South Korea - Country Commercial Guide

Describes what a company needs to know to take advantage of e-commerce in the local market and covers prominent B2B websites.

Last published date: 2022-08-02

E-commerce is a key component of the overall consumer market in Korea, a country with 99.7 percent of households having internet access via PC, mobile, or another device according to OECD in 2020. 

Characteristics of e-commerce in Korea include:

  • Domestic online purchases reached $168.5 billion in 2021 up from $135.1 billion in 2020. High penetration of smartphones is the main factor driving market growth. While purchases on PCs increased from $43.4 billion in 2020 to $47.8 billion in 2021, purchases on mobile phones increased from $ 91.8 billion in 2020 to $120.7 in 2021.
  • The most popular products sourced from domestic online retailers in 2021 are food services (13.3 percent), food & beverage (12.9 percent), home appliances & electronics (11.8 percent), clothing (8.8 percent), household items (8.7 percent), cosmetics (6.3 percent), and travel & transportation services (4.9 percent).
  • Online purchases from foreign retailers have also rapidly increasing because Koreans find less expensive prices on overseas e-commerce platforms even after adding-in international shipping fees and import duties. Cross border e-commerce reached $4.5 billion in 2021.
  • Under the KORUS FTA, express courier service mailed goods under $200 are duty free when sourced from the U.S., and ‘made in the USA’ items under $1,000 are exempt from KORUS FTA documentation.
  • Multi-brand on-line retailers such as and eBay are the most frequently used foreign on-line shopping sites visited by Koreans. 
  • According to Korea Customs Agency, the most popular foreign sourced products from on-line retailers by Koreans in 2021 were health supplements (19.4 percent), apparel (17.7 percent), electronics (10.4 percent), footwear (7.3 percent), and handbags and bags (6.8 percent)
  • Following the implementation of Korea’s privacy for personal data in 2014, Korea Customs continues to push importers of record to clear shipments with a Customs Clearance Indigenous Code (CCIC), a Korea Customs-issued ID number, rather than a national ID number. 
  • U.S. based e-commerce companies should review the Personal Information Protection Act (PIPA) and ministerial data privacy/spam regulations, which may restrict e-commerce for firms managing user-data on international servers. The most recent PIPA was amended in January 2020. 

In March 2022, CS Korea completed an International Market Insight (IMI) report, describing how Koreans make purchases via foreign online retailers.

Internet Penetration                                                                                                                

According to Ministry of Science and ICT, by 2020, Korea’s internet user population and smartphone user population reached 91.9 percent and 91.5 percent respectively.  Considering that babies, toddlers, some children, and many older people do not use the internet, almost everyone among the working age population is an internet user in Korea with 99.7 percent of households in Korea have internet access.

In April 2019, Korea became one of the first countries to launch commercial 5G network services nationwide. Thanks to its 5G networks, Korea ranks second in the world for mobile connection speed according to the Speedtest Global Index, August 2021.  With the domestic mobile carriers’ aggressive promotion along with the government pressure on expanding 5G infrastructure, the number of 5G subscribers have rapidly increased. As of December 2021, the country had more than 20 million 5G subscribers.

Current Market Trends                                                                                           

The growth of the Korean retail sector is led by e-commerce. While e-commerce is growing rapidly, traditional retailing channels are suffering. Consumers tend to go to traditional stores for window shopping but purchase goods at online retail sites to find the best deals. 

One of the biggest trends in online retailing is convergence with other platforms. Internet portal sites, social media, TV home shopping, over the top media services (OTT), etc. now all have online shopping functions, and the popularity of their platforms are increasing since consumers want a one-stop shopping experience that includes product reviews and price, purchasing, and paying with new online payment solutions associated with the platforms. 

Domestic E-commerce (B2C)                                                                                  

Domestic e-commerce sales have been increasing for the past few years reaching $168.5 billion in 2021 up from $135.1 billion in 2020. Beginning in 2016, online purchases surpassed hypermarkets’ sales making e-commerce the biggest retail channel in Korea. Popular e-commerce sites include Auction, G-market, 11st, Coupang, and Naver Store. Naver was ranked as the top e-commerce site in 2021 (combined mobile and PC users).

Cross Border E-commerce                                                                                                     

Online purchases from foreign retail sites reached $4.5 billion in 2021, up from $3.5 billion in 2020, with 41 percent purchases originating from the United States. Although in 2020, the United States was ranked number one, other countries such as China are expanding their presence in the Korean e-commerce market. Korean consumers have been diversifying their shopping habits, so they are buying from more than 30 countries now.

