Shopping on foreign sites sees first dip year on year

For the first time in a decade, cross-border e-commerce transactions in Korea saw a decrease in 2015, as a strong dollar and local sales events made overseas online purchases less attractive.

Korean consumers last year spent a total of $1.52 billion on foreign shopping sites, a 1.4 percent decline from 2014, according to the Korea Customs Service on Wednesday.

The latest figure marks the first downturn since records were kept in 2006. Until last year, aggregate transactions had been growing by an average 54.5 percent since 2011 and the number of orders rose by 44.8 percent on average.

The customs agency pointed to the strong dollar last year as the reason behind lower demand for imported products, since the higher won-dollar exchange rate pushes up the prices of imported goods. In cross-border e-commerce, the United States is the largest exporting country to Korea, with 73 percent of products coming from the country last year.

The average transaction size per order was $96 in 2015, a 1 percent decrease from 2014’s $97.

Another factor in the tepid growth was the large number of sales events held by local retailers, some of which were backed by the government.

Major retailers joined a nationwide discount event called Korea Black Friday last October, an initiative pushed by the government to spur consumption. A total of 27,000 department stores, discount supermarkets, convenience stores and online malls offered discounts of up to 80 percent, which might have lured consumers away from online shopping.

The customs service also released demographic data on the buying habits of Korean online consumers.

In terms of the number of transactions, the most avid shoppers were women in their 30s and 40s. The age group consists largely of married women, who have every reason to prefer shopping online. They tend to be sensitive to prices and buy a large number of items.

But when it comes to the size of transactions, men in their 50s topped the list, with average-spending per order at $142, followed by men in their 40s who spent an average $133.

The data also showed that the most popular items bought on foreign websites were apparel and health food, which accounted for 16 percent each. Other food items made up 14 percent, and cosmetics were the next highest at 11 percent.

The customs agency noted that orders of clothing and shoes drastically decreased.

“In 2014, apparel, shoes and bags accounted for 40 percent of purchased goods, representing 6,265 orders,” the Korea Customs Service said in the report. “But the proportion decreased to 23.9 percent, or 4,766 orders.”

It noted the inconvenience of returning and exchanging apparel of the wrong size to overseas companies as the reason for the declining popularity.

In the past decade, the increase in cross-border online shopping has prompted the creation of different agencies to facilitate orders. Many local logistics companies and agencies manage purchases by setting up addresses abroad and then forwarding items from those addresses to consumers in Korea.

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