South Korea Stands Out as Ecommerce Market for U.S. Retailers

Jun 19, 2014 1:47 PM  By

If you’re a U.S. retailer looking to expand your ecommerce business globally, South Korea may be the place to do it, according to a report by Borderfree.

What makes the country stand out, the report found, was its strong currency and its passion for consumers shopping online. Other reasons include South Korea’s broad access to credit cards for online payments and its world leadership in broadband speed and penetration.

In 2013, cross-border spending by South Koreans rose 47% to about $1 billion, according to the Korea Customs Service. Top spenders using Borderfree retailers spent an average of $791 U.S. dollars each.

However, the average order value among South Koreans fell 5% last year to $158. This is considered low compared to other Asian cities likes Singapore and Hong Kong, where the average order value was $234 and $321.

Nearly 80% of South Korea’s population is online, which makes it the most connected country in the world. According to eMarketer, retail ecommerce spending in South Korea is forecast to rise from a total to $19.0 billion to $25.3 billion by 2017, an increase of 33%.

Online retail spend in South Korea was 13% of total retail spend in 2012, underscoring the demand among tech-savvy shoppers. About three-quarters of South Koreans own smartphones, while smartphone penetration for those aged 18-24 is 98%.

Borderfree also found that an increasing number of South Koreans shop overseas retailers to find lower prices, leverage parcel forwarding to save on shipping costs and join online communities to resell imported items they don’t want.