Korea

Country starter pack
Sales & marketing in Korea
41
Social commerce, which is online sales through social
media outlets such as Facebook, Kakao or blogs, is also
a growing trend in Korean online retail. Sales through
internet retailing have grown over six per cent annually in
recent years. As multi-channel retailers and store-based
retailers are focusing on online sales to survive, online
sales are estimated to reach up to $53 billion by 2018.
Consumers’ busier lifestyles will also help e-commerce
continuously grow and develop. The Korean e-commerce
market is driven by clothing, fashion and consumer
electronics. Consumers are also familiar with crossborder
e-commerce, as domestic products are often
sold at a premium by retailers, thanks to agreements
with manufacturers. As a result, online consumers can
pay local product prices of up to nine times higher than
overseas. Online shopping imports rose 47 per cent in
2013, to about $1.1 billion.
The Borderfree index highlights the importance of online
sales in Korea, ranking it as a “desirable market” to engage
in e-commerce with. Koreans are becoming increasingly
savvy about the benefits of e-commerce with many
taking classes on international online shopping. They
often will use “parcel forwarding” to save on shipping,
while also reselling items through online communities
such as Feelway and Malltail. Posting of online sales and
deals in such online communities spreads incredibly fast
demonstrating a high response rate. Like other markets
such as Hong Kong, many Koreans have a high level of
disposable income with peak online sales periods between
10pm and 12am. Wednesday nights on average have the
highest sales volumes of the week. With 20 per cent of
the population in Seoul and e-commerce companies
highlighting over half of sales come from Seoul alone, a
business may want to have a strategy to target the Seoul
demographic in particular.
The preferred online payment method in Korea is credit
cards, with 73 per cent preference. Visa, MasterCard
and Amex are the most widely accepted credit card types
for cross-border e-commerce transactions. However,
Australian businesses wanting to set up online sales
access to their products need to consider that in Korea,
consumers typically do not have an “internationally
accepted” credit card. It is therefore important to
consider what payment options you will accept and
discuss this with professional advisers.
To sell online in Korea you are required to set up a
subsidiary or open a branch office in the country. If
you want to use popular online sales markets such
as Gmarket, 11st, Shopping.Naver, Interpark, and
Cjmall, Korean residential status is required. It is also
recommended for Australian businesses potentially
selling online in Korea to review the Personal Information
Protection Act (PIPA) and ministerial data privacy/spam
regulations, which may restrict Australian businesses
managing user data on international servers.