Boosting local online direct buying market
The trade surplus of 35 consecutive months is harboring an inconvenient truth. It is the imbalance of trade in the direct overseas buying from online stores. For many reasons, foreign shoppers don’t purchase from Korean sites, and direct purchases from Korean online stores are still limited. In the meantime, the gap between Koreans buying from foreign websites and foreigners buying from Korean sites is growing. Foreigners bought 30.3 billion won ($27.3 million) directly from Korean vendors, and the trade imbalance unfavorable to Korea is 1.6 trillion won.
Korean online stores have more complicated checkout procedures, asking excessive personal information. Korea and foreign shoppers say that Korean sites are inconvenient compared to global sites like Amazon, eBay and Alibaba, which only require a name, email address and password. Also, online stores need to understand the likings of consumers in different regions. Chinese shoppers tend to check the order and delivery status constantly on smartphone applications. Indonesia has relatively low credit card penetration rate, and Indonesians prefer paying with cash or mobile phone. French and German shoppers feel more comfortable using sites that offer product descriptions in their own languages rather than English. Other tasks include customs procedure, duty free categories, overseas delivery and shipping and businesses with trustworthy sites.
The government and related agencies need to work together and support the businesses. The online direct buying market cannot be spearheaded by small and medium businesses, and comprehensive and competitive response is necessary.
What’s more important is the awareness of Korean companies on online direct buying. They need to acknowledge that direct buying is a new and promising export means. Not many companies use the direct online buying by overseas consumers actively. Companies that export products suitable for direct online sales need to use the channel as a new opportunity.
by Yun Won-sok, Executive vice president for business information and trade at the Korea Trade Investment Promotion Agency