South Korea's online shopping sector experienced its slowest growth on record in August due to payment delays and unfavorable weather conditions, according to data released by the Statistics Korea.
Online shopping transactions increased by only 1.9% year-on-year, reaching 19.56 trillion Korean won (approximately $148.1 billion). This marks the smallest year-on-year increase since the agency started compiling the data in January 2017.
Even though overall growth was slow, specific sectors saw significant increases. Online food and beverage purchases rose by 15.5% to 3.32 trillion Korean won. The food delivery sector also hit a record high, growing by 15.4% to 2.74 trillion Korean won. Ahead of the Chuseok holiday, sales of agricultural and marine products surged by 13.4%. Daily necessities sold via online platforms grew by 9.7%, reaching 2.72 trillion Korean won.
Conversely, online shopping for electronic coupon services saw a drastic decline, falling by 48.6% year-on-year to 426.2 billion Korean won. This drop is attributed to payment delays by TMON and WeMakePrice, both owned by Singapore-based Qoo10. These platforms faced liquidity issues due to aggressive merger activities by their owner, resulting in an inability to pay suppliers and refund customers. Consequently, both platforms filed for court management in July. The South Korean government estimates the payment arrears to be around 1.28 trillion Korean won, affecting over 48,000 businesses.
Sales via mobile devices, such as smartphones and tablets, increased by 5.4% year-on-year to 14.98 trillion Korean won. Mobile shopping accounted for 76.6% of the total online sales, up 2.5 percentage points from the previous year.
