Why do Chinese platforms dominate Korean live streaming e-commerce?

"The rise of Korean e-commerce on Chinese platforms: analysis of the new situation of cross-border competition." Why has the Korean market become a new focus in the Asian e-commerce landscape? What has enabled Chinese platforms to emerge in the field of live e-commerce in Korea? What challenges and opportunities does their development face?

Cross-border e-commerce is facing unprecedented challenges in North America, while the Korean market in Asia is welcoming a new opportunity. Since last year, "going to China after get off work on Friday" has become a trend in South Korea. Not only has China Travel become a new trend among young Koreans, but the "live streaming e-commerce" business model originated in China is also becoming increasingly popular in South Korea and creating a frenzy. Kookmin Ilbo, one of the most influential comprehensive news media in South Korea, published an article a few days ago saying that the increase in the frequency of Korean consumers using Chinese e-commerce platforms has driven the growth of South Korea's overseas direct purchase market. South Korean experts also said: "The shopping model and price advantages of Chinese e-commerce platforms are increasingly favored by Korean consumers, and China's advantages in the overseas direct purchase market will expand." On February 10, Temu, a subsidiary of the Chinese e-commerce platform Pinduoduo, is actively preparing to enter the Korean market directly. Since the end of last year, Temu has begun recruiting employees in South Korea for core departments such as human resources, general affairs, marketing and logistics, and plans to establish a comprehensive logistics system to support its business expansion in South Korea. Earlier, in December 2024, Temu's new downloads in South Korea reached 1.177 million times, making it the top of the download list. AliExpress and Douyin Overseas Speed ​​Version are also on the list. In terms of local platforms, NAVER, Coupang and Kakao have become the main e-commerce platforms. NAVER Shopping Live has developed rapidly, with more than 100 million live broadcasts and more than one million buyers in the first half of the year; Coupang Live's product categories have been continuously expanded, with sales increasing by more than 60% year-on-year in 2022; Kakao has attracted many young consumers with the help of social platform resources. At the same time, global giant YouTube also announced at the end of last year that it would further expand its live e-commerce business in South Korea. A smokeless e-commerce war is quietly unfolding on this land.

01 Korean e-commerce enters the era of universal live streaming

Today, South Korea has entered the era of live streaming for all. In terms of market size, the size of South Korea's live streaming e-commerce market has reached 2.5 trillion won (about 1.9 billion US dollars) in 2024, and the scale will increase 15 times in two years from 2022 to 2024. It is expected to expand to 3 trillion won (about 2.3 billion US dollars) in 2025, showing a rapid development trend. In terms of live streaming content, it covers multiple fields such as entertainment, food, e-sports, and life sharing. For example, AfreecaTV's "eating broadcast" content is very popular, and many anchors make a living from it. The application has long been ranked in the top ten downloads in South Korea. In the field of e-sports, game live streaming similar to Twitch.tv is also very popular in South Korea. Platforms such as Nexon broadcast international e-sports leagues, such as the FIFA Online 3 Championship, KartRider and Counter-Strike, and the audience can interact and communicate in the live broadcast. Seo Ji-soo, a former member of the Korean girl group Lovelyz, announced her transformation into an anchor in a high-profile manner. Korean actress Choo Ja-hyun, who is well-known in China, also returned to China to start her own live streaming career. Even Korean gang members have joined the live streaming industry, sharing their experiences in the underworld, prison life and other content on Youtube. Their unique identities have attracted a large number of clicks. The number of views of related videos uploaded by the "second in command" of the Incheon gang has exceeded 1 million, which shows the wide audience and great influence of live streaming.

South Korean "Gangster Boss" video on YouTube

As of 2022, the acceptance of live streaming in South Korea has exceeded 70%. The extremely high acceptance of live streaming has also laid the foundation for the development of live streaming with goods. In terms of platforms, NAVER, Coupang and Kakao have certain competitive advantages. As the largest search engine in South Korea, NAVER launched the "NAVER Shopping Live" platform for NAVER Shopping sellers as early as March 2020, and officially established "Shopping Live" in July of that year. The live streaming views exceeded 100 million times in half a year, and the number of buyers exceeded one million. Coupang started trial operation of the "Coupang Live" on-site business service in January 2021. The service is currently mainly for beauty products such as cosmetics, but plans to gradually expand to more categories, including home appliances, health functional foods and industrial products. At the end of 2021, Kakao, one of the most popular chat software in South Korea, announced an investment of 180 billion won in the live e-commerce platform Grip and acquired a 50% stake in it. Before the acquisition, more than 200 live broadcasts were held on Grip every day, and Shinsegae Duty Free Shop, AK Department Store and GS25 Convenience Store were all Grip's partners. Traditional retail companies are not far behind, and home shopping companies such as CJ of Shopping (CJ's business unit focusing on home shopping), Lotte Home Shopping (a shopping platform under South Korea's Lotte Group) and GS Shop (South Korea's No. 1 TV shopping website in terms of market share) have opened live sales channels. According to Statista data, the penetration rate of live e-commerce in South Korea is expected to reach 53.2% in 2024, and will further climb to 63.7% in the next five years.

