Unlike the United States where Amazon has pretty much become the king of e-commerce platforms, the South Korean e-commerce market is diverse and incredibly scattered. As a consumer, you certainly have options, but the caveat is that you may not know which e-commerce platforms are the best to use. Here is a quick look at a few different e-commerce platforms available to use in South Korea.
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Some interesting Korean marketplace facts:
- According to Yonhap News Agency, South Korea’s e-commerce market ranked fifth in the world in 2020 with sales at US$104.1 billion last year.
- Korean boy band, BTS, and other cultural exports like the film, Parasite, and Korean girl group, Black Pink, contribute to Korea’s soft power and its economy. The new Korean wave (or Hallyu) has also increased demand in other sectors like Korean beauty and food products overseas.
- According to the World Economic Outlook Database, Korea’s GDP (Gross Domestic Product) in 2020 was $1.6 trillion USD and ranked 10th in the world.
- The Datareportal states that the internet penetration rate for South Korea stands at 96% in 2020.
Koreans love to shop and they love to shop online!
There Is No Clear Winner in South Korean E-commerce
Though Gmarket seemed to dominate the Korean e-commerce platforms in May 2020 according to Statista by the number of unique visitors, other platforms like Coupang are gaining rapidly in popularity. In my experience, Coupang has the best user experience end-to-end, the fastest delivery due to a strong focus on logistics, and shines in the B2C (business to customer) market.
Why Payment Gateways Matter?
When shopping online in South Korea, you’ll be faced with an annoying checkout process where you’ll have to click through another third-party payment popup to complete your transaction process. That, my friends, are the payment gateways that businesses in South Korea must use to process your debit or credit cards … Or even bank transfers which is an odd payment method for me as an American.
The most popular payment gateway in South Korea is KG Inicis which has the number one market share in South Korea for electronic payments. Other payment gateways include NHN KCP (Payco), KSNET, NICEPAY, and KICC (EasyPay).
Of course, you’ll get used to them. Unfortunately, it adds another layer of complexity to the shopping experience, and some of these popular payment gateways do not accept credit cards and debit cards that were issued outside of Korea.
Personal Anecdote: I once spent hours trying to checkout on the Korean Ikea website when I first arrived in South Korea because their payment gateway didn’t accept any of my US-issued credit cards. I emailed customer service, and they were like, “Oh, it should work fine.” Lies, I tell you. Lies. Of course, it worked perfectly when I eventually managed to get a Korean debit/credit card. That is why I think these payment gateways are often garbage.
Most of the payment gateways in South Korea accept local (Korean) debit or credit cards, mobile phone payments, bank transfers, and installment payments through your Korean credit card. You can see the payment methods that KG Inicis supports on their website. Digital payment apps like Samsung Pay, Naver Pay, Kakao Pay, SK Pay, SSG Pay, ZeroPay, and L Pay (Lotte) are also widely supported on most e-commerce platforms and online stores in South Korea. Once you get the hang of using those digital apps, it becomes way too easy to shop online.
Naver Shopping is the best platform for C2C (Customer to Customer) due to the sheer volume of individual sellers on the platform and the low entry barrier. When in doubt, look on Naver. It feels like everybody and their mama has a Naver Store.
Because Korea is so integrated with the Naver ecosystem — Google has been trying to break through for years but met with resistance — it’s no surprise that Naver sales are the highest among e-commerce platforms in South Korea.
As a consumer, it’s easy to shop individual stores on the Naver ecosystem and checkout with their native payment system, Naver Pay. You can also create an account on Naver in English, but that’s about it. The rest of the platform is fully in Korean and most stores are still in Korean. Of course, you can remedy that with the Google Translate plugin on the Google Chrome browser if you’re crafty.
Gmarket is was founded in 2000 by Interpark and has been a subsidiary of eBay since 2009. You probably wouldn’t know it though because Gmarket doesn’t look remotely like ebay. And guess what ebay Korea also owns? Auction.co.kr.
I always, always recommend newcomers to South Korea to start off with Gmarket. For foreigners new to shopping online in Korea, you can easily switch from their Korean language website to their international English language (global) website.
You can also easily pay for your goods at Gmarket with a foreign (e.g. US) credit card or via bank transfer through your Korean bank if you don’t yet have a physical debit or credit card. Gmarket was the first Korean online shopping site I used upon arrival and the learning curve was easy.
Personal Anecdote: When I first arrived in South Korea, I shared a link to Gmarket to my friend in Brooklyn, and he was able to send me a little bag of plant seeds and dirt. It was the cutest housewarming, “Welcome to Korea!” gift. But just goes to show that you can actually use their international site to send gifts to friends who live in South Korea.
One thing to take note of is that the prices are almost always better if you switch to the Korean-only site and searching for keywords in Korean. Sometimes that means running some words through language translation apps like Papago, copy & pasting them back into the search box, and seeing what shows up. This applies to all Korean online marketplaces and not just GMarket. Why? Because these sellers are (a) catering to a Korean-speaking market and (b) not optimizing their listing for English speakers.
I still prefer Coupang (below), but GMarket is the easiest Korean website to use with a foreign credit card.
11Street is a subsidiary of SK Telecom in South Korea and has more recently forged an alliance with the mega-giant, Amazon. However, 11street only commands about 6% of the e-commerce market share in South Korea.
I’m staying tuned to this little business “friendship” because Amazon has been trying to enter the South Korean market forever. And from what my friends tell me, the Korean government has a tendency to shoo away foreign companies that they see potentially overtaking local companies … For starters. But regardless, 11street will be expanding its selection of overseas goods in high demand using Amazon marketplace data to identify what to stockpile on their own website. And that means that I get to (most likely) order more of my favorite international brands without having to pay those ridiculously high shipping costs and customs fees.
Fortunately, 11street does have an English-language website and accepts all payment providers. In terms of ease-of-use though, if I’m searching for, say, Hera Beauty products in English, I’ll get anything from their sunscreen line to silicone nozzles, so there’s that. I wouldn’t say it’s close to being the greatest shopping platform ever. But who knows? You might like it.
Modeled after Amazon.com and founded by a Harvard dropout, Coupang is an online e-commerce store in South Korea. Much like Amazon Prime shipping, Coupang built upon its own logistics infrastructure to offer one-day delivery or Rocket Shipping.
Fun Fact: According to Wikipedia in 2018, the founder of Coupang, Bom Suk Kim, is South Korea’s newest and second-youngest billionaire at the age of 40.
Prices are very competitive at Coupang, and I often buy beauty products or toiletries on Coupang that end up being less expensive than Olive Young.
If you subscribe to Coupang’s Rocket membership — ahem, very much like Amazon Prime and Amazon Fresh — you have access to their Rocket Fresh delivery. Rocket Fresh delivery is a grocery service that allows customers to order fresh food items before 10 a.m. and receive them by 6 p.m. If something is out of stock, check back the next morning for the product to be restocked.
I was so surprised at how everything basically ships next-day, but my coworker reminded me that South Korea is only slightly larger than the US state of Indiana. They also offer free 3-day shipping on globally-shipped items (“Rocket Direct Purchasing of Foreign Goods”) which are marked by a purple rocket icon.
I also use Coupang when I need to find plus-sized tights in Korea — because I am a very tall human — or when I need to stock up on a lifetime supply of Ritter Sport chocolates to hoard. It may sound like I’m shilling Coupang really hard, but I just really like it. I just hope that perhaps someday Coupang can introduce a fully English-language app, so I can spend more of my hard-earned money on premium snacks in two clicks or less without having to double-check if I accidentally ordered some cardboard-tasting, off-brand tortilla chips.