South Korea has the most advanced internet business environments twinned with one of the world’s best-performing wireless networks. The country is wealthy, connected and densely populated: a fertile breeding ground for ecommerce. Almost 100% of households have an internet connection, and mobile shopping is easily accessible in an economy that ranks as the 11th largest in the world and the 4th largest in Asia.
Even though 15 cents of every retail dollar in South Korea is spent online, Amazon is not a major player in the market, and there are good reasons for this; the market is fiercely competitive and customers’ tastes are highly sophisticated and specific.
The prize at stake is high, since Asia is a growing economy. So, if you are planning to expand your business to Korea, consider the following marketplaces since locally they are, by far, more significant than Amazon.
The Gmarket website is a popular Korean marketplace among consumers, especially because they are guaranteed that they will find the desired technology and clothing. It is also popular for its massive advertising campaigns – both online and offline – as the site is working to consolidate its position regarding brand recognition, funding ability and product sourcing capability.
Recently they released an extensive advertising campaign starring Heechul – a famous singer – and Seol Hyun – a favourite actress and singer – targeting a younger generation of buyers, and three years ago, they sponsored a large scale music event in Seoul.
Gmarket is similar to a tradition in Korea: Business-to-consumer ecommerce was a new niche in Korea in 2000 when the local founder Young Bae Ku launched the website. After several years, Gmarket has collected a wealth of knowledge on how to sell successfully in the region, catering the needs of small-to-medium sized sellers in the B2C segment. These skills and experience led to eBay Korea Co., Ltd acquiring the marketplace in 2009.
Today Gmarket is the South Korea’s leading ecommerce marketplace and online auction site (34.8% by visits). Here people from all around the world, not just from Korea, buy and sell goods. But is Korea big enough? Gmarket is eyeing overseas markets, hoping to capitalise on its success at home. The platform is entering the Japanese market after a recent agreement with Rakuten, and is planning to debut in the US and China to follow in upcoming years.
With 34.2% of Korean online traffic, 11Street is currently neck-and-neck with Gmarket for the Korean marketplace top spot. The company is a joint venture between the mobile firm Celcom Axiata Berhad and SK Planet Ltd, another Korean ecommerce site, and it is active in several markets in Asia.
At 11Street, they pride themselves on offering safe transactions to customers, free product listings and providing business training to sellers. The marketplace satisfies consumers that are searching for technology and electronics or fashion and accessories primarily. The company has a large budget for promotions and coupons with sections of the site dedicated to this activity, including downloadable coupons.
Coupang is considered to be the fastest-growing South Korean ecommerce site of all time, with big name backers such as Sequoia, Greenoaks Capital and Rose Park Advisors. The company was founded in 2010 by the Korean Bom Kim, and is headquartered in the famous Gangnam District in Seoul, with offices in Los Angeles, Seattle, Shanghai, and the Silicon Valley.
The company has invested massively in its own logistics and delivery system called Rocketday that allows for same day purchases.
Starting off as a daily deals website in 2010, Coupang today is No. 243 in the Internet Retailer 2016 Global 1000, and in 2016 tripled the number of retail items to 700,000 compared with 2015.
Interestingly, Coupang has succeeded in a market where not even Amazon has. As in other Asian marketplaces, they have done this by innovating to meet the specific needs and tastes of the local consumer. This primarily included things like same-day delivery and investing heavily in mobile optimisation, resulting in the company having around 80% of their traffic and revenue from mobile.
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