Image source: HORIZON

Overall, the main driving factors for Korean consumers to choose live shopping include: price advantage, convenient shopping method, possibility of product comparison, wide range of products, 24-hour accessibility, non-disruptive shopping experience, more product information, etc. These factors have jointly promoted Korean consumers' preference for online shopping, reflecting their high attention to value, convenience and information transparency. To this day, the "three highs" (high prices, high interest rates, and high exchange rates) in the Korean market remain severe, and as the pressure of living costs continues to rise, consumer concepts are also changing. In the past, young Koreans adopted the "YOLO" (You Only Live Once) attitude towards life, believing that life is only once, enjoy it in time, and buy it whenever you want. Now it has gradually become "you only need one", which means that only a certain number of daily necessities are prioritized. On the other hand, in recent years, young Korean consumers are also more inclined to express "self-pleasure". Before placing an order for clothing, beauty, daily necessities, etc., they mainly consider whether it is suitable for themselves, rather than pursuing celebrity brands and luxury high-end. Live streaming shortens the circulation link and greatly reduces the terminal price of products. Coupled with the intuitive and traceable characteristics, many young Koreans can't stop.

02 Chinese platforms account for half of the market

The huge potential of South Korea's live e-commerce market has also attracted many Chinese companies to make layouts. Today, Chinese platforms have occupied half of South Korea. According to data released by IGA Works, a South Korean data service provider, as of November last year, Temu's cumulative new downloads reached 18.04 million times, making it the application with the highest new downloads among adults in South Korea in 2024. TikTok Overseas Express and AliExpress ranked second and fifth with 10.22 million and 6.58 million downloads respectively. Among the top five in the market, three are Chinese platforms.

This phenomenon not only shows that the penetration of Chinese cross-border e-commerce in the Korean consumer market is continuing to increase, but also highlights the profound appeal of China's digital content ecosystem to international users. In terms of monthly active users (MAU), Chinese cross-border e-commerce platforms also performed well. In November, AliExpress's MAU reached 9.67 million, ranking second among Korean e-commerce platforms. Although there is a gap with Coupang (32.19 million), which ranks first, AliExpress's monthly growth rate of 6.9% far exceeds Coupang's 0.5%, showing greater growth potential. Temu's MAU reached 7.33 million, ranking fourth, and the number of users increased by 540,000 in one month, with a growth rate of 7.9%. Its number of users is gradually approaching the third-ranked 11Street (8.89 million), and has surpassed Korean local e-commerce platforms such as Gmarket (5.62 million), GS Shop (3.62 million) and CJ OnStyle (2.83 million). This high growth rate is due to the unremitting efforts of several major platforms to promote themselves. In April last year, AliExpress invited Tang Wei, a Chinese actress with great influence in South Korea, to be its spokesperson. Together with the famous Korean star Ma Dongseok, who had been invited before, the double-star endorsement model of "national goddess" + "iron-blooded tough guy" has greatly increased the popularity of AliExpress. In addition, AliExpress has also opened a customer service center in Seoul to quickly respond to the needs of Korean consumers.

The rise of Temu is closely related to its highly competitive pricing strategy. In the Korean market, Temu's products not only cover various fields from household goods to electronic products, clothing accessories, etc., but also have obvious advantages in prices compared with other platforms, making it the first choice for many Korean consumers. At the same time, Temu also uses social media platforms (such as Instagram, YouTube) and KOLs to cooperate to increase brand exposure and consumer purchasing desire. Douyin Overseas Express allows users to earn points by completing various tasks on the platform, including watching videos, liking content, following creators, or inviting friends to join. The points can be exchanged for small gift cards or digital tips to the creators. The setting of "doing tasks to get gifts" has quickly accumulated popularity for Douyin Overseas Express. At the same time, the spread of short videos has also become the main way to "plant grass". According to data, more than 60% of young Korean consumers get shopping inspiration through short videos. Overall, thanks to the increased influence of the above-mentioned cross-border e-commerce platforms, the number of orders for Korean consumers' "overseas shopping" continues to rise. The latest data released by the National Statistical Office of Korea shows that the amount of overseas direct purchases in Korea in 2024 will increase by 19.1% compared with 2023. Among them, the amount of overseas purchases from China will increase by 48% year-on-year to 4.78 trillion won, accounting for 60% of the total overseas purchases; the amount of overseas purchases from the United States will decrease by 8.9% to 1.69 trillion won. Some Korean experts said that the share of Chinese e-commerce companies in Korea's overseas direct purchase market may further increase.

