, fashion e-commerce remains a crucial segment, reflecting the changing shopping preferences and the importance of online platforms for consumers seeking variety and convenience in their fashion purchases [ecommercedb.com].
Government’s Push for Digital Infrastructure
The Korean government is actively enhancing its digital infrastructure, with various initiatives focused on developing cloud data platforms and digital fulfillment solutions, like drones. These efforts support the continuous expansion of the e-commerce market and boost Korea’s overall digital capabilities.
Key to these efforts is the “Digital Platform Government” project, launched by the Ministry of Science and Information and Communications Technology. This project aims to provide civil services with minimal paperwork, reflecting the government’s commitment to leveraging technology for efficient and inclusive public services. [ibtekr.org][ibtekr.org] A presidential committee, including 19 experts and 4 ministers, has been formed to design operations that are people-centric, data-driven, and transparent, while collaborating closely with the private sector. This platform will serve as a testing ground for both public and private sectors to experiment with new innovations, ensuring that all developments are data-driven. [ibtekr.org][ibtekr.org]
Furthermore, the Korean government is aligning its digital transformation efforts with its commitment to environmental sustainability. The New Korea Agreement, launched in 2020, encompasses investments worth 160 trillion won aimed at creating nearly 2 million jobs by 2025, highlighting the government’s holistic approach to development that considers both technological progress and its impact on the environment. [ibtekr.org]
Conclusion
Korea’s e-commerce market reflects rapid digital innovation and consumer adaptability. As it grows, payment methods are evolving too. If you’re looking to build a store with Korean payment options, I am here to assist through Korea for WooCommerce. I specialize in integrating local payment methods. My services include setting up your WooCommerce store and customizing payment solutions tailored to the Korean market. My expertise in local e-commerce trends and payment systems will ensure a seamless shopping experience for your customers. Reach out to me for specialized assistance to tap into Korea’s thriving online market.
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