Korean Internet Marketing
Being the world’s largest per capita broadband market and the world’s second biggest credit card usage base, Korea’s e-commerce industry is growing like never before. This offers exciting new opportunities for offshore internet retailers, who offer secure online transactions and a wider array of goods at minimal costs and quicker delivery times. The Korean language requires particular attention to fluent Korean website translations.
Number of Korean internet users (2006 latest): 33.9 million
Korean broadband users (2005 latest): 11.9 million
Korean broadband access (2005 latest): 248 (per 1000)
Korean mobile phone users (latest data 2005): 38.34 million
Most popular local Korean search engine: http://www.naver.com
Korean credit card penetration (2006 latest): 68%
Korean B2C e-commerce expenditure (2006): US $ 14.29 billion
A high-tech modern world economy, Korea’s economic success has been achieved through a system of close government and business ties, which included directed credit, import restrictions, sponsorship of specific industries, and a strong labor effort. Korea’s
GDP at current prices for 2006 stood at US $ 877.2 billion, having increased by 11.4% over 2005 Korea estimates, according to the IMF’s World Economic Outlook Database dated September 2006.
Nielsen Net Ratings has estimated the total number of Korean internet users in 2006 at 33.9 million, comprising a majority 67% of the Korean population, having increased by 78% over 2000 figures for the same. The World Bank-ICT database has also estimated Korea’s per capita internet usage at 656 (per 1000) in 2004, having increased significantly from 405(per 1000) in 2000.
* Source: KRNIC (Korea Network Information Centre), 2005 data
** Source: C.I.Almanac, 2006 data
Korea’s broadband penetration per capita is presently the world’s highest at 248 (per 1000), as per April 2005 Point-Topic research estimates, which also put Korea’s total number of broadband lines at 11.9 million for the same year. Korean broadband access is also increasing very rapidly, having growing by a whopping 201% in the 2000-2004 period, from a mere 82.3(per 1000) in 2000, according to the World Bank-ICT database.
The World Bank-ICT database has also estimated that Korea’s per capita personal computer usage reached 558(per 1,000) in 2004, having grown by 41% over 2000 Korea estimates. Similarly, Korea’s mainline and mobile phone usage also stood at 467 and 760(per 1000) respectively in 2004. It is estimated the total number of Korean telephone mainline users and mobile phone subscribers at 23.75 million and 38.34 million respectively, as per 2005 estimates.
The most popular Korean search engines and websites currently are http://www.naver.com, http://www.daum.net, http://common.paran.com, http://www.empas.com, http://kr.altavista.com, http://www.lycos.co.kr, http://www.google.co.kr and http://kr.yahoo.com.
Nielsen Media Research’s December 2006 report states Korea as having the second highest credit card ownership rate in the world at 68%, second only to Britain with 70%. In 2005, Koreans spent US $181.2 billion using credit cards, thereby becoming the most active users of plastic for payment in the Asia-Pacific region. This high rate of Korean credit card usage is on account of relaxed ownership criteria and the Korean government’s strong encouragement for using cards as a payment method. Credit cards were introduced in Korea in the early 1980s, and since then, their use has expanded substantially. By March 2006, over 83 million cards were in circulation in Korea, according to the Credit Finance Association.
According to a latest 2006 government report compiled by the National Statistical Office (NSO), Korea’s B2C retail e-commerce sales stood at US $ 14.29 billion in 2006, having grown by 26% over 2005 estimates. Increased spending on children's goods, fashion and sports-related items had led to this growth. Korea’s forecast B2C online sales are also expected to grow by more than 20% a year, to reach US $ 20 billion by 2010. NSO estimates for 2002 had earlier put Korea’s total volume of e-commerce transactions at US $ 149 billion, out of which B2B transactions contributed 87.6%. General Korean e-retailers (selling a wide selection of products) are increasingly taking away market share from the smaller specialty e-retailers, who are also expanding their product offerings in their bid to compete effectively.
Thus, higher broadband and credit card penetration rates are acting as powerful growth catalysts for future offshore internet retailing opportunities in a lucrative Korean e-commerce market experiencing impressive double digit growth rates, with big global e-retailers like Amazon, Yahoo and Lycos having already made their presence felt. A vast majority of Koreans are now purchasing online, with e-retailers assuring secure and hassle free transactions, specially discounted prices, and faster turnaround times.
Reference Sources/Further Readings:
1. IMF World Economic Outlook Database, September 2006
2. The World Bank Group - ICT Database
3. KRNIC (Korea Network Information Centre)
4. http://www.cia.gov - The World Factbook
6. Point-Topic, April 2005 (http://www.point-topic.com)
8. Nielsen Net Ratings
9. Nielsen Media Research, December 2006
10. National Statistical Office (NSO)
11. Credit Finance Association