Discover Why South Korean M-Commerce Is Rising, And Thriving

Korean smartphone penetration is over 70%., and m-commerce sales more than doubled in 2014. Learn how your company can engage Korean shoppers on their devices of choice.

Dominic Dithurbide's avatar
Dominic Dithurbide

June 18, 2015


Our coverage of the thriving South Korean market continues, this time with a focus on the incredible growth its mobile e-commerce sector has seen in recent years.

As we’ve previously reported, South Korea is an ideal target market for online expansion. It’s one of the world’s wealthiest nations – its PPP is nearly $1.8 trillion, ranking it 13th in the world. (Its economy is the fourth-largest in Asia, by GDP.) The country is also technologically advanced, highly industrialized, and has an impressive record of economic growth. As Foreign Affairs reports, the country’s economy has grown by an average of 7% annually for 50 years, contracting in only two of those years.

And of course, South Koreans are incredibly connected online. More than 84% of its residents have Internet access – access that delivers the world’s highest average internet connection speeds. It sports the most public wi-fi locations in the world, too. Koreans of nearly every age group are active online, with near-universal adoption rates.

These powerful economic, infrastructural and social factors create a recipe for success, particularly for companies interested in entering the online marketplace.

We’ve shown how U.S. companies can win big by launching e-commerce sites in Korean, to capitalize on the jikgu shopping phenomenon. But what about Korean mobile e-commerce? Should expanding companies be investing resources and marketing in that space as well?

In a word, yep – and it’s worth it. The penetration rate for smartphones among Korean mobile-phone users is more than 70%, The Wall Street Journal reported last year. (Other recent estimates place this number as high as 75%.) This is the second-highest smartphone adoption rate in the world, just after the United Arab Emirates. And South Korea leads the globe in ultra-fast 4G LTE cellular network penetration, Bloomberg recently reported.

Since networks are fast and data plans are cheap, Koreans spend a lot of time on their smartphones, especially during lengthy train commutes to and from work.

And now this: Data compiled and released this week by eMarketer reveals astonishing m-commerce growth in the market. Korean m-commerce sales more than doubled in 2014. According to the story, B2C e-commerce sales increased “79.2% over Q1 2014 on mobile devices – more than four times the growth rate of total B2C ecommerce sales over the same period.”

The travel and fashion retail sectors saw the largest share of m-commerce sales during this period, the story said. In Q1 of this year, 50% of all ecommerce transactions at Korean digital retailers were mobile, up from 45% a year ago. 40% of Koreans conduct product research on their smartphones, and nearly the same number make purchases via the devices.

The MotionPoint Perspective

So what’s the smartest way to engage these savvy, smartphone-connected consumers? Consider this information from Borderfree, a company that provides end-to-end website checkout & fulfillment solutions for international markets, organizations must engage shoppers on their devices of choice, in the locations they most-often occupy.

This means leveraging mobile marketing initiatives, with complementary geo-targeting outreach efforts.

Here’s why: Borderfree’s research indicates that most of South Korea’s digital commerce is conducted in or near Seoul. 20% of Koreans live in or near the country’s capital. Launching mobile geo-targeted ads for this region is an especially effective way to connect with many of the nation’s residents.

And while other South Korean cities have much smaller populations in comparison to Seoul (Busan, Incheon and Daegu have populations of 3.4, 2.7 and 2.5 million respectively), Borderfree reports that nearly 85% of South Koreans live in urban areas. This also bodes well for straightforward, streamlined geo-targeted outreach efforts.

Organizations should also accommodate local payment options whenever possible. Last year, The Paypers, a provider of news & analysis products for global payment professionals, published an excellent downloadable report with useful data about South Korean payment platforms. In it, the company highlighted several payment usual suspects like Visa, MasterCard and American Express as “the most widely-accepted credit card types for cross-border e-commerce transactions.”

However, companies can – and should, when appropriate – support other card brands operating in the country, and accommodate Korean mobile payment options, too. This is a powerful way to eliminate barriers between mobile browsing and buying.

This approach is seconded by Digital River, a payment service provider specializing in international payment processing.

“Accepting local cards makes sense from both a customer and a processing perspective,” the company recently wrote. “Online e-commerce merchants who accept the most popular alternatives – such as real-time Internet Bank Payments, Electronic Fund Transfers and Mobile Payments – can generate significant sales lift.”

Accepting only international cards, the company warned, can reduce sales to only 20% of the market.

But back to Borderfree, and its recent report on the region. “South Koreans frequently visit and study in the U.S., exposing them to U.S. brands and highlighting the dramatic cost-savings available from buying abroad,” the company wrote. “However, language is still a significant barrier to comfort and conversion – and translated content is strongly encouraged.” (Emphasis ours.)

As the world’s #1 enterprise website localization provider, MotionPoint certainly agrees with this sentiment. Companies that want to successfully sell to South Koreans must have websites and digital initiatives in place, in Korean, to maximize mobile traffic, engagement and revenue.

And understand that being “in language” isn’t enough. Optimizing the user experiences for these shoppers … and providing them with resonant, market-specific localized content or specials … can really move the needle.

U.S. e-commerce sites already see sales spikes from Korean shoppers during major shopping events such as Black Friday. Korean consumers are quite happy to pay additional tariffs for more expensive items from the U.S., since those items are still cheaper than comparable products in South Korea.

We believe companies can easily replicate these sales spikes in local markets (and their frequency), with localized sales. Everyone loves a bargain, but Korean consumers can be positively crazy about them. Data suggests Koreans are especially responsive to online sales.

“Deals posted in online communities go viral fast,” Borderfree explained. “The percentage of discount-priced SKUs purchased by Koreans is the highest across the (entire) Borderfree network.”

Companies that embrace language translation, and resonant localizations (including marketing, product availability and sales events) can see great success in highly-engaged international markets like South Korea.

Is your organization keen to expand into the South Korean market online? Contact MotionPoint. Our dedicated team of Korean “Global Growth” experts can help you craft a plan to connect with Koreans on their smartphones, in their language of choice, using the payment options of their choice.

Last updated on June 18, 2015
Dominic Dithurbide's avatar

About Dominic Dithurbide

Dominic Dithurbide is a creative, goal-driven marketing leader that’s dedicated his career to the translation industry. Dominic brings proficiency in global marketing, demand generation, and go-to-market strategies to MotionPoint’s marketing team.

Dominic Dithurbide's avatar
Dominic Dithurbide

Marketing Manager


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