KOREAN E-COMMERCE LANDSCAPE/TREND - BY DEBBIE LEE - Macquarie Group

KOREAN E-COMMERCE LANDSCAPE/TREND
BY DEBBIE LEE

INTRODUCTION

 Korean E-commerce Size/ Share

 Change in Market Share

 After COVID

 Distribution Landscape

 Naver VS Coupang

 Next Trend

                                  2021-05-31

KOREAN E-COMMERCE TIMELINE

                                                                              Top 2 : Naver and Coupang
      Downfall of E-Bay Korea/
                                                                    Category Specialization in E-commerce Platforms &
                                        Coupang’s Rapid Growth
      Rise of Naver Smartstore                                           Growth of Food/Grocery Online Purchase

              2018~19                             2020                                     2021

                                 COVID outbreak                  Coupang’s Debut on NYSC

OVERALL MARKET SIZE/GROWTH

                             Unproportionally Big / Rapid Growth (COVID)

                              E-commerce Revenue: KRW104 trillion
                               (US$90.1bn) in 2020 (annual growth of 22.3%)
                              Expected to reach KRW163. 7 trillion
                               (US$141.8bn) in 2024
                              COVID Outbreak: Not temporary but lasting
                               impact on consumer’s purchase pattern
                               changes

                                                            2021-05-31

COMPETITIONS
-   Last Year’s Market share
-   Naver Vs Coupang
-   No. 1 : Naver
-   Coupang Rose from No 5.
    to No 2.

                               2021-05-31

MARKET SHARE CHANGES (TOP 5 PLATFORMS)

                               E-Bay Korea’s Share
                                Dropped,
 Ebay Korea
       11st                    Streamlined Platform:
                                Naver
      Naver
WemakePrice                    Rocket Delivery: Coupang

   Coupang                     Time-commerce : TMon

                                                           2021-05-31

AFTER COVID

 Online Sales (by Categories)

 Up: Food, Fresh Grocery, Electric Devices
  (mobile), Computer Devices,

 Down: Cosmetics, Travel, Leisure and Holidays,
  Culture

RISE IN FRESH FOOD / GROCERY

Top 5 E-commerce Platform After COVID Outbreak

  Coupang’s Share very high, next : Market Kurly, Coporates (E-Mart Mall, SSG) and
  Naver/Gmarket
                                                                                     2021-05-31

FASHION DISTRIBUTION LANDSCAPE   (BEFORE, BUT FAIRLY RECENT)

                                                  Consumers

                                                       2021-05-31

FASHION LANDSCAPE AFTER COVID
            Direct purchase from Chinese big companies

            Individual consumers direct purchase from Source

            Rise of Fashion-specific online platforms (A-bly, Mushinsa)

                                                                                          Ably

                                                                                                  Mushinsa

Chinese Source                                                     Shinsang
                 Dongdaemun                                         Market
                              Online small
                                               Consu              (Dongdaemun)
                                                                                 Chinese source
                              sellers          mers

NAVER VS COUPANG

 Low Referral Rate (around 4%)                  High Referal Rate (10.5%)

 Fast Payment (faster type recently adopted)    Late Payment (Serious Cash Flow issue)

 Streamlined web site /return issue             Insufficient data compare to Naver/ web site
  management                                      rarely been updated

 Data Analytics/ Search word algorithm
                                                 BUT, new consumer influx (thanks to rocket
                                                  delivery/wow membership)

                                                                                2021-05-31

NAVER’S STRENGTH
Low Referral Rate (2~6%)
Platform Very streamlined
(return items management)
Fast Payment (1-2 day after   (above) Naver Seller Page >
                              Analytics> Traffic Source
purchase/delivery
confirmation)                 *Much more detailed info on
                              traffic Time/Gender/Age group
Data Analytics                available
Ad Efficiency                 (left) Refund Rate

                                   2021-05-31

NAVER’S KEYWORD
ALGORITHM/ AD
Strong Keyword algorithm
Separate AD page (high Ad
efficiency)

COUPANG’S
PROBLEM
Low Cash flow issue : Late
payment (70% weekly/30%- at
the end of the next month)
High Referral Rate (10.5%)

BUT
Strong Influx of New
Consumers (Strong Delivery)   Coupang’s signature Rocket delivery applies to only small proportion of
                              items sold in Coupang BUT Its impact on consumer’s image/purchase
                              pattern in the site

                                                                                            2021-05-31

COUPANG’S
STRENGTH
Fulfillment
>Fast delivery made possible
Wow Membership
:Monthly 2900RKW (2.5 USD)
: minimum purchase 19k KRW
(around 17USD)
>Consumers linger/stay
longer hours to meet the
minimum purchase amount

                               2021-05-31

OTHER PLATFORMS

 Kakao

 Time-commerce Tmon

 WemakePrice/Gmarket

 SSG/Lotte (Corporate)

                          2021-05-31

WHAT NEXT?

 Naver’s Fulfillment system building

 Live-commerce

                                        2021-05-31

Q&A

      2021-05-31

Thank you

            2021-05-31