South Korea Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in South Korea, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals.
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eCommerce
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Overview

As the largest retail channel in South Korea, e-commerce is a central component of the country’s consumer market.

Characteristics of e-commerce in Korea include:

  • The domestic e-commerce market reached approximately $200 billion in 2025, reflecting continued growth from the previous year. E-commerce now accounts for roughly half of Korea’s total retail sales, one of the highest online retail penetration rates in the world. The sector’s sustained growth, with a compound annual growth rate of roughly 13 percent, continues to reshape consumer habits and is contributing to a gradual reduction in the number of brick-and-mortar stores nationwide.
  • The most popular products purchased through online channels include home appliances and electronics, food and beverages, food delivery services, travel and transportation services, clothing, household goods, and cosmetics. Consumer demand continues to reflect a balance between essential goods, lifestyle products, and convenience services.
  • Mobile purchases accounted for 77% of total e-commerce sales in 2025, with Korea’s near-universal smartphone ownership continuing to drive growth. Consumers show a strong preference for fast and convenient mobile payment solutions, including Naver Pay and Kakao Pay, which are widely integrated into online shopping platforms and apps.
  • Market dominance is taken by large integrated platforms like Coupang, Naver Shopping, and SSG.com. Most of the main channels offer the options of ultra-fast delivery services including same-day and dawn delivery.
  • Cross-border e-commerce continues to expand as Korean consumers increasingly purchase products from overseas platforms, particularly in fashion, beauty, supplements, and consumer electronics. Total overseas direct purchases exceeded $6 billion in 2025, with U.S. products benefiting from strong brand recognition and a reputation for quality.
  • Under the KORUS FTA, express courier service mailed goods valued at $250 or less are duty-free when sourced from the U.S., and ‘made in the USA’ items valued at $1,000 or less are exempt from KORUS FTA documentation requirements.
  • Korea Customs Service (KCS) requires all importers to use a Personal Customs Clearance Code (PCCC) for customs clearance instead of national ID numbers. The PCCC is required for all personal imports, regardless of the value of the goods being imported. 
  • U.S.-based e-commerce companies must comply with Korea’s data protection framework, primarily governed by the Personal Information Protection Act (PIPA), which may restrict e-commerce for firms managing user data on international servers. Companies must also comply with regulations on data localization, breach notifications, and user privacy rights under related laws, including the Credit Information Use and Protection Act.

Internet Penetration

In 2025, nearly 100 percent of Korean households had access to the Internet, reflecting Korea’s position as one of the most digitally connected countries globally. Smartphone penetration reached approximately 96 percent, with nearly full adoption among those aged 10 to 59. Usage among older demographics has also risen, with 97 percent of people in their 60s and 70 percent of those in their 70s now using smartphones, highlighting the growing digital engagement of senior consumers.

Current Market Trends

The Korean retail sector is experiencing dynamic growth, primarily driven by e-commerce. While online shopping continues to expand, traditional retail channels are struggling to retain consumer interest. Many consumers visit brick-and-mortar stores for browsing but ultimately purchase online to secure better deals and convenience. Physical retailers have introduced in-store pop-up events to attract foot traffic, but despite these efforts, they are gradually losing market share. In contrast, online retailers are leveraging live commerce to enhance audience engagement and are increasingly focusing on ultra-fast delivery, with same-day and quick delivery services becoming the norm. This shift has led some manufacturers to adopt an e-commerce-only strategy, bypassing traditional retail channels entirely.

Domestic E-commerce (B2C)

The domestic e-commerce market reached approximately $200 billion in 2025, growing about 5 percent compared to 2024. E-commerce accounted for roughly half of Korea’s overall retail market, continuing to outpace traditional retail channels. Popular platforms include Coupang, Naver Shopping, SSG.COM, Gmarket, 11st, and Kakao Commerce, with Coupang remaining the leading platform for both mobile and desktop users. The market continues to expand as Korean consumers increasingly favor online shopping for convenience, broad product selection, and ultra-fast delivery services.

Direct-to-Consumer (DTC) E-commerce

Many brands are increasingly shifting towards Direct-to-Consumer (DTC) e-commerce models to bypass third-party platforms, allowing for greater control over customer relationships, data, and brand experience. This approach enables brands to personalize the shopping journey, offering tailored recommendations, exclusive deals, and faster service, which Korean consumers highly value. Using DTC, brands can enhance consumer loyalty and ensure brand authenticity in a highly competitive market. This strategy also enables flexible logistics solutions for rapid delivery and high-quality service.

Business to Government (B2G) E-commerce

For B2G e-commerce, the Korea ON-line E-Procurement System (KONEPS) remains the central platform for virtually all public procurement in Korea. Operated by the Public Procurement Service (PPS), KONEPS is used by more than 70,000 public institutions and over 750,000 registered suppliers. The system processes over $150 billion in transactions annually and is widely recognized for its efficiency and transparency. KONEPS is also frequently cited by international organizations, including the United Nations and the OECD, as a leading model for electronic government procurement.

Cross Border E-commerce

Korea’s cross-border e-commerce market continued to expand in 2025, with overseas direct purchases exceeding $6 billion. The United States remains one of the largest sources of imported online purchases, alongside China, and is particularly competitive in categories such as dietary supplements, cosmetics, apparel, and consumer electronics.

Although China has increased its market share through low-cost platforms such as AliExpress and Temu, U.S. products continue to enjoy strong consumer trust and typically command higher average transaction values. Korean consumers increasingly purchase from a broad range of international sellers, but U.S. brands retain a strong reputation for quality, authenticity, and innovation.

