It is estimated that South Korea’s e-commerce markets in 2017 will be worth more than $62.1 billion (70 trillion KRW) which will be the highest ever. It seems that percentage of mobile shopping out of entire turnover will approach 60%. These are the results of diversification of business models as number of customers who are moving their purchasing channels from offline to online is increasing and as each company is putting out aggressive marketing strategies.
According to Statistics Korea and distribution industries, it is likely that South Korea’s e-commerce markets will be worth more than $62.1 billion (70 trillion KRW) by end of this year.
According to Statistics Korea, entire turnover of last year’s e-commerce markets was $57.6 billion (61.9134 trillion KRW) which is 20.5% increase compared to 2015. Compared to how turnover of e-commerce markets in 2012 was $30.3 billion (34.0680 trillion KRW), turnover of e-commerce markets has almost doubled. This trend is happening as current online shopping companies’ businesses are in upswing and as traditional offline distributors such as large markets and department stores are entering e-commerce markets one after the other.
South Korea’s e-commerce markets are expanding every year at a growth rate of about 15% and it is estimated that upward trend will continue this year as well. Actually turnover in last January, which was $5.34 billion (6.0192 trillion KRW), increased by 14.6% compared to January of last year. Turnover in last February, which was $5.20 billion (5.8677 trillion KRW), increased by 22.9% compared to February of last year. By looking at these trends, it seems that this year’s turnover of e-commerce markets will easily surpass $62.1 billion (70 trillion KRW).
“As internet and mobiles are generalized, e-commerce markets are growing at a rapid rate every year.” said Executive Son Keon-il of IBM. “As department stores and large markets are jumping into e-commerce markets, competitions trying to grab upper hand in e-commerce markets are very fierce.”
Mobile has become an important shopping platform that is leading South Korea’s e-commerce markets. Percentage of mobile shopping out of entire e-commerce turnover in 2016 was 53.4% and this is the first time when percentage of mobile shopping was more than 50%.
It seems that this percentage will go over 60% as number of demands for mobile shopping is increasing at a rapid rate as consumers can enjoy online shopping regardless of time and place. Turnover of mobile shopping increased by more than 10% every year in the past 3 years.
ICT (Information Communication Technology-based shopping services that appeared recently are catalysts that expand e-commerce markets including mobile shopping. South Korea’s distribution industries are attempting to create new demands by putting out ICT shopping services such as AI (Artificial Intelligence), VR (Virtual Reality), chatbot, and biometrics payment in markets.
Act of buying and selling products is repeated every day in distribution markets. Because it is faster to secure enormous amount of data compared to other industries, it is advantageous in commercializing and enhancing technologies in distribution markets. This is why distribution markets are seen as testbeds for testing new technologies. Online and offline distributors are currently working on R&D in order to differentiate their technologies from others.
SK Planet 11th Street and Interpark recently introduced AI and chatbot-based merchandise recommendation services. Hyundai Department Store added ‘VR Store’ to its online mall called ‘The Hyundai.Com’ in last July. Shinsegye Department Store is going to launch ‘S Mind’, which is AI-based customer analyzing system, starting from spring sales. Lotte Department Store is planning to commercialize a merchandise recommendation service called ‘Shopping Adviser’ by end of this year.
“E-commerce has become an important feature in distribution industries as Smartphones have become generalized and telecommunication infrastructures and simple payment systems have been prepared.” said a representative for a distribution industry. “Each company is working on differentiating their technologies and services from others in order to survive from fierce competitions.”
Staff Reporter Yoon, Heeseok | email@example.com
Copyright © The Electronic Times Corp. & The Electronic Times Internet Corp. All Rights Reserved.