China surpasses the U.S. in Korea’s direct purchase market

Last year, the amount of online overseas direct purchases increased by more than 25 percent compared to a year earlier. With Chinese e-commerce companies making inroads into the Korean market, the amount of direct purchases from China more than doubled during the same period, surpassing that from the United States for the first time since Statistics Korea first began compiling the data. Domestic online shopping transactions increased year-on-year due to an increase in travel-related product transactions.

According to the data on annual online shopping trends released by Statistics Korea on February 1, online overseas direct purchases last year amounted to 6.76 trillion won, up 26.9 percent from a year ago.

This is the second-highest increase since 2014, when Statistics Korea began compiling the related data. Online direct purchases have shown double-digit growth every year except for the following year (3.3 percent). In 2022 (4.1 percent), the growth rate was unusually reduced due to the high exchange rate crisis in the second half of the year, but it increased again last year as the exchange rate crisis was partially resolved and the base effect of the previous year overlapped.

While the exchange rate stabilized to some extent, a significant increase in direct purchases from China was driven by the success of Chinese companies in the domestic e-commerce market. As Chinese e-commerce platforms, such as Ali Express and Temu rapidly expanded their presence in Korea, the amount of direct purchases from China (3.29 trillion won) grew 121.2 percent over the year, surpassing those from the United States (1.86 trillion won) for the first time since the data was compiled. Although the exchange rate surge has subsided to some extent, the impact of the strong dollar continued last year, with direct purchases from the U.S. down 7.3 percent year-on-year. The decline was wider than a year earlier (-3.2 percent).

Last year, direct purchases from Japan (11 percent) also showed double-digit growth, but the growth rate slowed from the previous year (29.8 percent). This is interpreted to be due to the fact that more people traveled to Japan last year as a result of the weak yen, and conversely, the demand for direct purchases decreased. An official from National Statistics said, "The weak yen has reduced the incentive to purchase online as many tourists go to Japan."

Apparel and fashion-related products accounted for the largest share (45.7 percent) and growth rate (43.5 percent) of online overseas direct purchases. In terms of growth, household and automotive goods (35.9 percent) and sports and leisure goods (65.5 percent) stood out.

The total amount of online shopping transactions last year was 227.35 trillion won, up 8.3 percent year-on-year. By product category, the growth rate of travel and transportation services (44 percent) was overwhelming, which is attributed to the increased demand for overseas travel, such as Japan and Southeast Asian countries.

In addition, e-coupon services (34.9 percent), culture and leisure services (19.8 percent), and pet products (11.4 percent) also recorded high growth rates in online transactions.

※This article has undergone review by a professional translator after being translated by an AI translation tool.