03What is the Korean e-commerce competition

South Korea, the world's fourth largest e-commerce market, has a scale of 160 billion US dollars, which is comparable to the entire Southeast Asia. Moreover, Southeast Asia is a decentralized market with multiple countries, multiple islands and multiple languages, while South Korea is a centralized market with a unified language. It has 40 million e-commerce users and a per capita GDP of 33,000 US dollars. This "e-commerce kingdom" close to Chinese merchants still has many opportunities to be explored. Separately, Korean local e-commerce platforms have their own characteristics. Gmarket is one of the largest comprehensive shopping websites in South Korea. 11 Street has a place in the market with its significant price competitiveness. Coupang's "instant delivery" service is unique. As mentioned above, NAVER Shopping Live and Kakao both have relatively stable traffic entrances and mature service models. Coupang Live has a say in the beauty and beauty segments. As the "low price" strategy was brought into South Korea, various local e-commerce companies have also begun to exert their strength. During the shopping peak season in November last year, Gmarket and 11 Street used their company's strength to improve the price competitiveness of goods and launched an offensive and defensive battle with Chinese platforms. Gmarket has made major changes to its annual Big Smile Day event held from November 1 to 10, aiming to provide the lowest price on the entire network, and has specially selected sellers with strong price competitiveness to participate in the event. 11Street has launched ultra-low-cost products priced below 10,000 won (about 7.31 US dollars), and has implemented stricter price monitoring to ensure that sellers do not arbitrarily raise the event price (the average price of the three weeks before and after the event).

A cross-border seller concluded that Korean consumers care more about "quality-price ratio" than Chinese consumers. It is difficult to get long-term orders with crude and low prices, but fortunately, the quality of most Chinese products is good. Now more competition points have transitioned to logistics and after-sales levels. Providing good product consultation, after-sales, and returns and exchanges have become the key to brand success. Indeed, logistics timeliness has become one of the important decision-making factors for Korean consumers to shop online. According to a Korean consumer survey by Statista, 24.7% of people regard fast and convenient delivery as an important consideration when shopping online, which is second only to the price advantage of goods (44.5%) and the convenience of overall shopping (33.1%). But the problem is that the Korean logistics and express delivery industry is relatively fragmented. Domestic and foreign players include Hyundai Glovis, CJ logistics, LX Pantos, etc. The market share of the top five is only about 41%. The fragmented structure and fierce competition often make sellers worry about the choice of logistics partners. Fortunately, South Korea is close to China, and many merchants send goods from China in the form of full trusteeship, semi-trusteeship or self-delivery. "At present, AliExpress's delivery in South Korea basically achieves 5 days, and some express delivery can be achieved in 3 days; Temu's delivery time in South Korea is also about 5 days; TikTok Shop has implemented a 72-hour logistics time efficiency assessment since December 2024, which further increases the requirements for merchants." The above cross-border seller revealed. If Chinese merchants enter the Korean e-commerce platform, an obvious feeling is that various preferential policies are more inclined to local sellers. Therefore, the seller also suggested that the business strategy can be tilted towards domestic delivery in South Korea rather than direct purchase from overseas. On the other hand, the development of the Korean e-commerce market also faces certain risks. In May 2024, the South Korean government implemented the KC certification policy for high-risk products such as baby carriages and toys. Although it was revoked due to consumer opposition, the government stated that it would conduct strict risk inspections on these 80 products. In addition, the Korean antitrust agency has also issued new regulations requiring overseas e-commerce platforms to designate authorized agents to strengthen consumer rights protection and dispute resolution mechanisms. In summary, the rise of the Korean live broadcast e-commerce market has not only brought new development opportunities for Korean local companies, but also provided a broad market space for cross-border e-commerce companies. With the advancement of technology and changes in consumer demand, South Korea's live streaming e-commerce market will continue to maintain a rapid growth trend and become another hot spot for Chinese merchants to make money.

Author | Tang Fei Editor | Li Xiaotian