Business to Business (B2B) E-commerce                                                                                                           

Korean B2B e-commerce market data is not available; however, due to the explosive expansion of business to consumer (B2C) e-commerce and tough competition among e-commerce players, these companies are expanding consumable sales to small and medium size companies.  Interpark acquired a B2B e-commerce company called “I Market Korea” in 2011, and other major B2C e-commerce companies started to establish B2B e-commerce business teams afterwards. G-market was the first one to launch a B2B shopping site called “Biz on” in 2012. Auction also has B2B sites called “Biz club” for food ingredients and “Biz plus” for other consumables, and We Make Price launched its B2B platform, “We Make Price Bizmall” in 2016. In 2021, GS Retail and Coupang opened their B2B e-commerce platforms. With 5.4 million business owners and 3.5 million small and medium-sized companies in Korea, the B2B e-commerce market is expected to be very competitive.

E-commerce Services                                                                                

In 2021, food delivery services were the most popular services purchased through Korean e-commerce platforms, representing 13.3 percent of the total e-commerce sales. Before the COVID-19 pandemic, however, food delivery services occupied only 2.2 percent of the total e-commerce sales while travel and transportation services were the most popular items occupying 12.9 percent. In 2021, Koreans did not travel as much as before and spent significantly less money dinning out while ordered more food from restaurants by delivery services.

E-commerce Intellectual Property Rights                                                                 

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

Business to Government (B2G) E-commerce                                                                                                    

For B2G E-commerce, Korea On-line E-procurement System (KONEPS) is the only channel in Korea. In 2021, 63,798 public organizations and 668,964 companies were registered on this system with a total volume of business at $105 billion. The site dealt with more than 65 percent of Korea’s public procurement market, which was about $160 billion in 2021 and is recognized for its high standards by the UN and OECD.

Online Payment                                                                                                         

With the continuous growth of online shopping, electronic payment services via PC and mobile are increasing.  For Payment Gateway (PG) service based on credit cards, the average number of usages a day exceeded 21 million, and the average daily payments reached $ 790 million in 2021.  In addition, mobile payment & digital wallet service are attracting more users. According to a survey by Economist, respondents picked Kakao Pay (78.8 percent), Naver Pay (72.2%) and Toss (59.3%) as the most frequently used digital payment systems. In 2021, on average 14.5 million transactions per day were made by digital payment services and the daily sales amount was worth $392 million in Korea.

Mobile E-commerce                                                                                                                 

Mobile e-commerce is the main driver of the explosive e-commerce growth. While online shopping grew by 21.0 percent in 2021, mobile e-commerce increased by 27.6 percent. Purchases from mobile platforms make up 71.6 percent of the total e-commerce market value.

Digital Marketing

In 2021, the size of the digital advertisement market was estimated at $6.6 billion, up from $5.0 billion in 2020.  Since 2016, digital advertisement has been leading the Korean advertising market ever since the market value exceeded the size of the TV ads market. It occupies 53.7 percent of the total advertisement market now and is expected to continuously growing.  Previously, Search Ads were more dominant than Display Ads, however, Display Ads (51.9 percent) surpassed Search Ads (48.1 percent) in 2021 due to the increased traffic to Youtube and other video streaming services in Korea. More companies took advantage of advertising their products and services through video platforms.

Social Media                                                                                                                            

According to a 2021 study by DMC Media, 89.3 percent of Koreans use social media, and it is 1.7 times greater than the world average, which is 53.6 percent. The study further noted that Youtube (37.6 million), Band (19.7 million), Instagram (18.9 million), Facebook (13.7 million) and Kakao Story (9 million) had the greatest number of users in Korea. On average, Koreans spent 1,627 minutes on Youtube, 606 minutes on Twitter, 534 minutes on Instagram, 445 minutes on TicToc and 431 minutes on Facebook every month.

Major Buying Holidays                                                                                           

Seollal (Lunar New Year’s Day- Winter), Children’s Day (May 5th), Parents’ Day (May 8th), and Chu-seok (Fall - the 15th day of the 8th lunar month) and Christmas, are major buying holidays in Korea. When purchasing from foreign online shopping sites, Koreans also follow foreign countries’ buying holidays such as China’s Singles’ Day (November 11- Guanggun Jie) and Black Friday in the U.S. (Day after Thanksgiving) to get the best deals.


Of the $4.5 billion spent by Korean consumers at overseas e-Commerce platforms in 2021, $1.8 billion was purchased from the United States. According to the Korea Customs Service, dietary supplements, apparel, and food products are the most popularly sourced items from U.S. while cosmetics and electronics are sourced more from the E.U. and China than the U.S.

Trade Shows      

CS Korea was not able to identify any trade shows focusing on electronic commerce. CS Korea does have an extensive list of Korean retail trade shows, which can be obtained upon request. However, most of these trade shows tend to be B2C instead of B2B.

Key Contacts

Local Contact

Ms. Jinjoo Lee
Commercial Specialist
Commercial Service Korea
U.S. Embassy Seoul
188 Sejong-daero, Jongno-gu
Seoul 03141, Korea
Tel: 82-2-397-4324