The Korean e-commerce market size has already surpassed 57 trillion won (approximately 44 billion USD) in 2001 and in the first quarter of 2002, the size of e-commerce transaction amounted to 39,198 billion won (30 million USD). The size of e-commerce transaction increased by 2,992 billion won(2.3 billion USD) over the previous quarter and by 14,935 billion won (12 billion USD) over the same quarter in year 2001. The B2B market where corporations purchase and sell products or services composed 89.8 % while B2G transaction was 7.1% and B2C transaction in which is private e-commerce such as internet shopping and auction was 2.8 % of transaction occurred on first quarter of 2002.(1)
The Total size of e-commerce transaction by e-commerce type
(Source: Korean National Statistics Office May 2001)
E-commerce Transaction in the First Quarter of 2002
(Source: Korean National Statistics Office September 2002)
1. Business to Business (B2B) Market
According to the 2001 third quarter e-commerce business statistical survey by National Statistical Office, the B2B market totaled 31,866 trillion won (24.5 trillion USD). B2B transaction showed its upward trend on a large scale. This trend was boosted by the widespread recognition among the large corporations that it is very necessary to construct e-business environment for effective process innovations and by the various active policies for e-commerce which the central government continuously promoted.
Most of transaction occurred in e-procurement(76.5%). Neutral exchange e-marketplace are used to supply raw materials for production.
Size of e-commerce
(Source: Korea National Statistical Office, May 2001)
The Amount of B2B e-commerce transaction by Dominated type
(Source: Korean National Statistics Office, September 2002)
By industrial classification, the largest transaction was recorded in manufacturing industry with 27,777 billion won (79.2%), followed by whole sales and retail trade industries with 5,092 won (14.5%) and by construction with 982 billion won (2.8%)
The Amount of B2B e-commerce transaction by industrial Classification
(Source: Korean National Statistics Office, September 2002)
Although the B2B market has yet to overcome its small-scale and lacks of specialty, the future of e-commerce between business units looks bright. In addition, B2B payment methods have recently appeared to replace bills commonly used in electronic transaction before and diverse payment methods such as credit card, wire transfer, e-currency and mobile payment are introduced.
2. Business to Consumer (B2C) Market
Total number of Internet shopping malls as of the end of 2001 was 2,166, 15% increases from 1,900 at the end of 2000. The B2C transaction in Internet shopping malls increased 23.8% in the fourth quarter of 2001 at 811.4 billion won (624 million USD) as compared to 655.6 billion one in the third quarter and total sales figure looks to surpass 2 trillion won(1.5 billion USD).
The increase in the number of online shopping malls is slowing down each quarter but the competition among the existing small, medium-sized online shopping malls is intense.
The number of Online shopping Malls and its transaction at February 2002
(Source: Korean National Statistics Office, February 2002)(3)
Total Revenue of Online Shopping Malls
Books (19.3%) are the most popular goods purchased online. Computer/hardware/Accessories and Home appliances are nest on the list. The notable point in purchase item, is that while the purchases of books and computer-related items decreases, the purchase of cosmetics and leisure products are significantly increasing. This figure can be seen as a result of the introduction of department store style shopping malls, increases of female Internet users and the expansion of consumers' interests which has positive influence in the balanced growth of Internet shopping mall.
Purchased Items at Online Shopping Mall
Diverse online payment methods have introduced but most transaction at online shopping mall used credit card (69.1%) followed by online transfer which involve involve online banking or payment through mobile phone.
Payment Methods for Online Shopping Mall
(Source: Statistics from Woorizine (4) Original figure is translated to English by author)
3. Business to Government (B2G) Market
B2G refers to transaction between the government and companies regarding government procurement, administration, and issuing of certificates. The maintenance, repair and operating (MRO) part of government procurement, along with tax payment, driver's license renewal service and payment tickets are the main services. Beginning from 2003, all procurements made by government agencies plan to be conducted online.
Total size of the b2G market has reached 447 billion won (344 million USD), consisting mostly of materials (47.3%) and equipments and machinery (31.8%)
B2G Transaction by Good and Services
(Source: National Statistical Office, December 2001)
4. Financing Service
4.1 Internet Banking (Online banking)
The number of Internet banking users surpassed 10 million at the end of 2001. The number of corporations using internet banking was 302,000 in September 2001, an increase of 128% from June of the same year. The majority of Korean banks offer internet banking services such as checking account and loans for corporation. Especially some banks are providing high-level of financing services such as B2B electronic payment, mail banking, and e-CRM. in addition, 18 out of 20 Korean banks are offering mobile banking services in accordance with wide popularization of mobile phone and PDA's. Internet banking related investment from domestic banks are escalating each year and this trend is predicted to continue for a while.(5)
Growth pattern of Internet Banking Service Subscribers
(Source: National Statistical Office, December 2001)
4.2 Online Stock Trading
The number of securities companies offering online transaction service has increased from 27 in 1999 to 38 as of November 2001. The % of online traders and transactions have continuously increased from 55.9% of total transaction in 2000 to 66.7% in 2001. In terms of transaction amount, online trading counts over 95% of the KOSDAQ market and approximately 75% of KSE.
Online Stock Trading Volume
(Note: 1$ = 1300 won)
(Source: National Statistical Office, December 2001)
(1) Korea National Statistics Office at www.nso.go.kr/eng
(2) 2002 Korea Internet White paper by Ministry of Information and Communication
at www.mic.go.kr/eng/jsp/main.jsp
(3) "The number of Online shopping Malls and its transaction at February 2002" from Korea National Statistical Office
Details are available at www.nso.go.kr/eng/releases/e_suec0202.htm
(4) Statistics reports from Woorizine (women's online resource and information)
at www.woorizine.or.kr/woorizine19/htm/statistics03.htm
(5) 2002 Korea Internet White paper by Ministry of Information and Communication
at www.mic.go.kr/eng/jsp/main.jsp
Other useful information :
- National Statistics Office at www.nso.go.kr/eng
:most recent and detailed statistics related to internet activities in Korea are available.
This site was developed for the class,
"Impact of National Information Technology Environments on Business"
at Kogod School of Business, American University, Washington DC
Created by Jung Im Won & Hyun Sang Park
Last updated : December 18, 2002