Top 20 South Korea Market Trends in Charts
South Korea, the 10th largest economy in the world, is a powerhouse with a staggering GDP of 1.7 trillion USD. But what truly sets this country apart is its digitally savvy population. Koreans are absolute pros at consuming content on platforms like YouTube and Instagram, shopping on Coupang, and connecting with others through the online marvel that is Kakao. Trust us when we say, no other country in the world matches their level of digital immersion. It’s like peering into a crystal ball, giving us a glimpse of what the future holds for economies in North America and Europe.
Now, let’s talk about the giants of Korea. Samsung, LG, Hyundai — these names ring a bell, right? Of course they do! These mega Korean conglomerates, alongside the allure of Kpop and Kdrama, have gained worldwide recognition. However, when it comes to exploring business opportunities in this vibrant Asian nation, things take a different turn. Global brands face a mighty challenge breaking into the local market. Why, you ask? It boils down to a lack of English information, limited understanding of the local market dynamics, and a dearth of experience with local marketing channels.
But here’s the exciting part: Korean consumers absolutely adore global brands. Take a stroll through Seoul, and you’ll be surrounded by luxurious Mercedes Benz automobiles. Witness the daily Netflix binge sessions that have become a way of life for the people here. And let’s not forget the staggering billion-dollar sales of top luxury fashion brands like Rolex, Bulgari, and Salvatore Ferragamo in 2019 alone. Rest assured, those brands that go the extra mile to succeed in Korea are handsomely rewarded.
Now, let’s get to the heart of this article. Our mission? To enhance your understanding of the South Korean market. We’ll dive into a range of fascinating topics, covering everything from the impact of the coronavirus to e-commerce, consumer behavior, advertising, trade, economy, and investment trends. But hold on, we won’t just be throwing heaps of information at you. We’re going to tell stories — vivid stories presented in easy-to-digest charts. You see, AJ Marketing is on a mission to assist global brands in conquering Korea.
So sit back, relax, and prepare to discover how you can make your consumers revel in the sheer awesomeness of your global products.
CORONA VIRUS IMPACT
1. Korea Business Activity Index
Let’s talk about what went down in February 2020. Brace yourself, because the Korea Business Activity Index took a dip across all categories compared to the previous month. The manufacturing sector’s biggest loser was automobiles, with a staggering decrease of 27.8%. As for the service sector, hotels and restaurants took the hit, experiencing a significant drop of 18.1%. And let’s not forget about domestic consumption, which decreased by 6% month-on-month, all thanks to the pesky impact of the coronavirus.
2. Mobile Application Traffic During Corona Virus
Now, hold on tight as we delve into the world of home shopping, e-commerce, and food delivery apps. Buckle up, because they all experienced an exhilarating boost! But hey, not everything was sunshine and rainbows. Movies, overseas accommodations, and airline applications had the unfortunate fate of recording the largest drop in traffic. Talk about a rollercoaster ride of ups and downs!
3. E-Commerce Market During Corona Virus
Let’s talk cold, hard numbers. Brace yourself for this mind-blowing fact: e-commerce sales in South Korea skyrocketed to a whopping 7.8 billion USD in February 2020, marking a stunning 16.4% increase compared to the same period last year.
Now, let’s take a moment to appreciate the winners in this game. We’re talking about the champions of the e-commerce world: food delivery, mobile e-coupons (that’s what people go crazy for on KAKAO), computers, home appliances, and sports-leisure goods. While some businesses are panicking, these smart ones are capitalizing on the shifting tides of consumer behavior.
4. Employment Change by Industry
Now, let’s shift our attention to the labor market. In February 2020, the unemployment rate decided to take a plunge, decreasing by a cool 0.6% year-on-year, settling at a respectable 4.1%. Hold up, there’s more! Health services, transportation, and agriculture saw the largest growth in the number of employed people. However, the retail sector faced a decrease in employees. Believe it or not, the labor market managed to steer clear of the negative impacts of the dreaded coronavirus. Talk about resilience!
E-COMMERCE
5. Popular Purchase Channels
Let’s rewind to 2019, when South Korean consumers were on a shopping spree. Where were they splurging their hard-earned cash, you ask? Well, mostly in offline stores, mobile shopping stores, online shopping stores, and through TV home shopping. But here’s the twist: mobile shopping sites witnessed the largest surge in popularity in recent years. Looks like people are embracing the convenience of shopping at their fingertips!
6. E-Commerce Market Growth
Get ready for this jaw-dropping fact: in 2019, total online purchases skyrocketed by a whopping 18.3%, reaching a mind-boggling 134 trillion KRW. But here’s the kicker: mobile purchases stole the show, increasing by a staggering 25.5%, accounting for a mind-blowing 86 trillion KRW or a whopping 64% of total online purchases. Can you believe it? From transportation to travel, food and beverage to food delivery, electronics to cosmetics, online shopping was booming across the board. It was an online shopping extravaganza!
CONSUMER BEHAVIOR
7. Most Popular Mobile Apps
Let’s dive into the fascinating world of mobile apps in South Korea! Back in 2019, KaKao, YouTube, and Naver stole the show, clinching the top three spots as the most popular mobile apps. But hold on tight, because things have been heating up over the past three years. YouTube and Instagram have emerged as major players in the content-sharing game, captivating the hearts of South Koreans. Meanwhile, the likes of Coupang, Samsung-Pay, and Naver continue to dominate the thriving domestic e-commerce and digital payment markets. It’s a fierce battle for digital supremacy!
8. Korea Search Engine Market Shift
Brace yourself for a wild ride through Korea’s search engine market transformation! Between 2017 and 2020, a seismic shift took place. The once-dominant Naver saw its search share decrease relative to the mighty Google. In the first quarter of 2020, Google commanded a whopping 33% of all online searches in South Korea. It’s a battle of the search engine titans!
