Amazon prepares to take on South Korean e-commerce
Amazon is preparing to expand competition in the Korean online retail market, as evidenced by a recent wave of advertisements for positions in its office in Seoul.
In the last week alone, the e-commerce giant advertised for 49 full-time positions and internships in Seoul, many within Global Selling, Marketing, and Business Development.
To date, Amazon’s business in South Korea has focused on cloud computing rather than online retail. AWS opened an office in Seoul in 2012 and began accumulating customers and formulating partnerships with a broad base of Korean companies, including Samsung, Nexon Gaming, and Mirae Investments.
Amazon added an AWS region in Seoul in January 2016, to provide local customers with low-latency access to AWS infrastructure services.
However, with the addition of employees in Global Selling and Marketing, it appears that Amazon is ready to expand its retail e-commerce footprint in the region as well.
South Korea represents one of the biggest e-commerce markets worldwide, with an existing market of $19.12 billion in 2016 expected to grow to over $32 billion by 2021. This represents the highest e-commerce penetration in the APAC market, with 72% active online shopping reach.
South Korea’s online shopping reach was second only to the UK in a recent survey, roughly similar to that of Germany. However, South Korea is expected to surpass both the UK and Germany in online sales over the course of the next two years.
The current market leader is 11Street, a subsidiary of SK Telecom, followed closely by newcomer Coupang.com. However, Amazon is expected to have a disruptive effect on the South Korean market in part due to its global reach. Through Amazon, sellers whose current efforts are focused on the South Korean market will be able to access a global customer base for their products.
The most popular online shopping categories in South Korea are online travel and reservation services, home electronics and appliances, and fashion and apparel. Amazon recently made major gains in online sales of home appliances and is on track to become the leading US online retailer of consumer apparel.