Consumer Attitudes and Online Retail Dynamics in South Korea01 Nov 2011 • by Natalie Aster
London – The Korean government has played an important role in the development of the domestic retail industry, with measures including the protection of Korean manufacturers against global manufacturers and the acceleration of the growth of the e-commerce sector through the Korea Institute for Electronic Commerce (KIEC). As a result of the global economic downturn in late 2008, South Korean GDP growth slowed to 0.2% in 2009.
In the third quarter of 2009, the economy began to recover, in large part due to export growth, low interest rates, and an expansionary fiscal policy, resulting in growth exceeding 6% in 2010. However, high income consumers continued to purchase products through online channels, even during the recession, resulting in strong growth of the online retail sector from 2005 to 2010 (the review period). In the future, the South Korean online retail market is expected to continue its growth and is anticipated to account for 12.1% of all purchases in 2015, according to the report “Consumer Attitudes & Online Retail Dynamics in South Korea” by iCD Research.
In 2010, online retail penetration in South Korea exceeded global average penetration rates by 3.3 percentage points. By 2015, it is expected to exceed the global average penetration by 5.4 percentage points.
South Korea Online Sales vs. Global Average (% of Total Retail)
Source: ICD Research Analysis
Consumer Attitudes & Online Retail Dynamics in South Korea
Published: October, 2011
Price: US$ 1,450.00
The popularity of social networking websites among South Koreans is growing rapidly, with an increasing number of people joining such sites. They are particularly popular with Koreans aged between 16 and 19, who are highly active users and rely on the feedback given on these sites when deciding whether to purchase any products or goods. Consumers‘ product choices are also influenced by what friends within their social networks are saying about particular products they have purchased.
South Korea has the world’s highest average broadband speed at over 5 mbps. This is due to the fact that the South Korean government has initiated numerous programs for better broadband connectivity, one being the gigabit project. Here, the South Korean government plans to provide 1 gigabyte per second internet connections to 1,500 households in five South Korean cities for as low as KRW30,000 (US$27.60) per month by 2012. The government also plans to increase the country’s wireless broadband penetration. In 2009, 74% of the country’s internet users had internet speeds of over 5 mbps and, with numerous government plans in progress, these numbers are expected to increase over the forecast period. The expected increases in internet penetration and average broadband speed offer Korean retailers the opportunity to provide better facilities and interfaces for the country’s consumers.
More information can be found in the report “Consumer Attitudes & Online Retail Dynamics in South Korea” by iCD Research.
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