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Electronic Commerce Summary E-commerce market in Korea was worth USD 44.3 billion in 2000, which accounted for 4.5% of all transactions [1]. The transaction between B2B amounted to approximately USD 40.3 billion or 90.9% of e-commerce in Korea [1]. In particular, B2B (Business-To-Business) transaction in Korea increased in 2000, jumping from USD 7.7 billion in the first quarter to USD 40.3 billion in the last quarter [1]. Most of the transaction in Korea's B2B market are made directly between large corporations and their subcontractors, mainly through EDI. Currently, 72.1% of all B2B in Korea is focused on EDI. However, more companies are steadily turning to the internet for electronic commerce [1]. B2C sales have also seen on the increase as revenues more than doubled in 2000. Korea now has many Internet shopping sites that specialize in offering specific products, such as electronics, telecommunications equipment, and computers. In the near future, e-commerce transactions are expected to grow with the expansion of high speed Internet networks and the wireless Internet. In particular, the B2B market will become increasingly active as more firms participate in e-marketplace. Currently, Korean companies have invested a huge amount to build e-marketplaces. The B2C market is also expected to expand as consumers continue to purchase more through the Internet. In particular, credit card transactions are expected to increase as the reliability of Internet settlement systems improves. Size of E-Commerce Market in Korea
B2C Market The size of the domestic B2C market in 1999 was USD 190 million, which is almost four times larger than the previous year according to the Korea Chamber of Commerce & Industry (KCCI). And it indicated that the size of the B2C market in 2000 amounted to USD 877 million. In 2001, the B2C market is expected to grow to USD 1.4 billion. In terms of the size of each purchase, Computers/Accessories (35.5%) was the biggest category followed by Home Appliances/Electronics/Communications (14.5%), and Books (6.4%) [1]. However, in terms of the number of purchases, Books (42.2%) were the most popular category, followed by Computers/Accessories 28.4%), and Music/Videos/Instruments (27.2%) [1]. The Computer/Accessories category posted the highest share of sales in B2C transactions because the products are relatively more expensive than other categories. The Size of B2C Market
B2B Market According to a report by KISDI, the market size for domestic e-commerce sales in 2000 was USD 5.1 billion (including conventional EDI). 54 percent of the domestic e-commerce sales was driven by conventional EDI, while the remaining 46 percent, which totals USD 2.9 billion was made on the Internet. The amount of procurement via B2B e-commerce in 2000 (including conventional EDI) is about USD 3.6 billion. 14.3 percent of the B2B procurement was made via conventional EDI. 81.9 percent of the total B2B procurement was conducted over the Internet, which amounts to USD 2.6 billion. The Size of B2B Market
In Korea, Internet search portal sites such as Daum, Yahoo, Lycos, Netian, Naver, and portal sites based on communities are leading the market. Recently, on-line service companies, such as Chollian and Hitel, have changed their protocols into web-based ones in order to join the portal site market. In Korea, the leading web portal companies have 80 percent of the on-line advertisement market [1]. Yahoo! Korea relies on 90 percent of total sales on ad income and Daum Communication relies heavily on ad revenues which make up 65 percent of total sales [1]. Top 10 Portal Sites in Korea
Revenue Structure of Portal Sites
Internet Movie Most of the Internet movie companies in Korea purchase the movie rights and stream those movies on the Internet. There are about 30 companies in Korea that provide paid Internet movie services and the leading sites have sales of USD 38,000 to USD 69,000 per month [1]. Internet movies are now actively being screened and produced. Internet Music Since August 1999, Internet music service companies and record companies collaborated to provide MP3 files to consumers. These companies include the following: Lets Music, which is collaborated by the leading music company, DOREMI MEDIA and NANUM, Tube Music of Daeyoung AV and Medialab, m4you of World Music, Samsung Music, Samsung Electronics, other event companies and Imstation of Internet Music. However, the current song file download service is a small market with total monthly sales of less than USD 8,000. |
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