Your Guide to Growing Cross-Border Sales, Increasing Cart Conversions and Successfully Navigating the South Korea Payment System
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With over 80% of its population using the internet,1 South Korea is the third-largest retail ecommerce market in APAC following China and Japan. South Korean consumers favor ewallets for online purchases, and when they do pay by card, they prefer locally issued cards like Shinhan and KB, meaning it can be tricky for businesses to make inroads into the local market without support. Merchants must offer localized South Korea payment methods to customers, as well as understanding South Korea ecommerce trends and preferences.
South Korea eCommerce Trends
As a population with such a high percentage of internet users1 and high average ecommerce spend, South Korea is an important market for businesses looking at growing their international revenues. And despite a high base, the country also continues to deliver consistently high growth rates (projected at 9% year-after-year.2)
Here are a few factors that put South Korea on top of merchants’ lists for international expansion.
Consumers Spend Money Internationally
With 50% of South Koreans who shop online making cross-border purchases,3 the country should definitely be considered as a valuable revenue stream. That means making sure offerings appeal to South Korean culture and addressing the practical side of cross-border trading, such as using an appropriate South Korea payment gateway.
Mobile eCommerce is Flourishing
Mobile transactions dominate ecommerce sales in South Korea, with shoppers spending about the same amount of time shopping on their mobile devices as they do in physical stores.4 Therefore, merchants must ensure ecommerce websites are fully optimized for mobile, including accepting the most popular South Korean mobile payments, such as KakaoPay and Samsung Pay.
South Korean Retailers Charge Higher Prices
Consumers can generally get goods cheaper from foreign retailers, with 24.3% of respondents to a Korean Chamber of Commerce survey confirming they have bought from overseas websites or buying agencies, with their main reason being ‘lower prices’.1
Simple Payments Are Becoming South Korea’s Preferred Way to Pay
‘Simple Payments’ is a term used by Koreans for payments enabled via ewallets and mobile devices, examples include Samsung Pay, KakaoPay, Toss, and Payco. Thanks to a faster and easier checkout experience and support from the government and tech companies, Simple Payments are quickly gaining in popularity and may soon eclipse payments made with credit cards. When given a choice the majority of South Korean consumers prefer simple payments to cards, so accepting these is critical for appealing to South Korean shoppers and improving conversion rates.
Which Payment Methods Do South Koreans Prefer?
Top Product Categories for Online Purchases in South Korea
- Fashion is the most frequently purchased online category in South Korea, with groceries, health/beauty, restaurants and media following close behind
- Online grocery shopping for food is more popular than food delivery from local restaurants
Which Payment Methods Do South Koreans Use Most?
While simple payments are the most preferred, the list of top payment types used is almost equally split between local card brands, Simple Payments, bank transfers, and carrier billing. This fragmentation makes it difficult to identify one payment category that will drive the most success. Which is why merchants need a cards+ payments strategy that includes Simple Payments, and other locally preferred methods.
Local Payment Methods are Key to South Korea Success
Data shows that South Korea will continue to represent a strong growth opportunity for ecommerce businesses that are looking at international expansion. By allowing South Korean consumers to pay with their favorite methods – Simple Payments and locally issued cards – merchants can drive substantial results and generate a strong line of revenue. However, identifying South Korea payment providers that can offer all these methods is essential.
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