South Korea

From Grin Labs Wiki
Jump to: navigation, search


Domestic and Preferred Card Schemes

According to a survey by Korea Internet and Security Agency, PC and mobile shoppers preferred payment method is credit card accounting for 72.4 percent of PC and 68.1 percent of mobile shoppers. Next followed debit card and account transfer (both Internet and mobile banking service).[1]

Alternative Payment Methods

Next followed debit card and account transfer (both Internet and mobile banking service).[2]

Other Payment Methods

Cash on delivery (4%), eWallet (3%), PrePay (2%) [3]

Digital Invoicing


Customer Experience


Payments Regulation


Local entities

Payment Gateway category like Samsung Pay and Naver Pay is attracting more users. On average 860,000 cases per day were paid by smart pay services in 2016 and the sales amount to $ 22.3 million.[4]

Mobile payments

While cards remain by far the most dominant method of payment (83% market share), alternative payment methods are expected to loosen the grip of card-based transactions, with online payments growing from 17-27% from now to 2019.[5]


As competition between e-commerce companies is increasing, quick delivery service is a key to attract more customers. Coupang, one of the most popular e-commerce sites in Korea, announced in 2015 that it would invest USD 1.3 billion to build logistics infrastructure for its delivery service called “rocket delivery.” [6]



Import Duties

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.[7]


Despite a very intense brick-and-mortar retail environment, over 70 percent of direct sales in Korea are made via the Internet and mobile devices. Korea’s multi-level marketing sales for 2015 approached USD 4.7 billion, which is a 14.6 percent increase from 2014 (USD 4.1 billion). The number of registered multi-level marketing companies in Korea has increased to 137. It is reported that these companies employ some 8 million sellers/distributors.[8]

In 2017, the size of the online advertisement market is expected to be about USD 3.5 billion, up from USD 3.0 billion in 2015. As to each online advertising channel, personal computers (PCs) are showing a negative growth rate, -2.5 percent in 2016 and -1.8 percent in 2017. Mobile, however, grew by 6.1 percent in 2016, and is expected to grow by 4.6 percent in 2017. Online media use PC advertisements (59.4 percent) more than mobile advertisements (40.6 percent). Among online advertisement types, display advertisement takes up 48.7 percent and search ads 45.2 percent. Mobile advertisement sales increased to USD 883 million in 2015 and video ads on social media are driving the market. The market is expected to get close to the size of the land-based TV ads market in the near future.[9]

The Korean government reduced the restrictions on MLM companies by passing legislation eliminating most existing market barriers against MLM products, such as the obligation to disclose retail prices on MLM product labels. Oversight of the MLM industry is the responsibility of the Korea Fair Trade Commission (KFTC).

MLM activity for U.S. products is concentrated in the cosmetics, cleaning products, health and wellness, and kitchenware industries -- and has been expanding. MLM companies should promote their products and services appropriately and efficiently by carefully analyzing Korean market trends and sophisticated and mature Korean consumers. Accurate knowledge of the Korean retail and consumer market can prevent unnecessary conflicts with government agencies, consumer ‘watchdog’ groups, or industry groups. There are numerous consumer, business & industry associations, governmental groups, and think-tanks which regularly collect valuable information on consumers and consumer trends. [10]


Digital Buyers by Age and Gender (in the millions)

16-24 : M - 2.1, F - 2.1

25-34: M - 5.8, F - 5.9

35-44: M - 3.5, F - 3.9

45-54: M - 2, F - 2.2

55+ : M - 1.7, F - 1.6 [11]

Social Media

43.1 percent of the Korean population use social media, according to a survey by Korea Information Society Development Institute. Kakao Story is the most widely-used social media (45.7 percent) followed by Facebook (30 percent). Each age group uses different social media sites. Facebook is favored by teenagers and those in their 20’s, while Kakao Story is favored by those in their 30's and above.[12]

Major shopping categories

The most popular online shopping categories were online travel arrangement and reservation services, home electronics and appliances, and fashion and apparel. [13]

