South Korea - highly attractive market

Internet usage

Land of opportunity for online business, South Korea.

South Korea is the 13th largest economy by GDP basis and has one of the highest rates of Internet penetration in the world, with her citizens benefiting from widespread and high-speed broadband access.
Nearly 80 percent of the country’s population are online netizens, making her the most connected country on the planet.
In Q4 of 2013 the total number of mobile subscribers in South Korea was approximately 53,651,000.
The country had 10,012,400 Facebook users, or 20.5% penetration in December, 2012. 2 3

Great opportunity both B2B and B2C e-commerce market, South Korea

A new index recently published by the EIU (Economist Intelligence Unit) demonstrates that South Korea is the third positioned country amongG20 to capitalize on global e-trade opportunities. In "the G20 e-trade readiness index" report, sponsored by e-Bay,
Korea marks the first in mobile and broadband connectivity.4

South Korea presents one of the best opportunities for Global retailers who are looking forward to concentrating their e-commerce marketing strategies overseas.
Buying online from foreign sellers is one of hottest trends among young South Koreans currently.A lot of customers buy products through the English-version and Japanese-version websites, known in Korean as "Haeoi-jikgu" ("direct overseas purchase") which is a rapidly substantial fashion in South Korea. It tells that although they are forced to burden shipping charges, yet the total purchasing cost usually comes out cheaper than buying products from local vendors. Young Koreans have highly good feeling toward lots of overseas famous brands including not only US-based but European ones. They also very responsive to online purchasing methods, and many global retailers have found much more than expected success with localized online marketing campaigns in South Korea. Korea is ‘a very surely desirable market’ for cross border e-commerce oriented business people.5

Retail e-commerce sales are on the rise 6, 7

South Korea was the tenth largest crossborder market in 2013
by sales volume. Top-bracket spenders who shopped with retailers
spent an average of $790 U.S. dollars(USD) each in 2013.
Retail e-commerce spending is forecasted to rise from the total of $19.0
billion in 2013 to $25.3 billion by 2017, and the increase of more than 33%.

More credit cards than anywhere else8, 9

Almost all the South Koreans love using credit cards whenever payment methods are choosable. They have an average of five credit cards per person, vs. more than two cards in the U.S

Viral marketing 11

Koreans are highly responsive to online promotions.
Deals posted in online communities can go thru various viral media very fast.

Alright then, what type of online marketing channel should I use in South Korea?

Korea search market share categorized by lifestyle.13

PC Mobile Tablet
Naver Daum Google Naver Daum Google Naver Daum Google
Infomation Sharing 69.4 19.4 11.3 71.7 19.6 6.5 71.7 19.6 6.5
Early adopter 79.6 11.2 5.6 78.8 12.5 6.7 78.8 12.5 6.7
Social network
& fashion oriented
77.5 11.3 11.3 51.7 27.6 13.8 51.7 27.6 13.8
Funtionalist 76.5 12.2 7.8 87.0 6.5 6.5 87.0 6.5 6.5
Rational buyer 85.8 9.2 3.3 68.5 7.4 20.4 68.5 7.4 20.4
family &
culture oriented
81.5 11.3 3.2 65.4 11.5 15.4 65.4 11.5 15.4

South Korea is one of just three countries where the Google does not top. Naver dominates search-engine market in this country,
Daum marked in the second, and Google catching up with the third place. These local Korean portals have their own top-notch marketing tools and nearly every company running online advertising in South Korea use those marketing resources.

Naver holds 72.3% of PC search-ads and 73.9% of mobile search-ads in South Korea’s online ad market,followed by Daum, Google, and Nate. More lately, many foreign brands are expanding their market share through website-localization and usage of Naver to publicize their products in the Korea. Korea's online advertising market is measured to about $3,230,000,000 as of 2014 and the market size is rapidly expanding year after year.14, 15

Sources

  • 1 DMC Media report, 2014
  • 2 http://www.fosigrid.org, GRID maps, 2014
  • 3 http://www.borderfree.com press, 2014
  • 4 http://www.koreatimes.co.kr/
  • 5 http://www.borderfree.com press, 2014
  • 6 http://www.borderfree.com press, 2014
  • 7 Cha, Frances. "10 Things South Korea does better than anywhere else." CNN. Cable News Network, Nov. 27, 2013
  • 8 "World consumer lifestyle databook 2013", Euromonitor, 2013
  • 9 "State of credit report." Experian information services, 2014
  • 10 Statistics Korea
  • 11 Borderfree data from Jan. 2013 to Dec.
  • 12 http://globalvoicesonline.org/ Asia, 2014
  • 13 DMC Media report, 2014 Korean Click, 2013
  • 14 Korean Click, 2014
  • 15 Korean Digital Media & Marketing Intelligence Center, 2014

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