E-commerce urged to look abroad

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E-commerce urged to look abroad


As an increasing number of Korean consumers shop on overseas e-commerce sites, local retailers are fretting over the sprawling global online shopping network.

But the Korea Chamber of Commerce and Industry (KCCI), a trade group consisting of local businesses, has encouraged local merchants to cash in on the shopping trend by targeting online shoppers overseas.

In a report released yesterday, the KCCI suggested that Korean retailers use more diversified distribution channels to enhance their price competitiveness.

The study said delivery by shipping is about 60 percent cheaper than air mail but 99.5 percent of items purchased from Korean e-commerce sites from abroad are delivered via air mail.

“Goods such as clothes, fashion accessories and cosmetics can be delivered via air,” the report stated, “But it would be far more efficient if more home appliances and furniture can be shipped through cargo.”

The KCCI’s recommendation came as Koreans are increasingly buying goods like cosmetics, clothes, toiletries and electronics from abroad.

According to the Korea Customs Service, the total amount of direct purchases made on foreign websites jumped from $707.2 million in 2012 to $1.04 billion last year, surpassing the threshold of $1 billion for the first time. The number of items purchased was also up from 7.94 million to 11.16 million over the same period.

The report shed light on the robust e-commerce boom in China and Southeast Asia, calling for Korean companies to focus on those emerging markets.

“Local traders should respond to the growing demand for online shopping from countries like China and those in Southeast Asia,” the report noted, “Those countries especially are fond of K-pop culture, so Korean-made products are more appealing to them.”

China’s e-commerce growth was exceptionally high, dwarfing overseas purchases by Koreans.

The total amount of direct purchases made from foreign websites in China was worth $35.2 billion, about 35 times more than in Korea. The KCCI estimated that value would increase fourfold by 2018 to $120 billion.

“Thanks to the growing popularity of K-pop culture, Korean products are well received,” the study said. “Items like cosmetics and infants’ food especially enjoy popularity, and the sales grow at a brisk pace.”

The report also called on logistics businesses to brace for the expansion of Chinese competitors.

“Some large logistics businesses have expanded into other businesses that facilitate purchases made from overseas sites,” it said. “They build agencies that place orders on those foreign websites on behalf of Chinese consumers.”

The KCCI conducted a survey earlier this year to explain why people prefer shopping online.

The survey of 1,650 Korean Internet shoppers showed that one in four regularly buy foreign items directly from non-Korean websites. Of them, 67 percent said the price was the main reason, while 37.8 percent said they wanted to buy items from brands that cannot be found in Korea.



BY PARK EUN-JEE [ejpark@joongang.co.kr]

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