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Coupang, Naver dominate Korea's e-commerce marketBy Lee Yoon-seo
Published : June 20, 2023 - 16:09
South Korea's no. 1 e-commerce operator, Coupang, and its local archrival, Naver Shopping, are dominating the South Korean e-commerce industry, taking up some 65 percent of the local market, according to a survey Tuesday.
According to the consumer data analysis platform Opensurvey's research on 2,500 respondents aged between 20 to 59, Coupang was the most frequently used e-commerce service for Koreans, making up for 37.7 percent of responses.
Naver Shopping came in second, with 27.2 percent responses. The combined percentages of the two e-commerce services reach a total of 64.9 percent.
Shinsegae Group's online retailer, Gmarket, came in far behind with 6.8 percent of responses, followed by online shopping mall 11th Street at 5.5 percent.
According to the survey, Coupang also had the highest average weekly purchase rate of 1.5. Korean retail giant Shinsegae Group's online retailer Gmarket came in second with 1.12, with Naver Shopping and online market operator 11th Street each standing at 1.01, respectively.
The survey further showed that Coupang users logged the largest weekly expenditure, with 49,500 won ($38.6) per person. Gmarket came in second with 47,700 won, followed by 11th Street (46,500 won) and Naver Shopping (44,000 won).
Respondents cited its ultrafast delivery, low prices and simple exchange and refund policies as reasons for choosing Coupang as their most used e-commerce service.
Meanwhile, Naver Shopping users cited the user-friendliness of its application and web services along with various membership benefits as reasons for using the service.
For e-commerce platforms' paid-membership services, Coupang also took the lead, according to the survey -- respondents gave Coupang the highest valuation score of 4.08, while Naver Plus membership followed with a score of 4.05. Smile Club, a paid-membership service for Gmarket, came in third with a score of 3.8.
Respondents picked Coupang's Rocket Wow's delivery speed and payment benefits as their prime reasons for using the service. Reasons for picking Naver Plus membership included a large vendor network and an option to share an account between family members and acquaintances.
Meanwhile, high monthly fees and a lack of exclusive benefits had been picked as negative factors for both paid membership services.
Coupang and Naver have long been ramping up efforts to take the lead in the saturated e-commerce market.
Coupang recently launched "Rocket Growth," a one-stop service for storage, packaging and delivery for Coupang's vendors, in a bid to further boost its greatest strength, which centers around its distribution capabilities.
Naver, in a bid to ramp up its relatively lacking logistics edge, inked a 300 billion won share-swap deal last year with the nation’s No. 1 logistics company, CJ Logistics. The move came as the shopping firm aimed to establish a nation-wide delivery network.
"Until last year, e-commerce markets have been benefiting from the change in consumption trends towards a preference for online shopping," said an official from a local e-commerce company.
"Recently, with the pandemic drawing to an end, the demand for online shopping is decreasing. Efforts to launch creative, effective services which lead to direct profits must be made (by e-commerce companies)," he added.
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