9. Channels to Find Information Before Making Purchase
Picture this: it’s 2019, and Korean consumers are on a quest to find the perfect product. Where do they turn to before making a purchase? Well, according to their collective wisdom, the most frequently visited channels were mobile shopping sites and online forums. But here’s the kicker, out of the 11 most common channels named by consumers, a whopping 7 were digital. It’s a digital shopping revolution, my friends!
ADVERTISING
10. Online Advertising Market Scale
Hold onto your seats, because we’re about to witness the astounding growth of the online advertising market. In 2019, it soared by a staggering 21%, reaching a mind-blowing 6.42 trillion USD. That’s right, online advertising claimed a whopping 43% of the total advertising spending in South Korea.
11. PC and Mobile Advertising Market Share
Get ready for a dramatic shift in the world of online advertising. In 2019, PC advertising accounted for a modest 33%, while mobile advertising stole the spotlight, commanding a staggering 67% of the total online advertising space.
TRADE
12. South Korea Export and Import Amount
Take a deep breath as we explore Korea’s import and export landscape. In 2019, the country faced a slight dip in exports, witnessing a 10.3% decrease, settling at 541 billion USD. On the other hand, imports also experienced a drop of 6.4%, totaling 495 billion USD. But here’s the kicker: Korea still heavily relies on its large exporters.
The top 10 exporters accounted for a staggering 34.6% of total exports, while the top 100 exporters claimed a whopping 63.9%. And if that’s not enough, the top 1,000 exporters accounted for a mind-boggling 82.6% of the total exported amount. It’s a tale of the giants!
13. Korea Exports by Category
Let’s shine a spotlight on the shining stars of Korea’s export market in 2019. Semiconductors, machinery, oil, and petrochemicals took center stage, leading the pack. And when it comes to the top regions for Korea’s exports, China, the US, the EU, and Japan stole the show. It’s a global export frenzy!
14. Largest Importers of Korean Cosmetics by Country
Hold onto your beauty brushes, because we’re about to delve into the world of Korean cosmetics. In 2018, China, Southeast Asia, and the US emerged as the top regions that simply couldn’t get enough of Korean cosmetics. Brace yourself for this jaw-dropping fact: over the past decade, exports of Korean cosmetics have skyrocketed by over ten times!
ECONOMY
15. Major Korea Economic Figures in 2020
Let’s talk about the impact of the Corona Virus pandemic on South Korea’s economy. Woori Bank took a hit, and the country’s economic growth forecast for 2020 dwindled from 2.2% to 1.8%. But wait, there’s more. If the economic shutdown extends until the third quarter of 2020, brace yourself for a potential shrinkage of Korea’s yearly economic growth to a mere 1.4%. It’s a tough battle, but Korea’s resilience will prevail!
16. No. of Employed People by Industry
Let’s take a glimpse into the heart of South Korea’s workforce in 2020. The majority of hardworking South Koreans found themselves employed in the manufacturing, retail, hotel, and restaurant industries. They’re the backbone of the nation, working tirelessly to keep the wheels of the economy turning.
17. Korea Household Assets and Debt
In 2019, the net debt of the average Korean household increased by a modest 3.2%, reaching a staggering 79.1 million KRW. It’s a balancing act of managing finances and aspirations in the fast-paced modern world.
INVESTMENT
18. New Venture Capital Investment Growth
In 2019, new venture capital investment soared to a mind-blowing 7.5 trillion KRW, boasting a jaw-dropping 27% year-on-year growth. And here’s the kicker: it accounted for a cool 0.6% of Korea’s GDP. But hold on tight, because due to the unforeseen impact of the COVID-19 pandemic, venture capital investments are expected to take a hit in 2020, only to bounce back stronger in 2021. It’s a rollercoaster of innovation and investment!
19. New Venture Capital Investment by Category
Picture this: it’s 2020, and the world of venture capital investment is undergoing a seismic shift. Brace yourself for the rise of Information Communication Technology (ICT) services, where the share of venture capital investment, particularly in AI technology, is expected to skyrocket.
20. Outward Foreign Direct Investment (FDI)
Let’s go into the realm of outward Foreign Direct Investment (FDI) by Korean companies. In 2019, these companies set their sights on global expansion, increasing their outward FDI by an impressive 21% to a staggering 61.8 billion USD. What fueled this surge? A significant increase in investments in the financial sector, boasting a jaw-dropping 45% year-on-year growth, and the real estate sector, with a solid 33% increase. The top destinations for these adventurous Korean investors? The United States, China, and Vietnam. It’s a global pursuit of growth and success!
OUR CONCLUSION
- South Korea is being impacted by COVID-19. However, negative impact has been minimum so far.
- Korean economy is experiencing structural changes. Commerce, content consumption, and payments are merging and are becoming increasingly digital.
- Korean consumers are slowly breaking out of the Korea digital bubble. Global online platforms like Google, YouTube, and Instagram are becoming dominant. It will help more global brands to be discovered by local consumers.
- Digital advertising is the way to go when marketing in Korea. Focus on mobile advertising, because mobile is where people buy.
- Korean exports are dominated by electronics and heavy industries. As for consumer goods — cosmetic are breaking export records in Asia Pacific.
- Economic growth has been slowing down during the past few years. However, the employment rate has been steadily increasing.
- There is a lot of capital circulating in South Korea. Venture capital investment is booming, with focus on ICT services. Korean investors are also moving billions of dollars overseas.
If you are considering to doing business in South Korea, feel free to reach AJ Marketing. We are happy to help everyone. Opening Korea to the world is part of our mission.
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