The purchase of groceries is where online shoppers in South Korea stand out, as’s report reveals. A double-digit share of retail sales of FMCG was made online in 2016, while in other advanced markets such as the USA, the UK and France this share is still in single-digits. Moreover, above one-half of online sales of groceries was transacted via mobile devices.[14]

The most popular foreign sourced products from on-line retailers by Koreans are dietary supplements (16 percent), cosmetics (14 percent), food (13 percent), apparel (12 percent), footwear (8 percent), and electronics (7 percent).[15]

Major retail holidays

Chu-seok (The 15th day of the 8th lunar month), Seollal (Lunar New Year’s Day), Parents’ day (May 8th) and Children’s day (May 5th) are major buying holidays in Korea. However, when purchasing from foreign online shopping sites, Koreans also follow foreign countries’ buying holidays, like Black Friday, to get the best deals.[16]

Legal / Regulatory

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. [17]

FX Policies

With the FTA, 95% of tariffs on U.S. imports were eliminated by March 15, 2017. The U.S. Department of Commerce’s FTA Tariff Tool can help U.S. exporters identify the harmonized system number for their products and the associated tariff rates over the next ten years. Exporters can also contact the U.S. Agricultural Trade Office, affiliated with the U.S. Embassy in Seoul, for specific information on agricultural tariff rates.

Korea also maintains a tariff quota system designed to stabilize domestic commodity markets. Customs duties can be adjusted every six months, within the limit of the basic rate, plus or minus 40 percent.

Korea has a flat 10 percent Value Added Tax (VAT) on all imports and domestically-manufactured goods. A special excise tax of 10-20 percent is also levied on the importation of certain luxury items and durable consumer goods. Tariffs and taxes must be paid in Korean Won within 15 days after goods have cleared Customs. [18]


As a consumer society with an internet penetration rate of close to 90 percent among the population, it is no surprise that e-commerce holds a strong position in South Korea. [19]

South Korea has a well-developed Internet infrastructure; its Internet penetration is the highest in the region. More than 50% of Internet users make purchases online and among them, two-thirds do so at least once a month.[20]


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.[21]

Mobile appetite

Mobile retail e-commerce sales are also particularly strong in South Korea. In 2015, industry data suggests that 37.5 percent of online retail sales were generated via mobile device. Mobile shopping transaction volume amounted to 34.7 trillion Korean won in 2016, accounting for 53.46 percent of total online shopping value during that year. As of the fourth quarter of 2016, 55 of the population in South Korea have made a purchase via mobile phone. [22]

More than 50% of B2C E-Commerce sales in this country stem from mobile. Driven by convenience of mobile shopping, consumers in South Korea increasingly turn to mobile devices for making purchases online. As of early 2017, smartphone stands as the favorite device of South Korean online shoppers, with the share of Internet users buying on mobile exceeding the share of those using computers to shop.[23]


  1. "Korea - eCommerce"
  2. "Korea - eCommerce"
  3. WorldPay "South Korea eCommerce Brochure"
  4. "Korea - eCommerce"
  5. WorldPay "South Korea eCommerce Brochure"
  6. "Korea - eCommerce"
  7. "Korea - eCommerce"
  8. "Korea - Direct Marketing"
  9. "Korea - eCommerce"
  10. "Korea - Direct Marketing"
  11. eShopWorld "South Korea eCommerce Insights"
  12. "Korea - eCommerce"
  13. Statista "E-commerce in South Korea"
  14. yStats "South Korea b2c E-commerce market 2017"
  15. "Korea - eCommerce"
  16. "Korea - eCommerce"
  17. "Korea - eCommerce"
  18. "Korea - Import Tariffs"
  19. Statista "E-commerce in South Korea"
  20. yStats "South Korea b2c E-commerce market 2017"
  21. "Korea - eCommerce"
  22. Statista "E-commerce in South Korea"
  23. yStats "South Korea b2c E-commerce market 2017"