Online Payment

With the continuous growth of online shopping, electronic payment services via PC and mobile are increasing significantly.  The average daily transactions for payment gateway (PG) services reached $900 million, reflecting a nearly 16 percent increase from the previous year. Major tech companies like Kakao and Naver dominate the digital payments market, holding about 50 percent market share.  In contrast, traditional financial service providers comprise approximately 26 percent of the market, while mobile phone companies, including Samsung, account for 24 percent.

Mobile E-commerce

Mobile e-commerce continues to drive Korea’s rapid online retail growth. In 2025, mobile purchases accounted for approximately 75 percent of total e-commerce sales. The high penetration of smartphones and widespread use of mobile payment solutions like Naver Pay and Kakao Pay remain key factors supporting this trend, as consumers increasingly prioritize convenience and speed in their shopping experiences.

Digital Marketing

South Korea’s digital advertising market exceeded $8 billion in 2025 and continues to account for the majority of total advertising spending. Digital channels dominate the marketing landscape as Korean consumers spend a significant portion of their time on mobile devices, social media, video platforms, and e-commerce apps. Video advertising and social media marketing are the fastest-growing segments, with brands increasingly allocating budgets to short-form video, influencer collaborations, and performance-based advertising on platforms such as YouTube, Instagram, TikTok, Naver, and Google. Search advertising remains highly effective, particularly through Naver and Google, as Korean consumers tend to research products extensively and rely heavily on reviews and localized content before making purchasing decisions.

Social Media

South Korea has one of the highest social media penetration rates in the world, with more than 90 percent of internet users engaging with social platforms each month. Social media plays a central role in product discovery and purchasing decisions, particularly among younger consumers. Instagram, YouTube, and TikTok are especially influential, while KakaoTalk remains the country’s dominant messaging platform and an important channel for customer engagement and targeted advertising. Naver blogs and online communities also continue to shape consumer sentiment and search visibility. Influencer marketing is highly effective in Korea, and brands that invest in Korean-language content and partnerships with trusted local creators tend to see stronger market traction.

Live Commerce

Live commerce, where sellers engage with customers in real-time through video streaming, has emerged as a powerful tool for driving sales and brand loyalty in South Korea’s e-commerce sector. This approach is particularly effective with South Korea’s digitally savvy consumers, who value the immediacy, transparency, and interactivity that live commerce offers. During live sessions, brands showcase products and engage directly with viewers by answering questions, providing demonstrations, and offering limited-time deals. Such real-time interactions foster a sense of connection and trust, making live commerce highly effective at boosting purchase rates and converting viewers into loyal customers. The format also lends itself well to the Korean market’s mobile-first approach, allowing shoppers to join live sessions seamlessly on their devices. For brands, live commerce presents a unique opportunity to build brand identity, gather real-time feedback, and cultivate an interactive community, setting it apart from more traditional e-commerce channels.

Major Buying Holidays

Major buying holidays in Korea encompass traditional celebrations like Seollal (Lunar New Year, typically in January/February) and Chuseok (Mid-Autumn Festival, usually in September/October), alongside modern occasions including Children’s Day (May 5), Parents’ Day (May 8), and Christmas. Korean consumers have also enthusiastically embraced international shopping events, particularly China’s Singles’ Day (November 11) and U.S. Black Friday sales (late November), with domestic retailers now offering competitive deals during these periods, while Korean-specific events like the Korea Sale Festa (October) have emerged as major shopping festivals combining both online and offline retail experiences.

E-commerce Services

Food delivery services remained one of the largest categories in Korea’s e-commerce market in 2025, accounting for 15 percent of total online shopping transactions. Supported by the widespread use of delivery platforms such as Baemin, Coupang Eats, and Yogiyo, the category has maintained its strong position since the COVID-19 pandemic. Travel and transportation services accounted for 11 percent of online sales in 2025 as demand for domestic and international travel continued to recover. Together, these categories highlight Korean consumers’ sustained preference for app-based services that offer convenience, speed, and seamless mobile payment options.

E-commerce Intellectual Property Rights

It is illegal to sell counterfeited products on e-commerce sites and to bring counterfeit goods into Korea via cross-border e-commerce. Korea Customs Service prohibits any counterfeited goods from being brought into the country.

Opportunities

Korean consumers spent more than $6 billion on overseas e-commerce purchases in 2025, with the United States remaining one of the leading source markets. U.S. products are particularly competitive in dietary supplements, premium apparel, cosmetics, baby products, and specialty foods. European brands continue to perform strongly in luxury beauty and fashion, while Chinese platforms have gained market share in electronics, household goods, and value-oriented consumer products.

U.S. products benefit from strong brand recognition and a reputation for quality, safety, and authenticity. Korean consumers place particular trust in well-known American brands and products subject to rigorous U.S. regulatory standards, including FDA-regulated health and wellness products. Rising interest in health, premium imported goods, and niche brands, combined with Korea’s advanced logistics infrastructure and high e-commerce adoption, continues to create attractive opportunities for U.S. exporters that can localize marketing, comply with Korean regulations, and leverage established online marketplaces and cross-border e-commerce channels.

Trade Shows

  • Korea E-Commerce Fair

Key Contacts 

Local Contact

U.S. Commercial Service Korea    
U.S. Embassy Seoul
188 Sejong-daero, Jongro-gu
Seoul 03141, Korea
Tel: 82-2-397-4535
office.seoul@trade.gov
https://www.trade.gov/south-korea

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