1 Feb 2016
10% of All South Korean Retail Spend Set to be Online in 2016
Country now world's seventh largest online market, with predicted sales of US$40.43 billion.
E-commerce will account for almost 10% of all retail spending in South Korea by the end of 2016. According to Statistics Korea (Kostat), the country's government-run data bureau, 9.8% of South Korea's retail spend will be online this year, a 4% increase on the 2015 figure.
In total, some US$40.43 billion is expected to be spent online this year by South Koreans compared with $36.76 billion in 2015. This will make the country the third largest e-commerce retail market in the Asia-Pacific region, topped only by China and Japan. It also establishes South Korea as the world's seventh largest market for online sales overall.
In terms of spend, Kostat sees the South Korean market as most comparable to that of France, with online sales in the two countries also growing at a similar rate. The research body, however, does predict that spend in South Korea will continue to grow even as online sales in France begin to taper off.
In terms of penetration, South Korea's predicted online share of spend of 9.8% for 2016 already noticeably outpaces France's 5.1%. In global terms, the UK tops the list (14.4%), followed by China (12%) and the US (7.1%).
Overall, retail e-commerce growth in South Korea is expected to outperform the total retail sector for the foreseeable future. By 2018, according to Kostat, some 12.0% of all retail sales in the country will be conducted online.
In 2015, travel-related services accounted for the largest share of both the country's business-to-consumer and consumer-to-consumer e-commerce sales, representing some 16.7% of the overall spend. This was followed by clothing, fashion and related goods (16.3%), household goods, automotive parts and accessories (11.1%), home appliances and telecoms equipment (10.6%), food and beverages (8.4%), and computers and computer accessories (8.0%).
Michelle Lee, Seoul Consultant