The Korean e-commerce market has experienced remarkable growth, solidifying its position as a global powerhouse. In 2022, the market reached an impressive total value of online transactions, amounting to $177.42 billion, marking a substantial increase from previous years.
Our "E-commerce in South Korea - Market Overview 2021" report, published in 2021, revealed that the total online transaction volume in 2020 amounted to $144.7 billion. This indicates a significant growth of 22.6% in just two years. When we reflect back to 2015, as documented in our "South Korea E-commerce Market Review 2015" the total online transactions stood at a mere $43 billion. Over the course of seven years, the Korean e-commerce market has witnessed an astounding growth rate of 312%.
Korean consumers are renowned for their price-consciousness and openness to marketing strategies. While they prioritize quality, brands and companies that invest in advertising across various media channels have successfully retained and expanded their customer base. This includes online-exclusive brands that utilize non-online advertising channels to promote their offerings effectively.
Fashion and food products dominate as the most popular categories among Korean consumers. In 2022, fashion products alone accounted for a staggering $25.09 billion in transactions, closely followed by food and beverage products. The fashion category's success can be attributed to hassle-free return policies offered by marketplaces, allowing consumers to easily resolve issues like color preferences.
The food and fresh products category has experienced robust growth, thanks to secure transactions and same-day delivery services provided by marketplaces. Consumers appreciate the quick shipping times, competitive pricing, and diverse range of products, including fresh fruits, vegetables, dairy, fish, and meat. Services like Coupang's Rocket Fresh delivery, offering over 8,500 types of fresh food with same-day delivery, have contributed significantly to this growth.
Within the sports category, tennis products have witnessed extraordinary growth, with transactions surpassing a 200% increase compared to 2019. This surge can be attributed to the impact of the COVID-19 pandemic, which led consumers to gravitate towards individual and healthier activities. Sales of tennis goods, racquets, and outfits have experienced substantial increases during this period.
Korean consumers have also displayed an increasing trend of purchasing from foreign online sellers. In 2022, their purchases from foreign online retailers totaled $4.5 billion, representing a significant 47% increase since 2019. Fashion and food and beverages emerged as the largest categories in cross-border transactions.
The popularity of cross-border purchases can be attributed to the availability of free shipping options and localized Korean versions of foreign online stores. Collaborations between platforms like Amazon US and 11Street have further streamlined transactions, enabling thousands of Amazon products to be shipped to Korea within a swift four-day timeframe.
Overall, the Korean e-commerce market continues to thrive, fueled by price-conscious consumer preferences, the popularity of fashion and food products, and the growing interest in cross-border transactions. With its impressive growth trajectory, the market is poised to achieve even greater milestones in the years to come.