South Korea - Country Commercial Guide

Describes how widely e-Commerce is used, the primary sectors that sell through e-commerce, and how much product/service in each sector is sold through e-commerce versus brick-and-mortar retail. Includes what a company needs to know to take advantage of e-commerce in the local market and , reputable, prominent B2B websites.

Last published date: 2020-09-21

E-commerce is a key component of the overall consumer market in Korea, a country with 99.2 percent of households having internet access via PC, mobile, or another device. 

Characteristics of e-commerce in Korea include:

· Domestic online purchases reached $115.4 up from $100.8 billion in 2018. High penetration of smartphones is the main factor driving market growth. While purchases on PCs increased from $38.8 billion in 2018 to $41.0 billion in 2019, purchases on mobile phones increased from $ 62.0 billion in 2018 to $74.3 in 2019.

· The most popular products sourced from domestic online retailers in 2019 are travel & transportation services (12.6 percent), clothing (11.0 percent), home appliances & electronics (10.7 percent), food & beverage (9.9 percent), cosmetics (9.1 percent), household items (7.4 percent), and food services (7.2 percent).

· Online purchases from foreign retailers have also rapidly increasing because Korean find less expensive prices on overseas websites even after adding-in international shipping fees and import duties. Cross border e-commerce has reached $3.3 billion in 2019.

· 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 2019 are dietary supplements (19.7 percent), apparel (17.9 percent), and electronics (11.3 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 April 2019, CS Korea completed an International Market Insight (IMI) report, describing how Koreans make purchases via foreign online retailers. This document can be found under “market research” on the CS Korea website 

Internet Penetration                                                                  

According to Ministry of Science and ICT, by 2019, Korea’s internet user population and smartphone user population reached 91.5 percent and 91.8 percent respectively. In addition, Korea ranked 16th globally with over 46 million internet users. 

In April 2019, Korea became one of the first countries to launch commercial 5G network services nationwide. Thanks to its 5G networks, Korea ranks first in the world for mobile connection speed according to the Speedtest Global Index, April 2020.  As of now, the country has 5.36 million 5G subscribers. With the domestic mobile carriers’ aggressive promotion along with the government pressure on expanding 5G infrastructure, the country expects to have 10 million 5G subscribers within 2020.

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 network services, TV home shopping, 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 $115.4 billion in 2019 up from $100.8 billion in 2018. 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. Coupang was ranked as the top e-commerce site in 2019 (combined mobile and PC users).

Cross Border E-commerce                                                       

Online purchases from foreign retail sites reached $3.1 billion in 2019, up from $2.7 billion in 2018, with 48.6 percent purchased originating from U.S online retailers. Although in 2018, the United States was ranked number one with 53.3 percent of market share, the EU and China are expanding their presence in the Korean e-commerce market.  

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, e-commerce companies have been looking to expand into B2B e-commerce on consumable sales to small and medium size companies. In 2012, G-market was the first one to launch a B2B shopping site called “Biz on.” Auction also has B2B sites called “Biz club” for food ingredients and “Biz plus” for other consumables. Interpark has “I market Korea” that integrates B2B and B2C services. We Make Price started “We Make Price Bizmall” in 2016. With 5.4 million business owners and 3.5 million small and medium-sized companies, the B2B e-commerce market is expected to be very competitive.

E-commerce Services                                                      

In 2019, travel and transportation services were the most popular items sold through Korean e-commerce platforms, representing 12.6 percent of the total e-commerce sales. Food delivery orders via mobile apps have been growing by eight times in the past five years. It recorded $2.6 billion of sales in 2019, representing 2.2 percent of the total e-commerce sales. 

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. Prior 2015, one counterfeit item could be brought into the country assuming that it was for personal use. However, Korea Customs Service is enforcing a stricter intellectual property law and no longer allows 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 2015, 48,000 public organizations and 320,000 companies were registered on this system with a total volume of business at $42 billion. The site deals with more than 60 percent of Korea’s public procurement market, which is about $105 billion and is recognized for its high standards by the UN and OECD.

Online Payment                                                                         

According to a survey by the Bank of Korea, the most preferred payment method for customers using personal computers (PC) and mobile shoppers is by credit card.  The next preferred method is by account transfer for PC and debit card and phone payment for mobile.

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 8 million, and the amount of total payments reached $136 billion in 2018.  In addition, mobile payment & digital wallet service such as Samsung Pay and Naver Pay are attracting more users. On average 3.9 million cases per day were paid by smart pay services and the total sales amount to $41.4 billion in 2018.

Mobile E-commerce                                                                  

Mobile e-commerce is the main driver of the explosive e-commerce growth. While online shopping grew by 10.3 percent in 2018, mobile e-commerce increased by 31.7 percent. Purchases from mobile platforms make up 61.5 percent of the total market value.

Digital Marketing

In 2018, the size of the on-line advertisement market was estimated at $5 billion, up from $4.3 billion in 2017. As to each on-line advertising channel, the sales amount of personal computer (PC) advertisements remains almost the same, while the mobile channel grew by 26 percent in 2018. PC advertisements declined to 34.7 percent of the on-line advertisement market from 40.0 percent in 2017. Mobile advertisements, however, accounts for 65.3 percent, showing an increase from 60.0 percent in 2017. Among on-line advertisement types, display advertisement takes up 51.3 percent and search ads 48.7 percent. The on-line advertisement market exceeded the size of the TV ads market in 2016 and is expected to extend the lead in the future.

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), 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.

Social Media                                                                             

According to a 2018 study by App Ape, the most widely used social media in Korea is Band followed by Instagram. In a 2016 survey by Korea Information Society Development Institute, Kakao Story was the most widely used social media in 2016 but it became the third most widely used social media in 2017.


Of the $2 billion spent by Korean consumers at overseas e-Commerce platforms in 2017, $1.1 billion was purchased from the United States. According 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

Ministry of Trade, Industry and Energy (MOTIE) -

Ministry of Strategy and Finance (MOSF) -

Korea Customs Service (KCS) -

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