1. South Korea E-commerce Logistics Market is expected to grow by 2026F driven by increasing internet penetration and improved logistics services among the players.
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South Korea has an internet penetration rate of 92.2% in 2021, with 47.3 Mn users. The government has made other preferential policies such as a preferential charge for the use of public facilities by logistics enterprises. The young population in South Korea is spending on an average 5H 29M every day using the Internet, resulting in a higher number of orders. Also, the advent of players offering last-mile delivery options has allowed retailers to improve e-com logistics to support growth and scale.
2. Initiatives by the Government of South Korea to strengthen the market also provide protection to consumers against e-commerce logistics frauds.
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- Korean government encourages cross-border e-commerce by simplifying and expediting customs procedures which allow Korean consumers to benefit from low-priced goods from overseas.
- The government announced the ‘National Logistics Basic Plan (2021-2030)’ on July 1, 2021, as a new blueprint for the development of the logistics industry in the coming decade in a rapidly and drastically changing logistics environment in the post-COVID-19 era.
- In 2002, the e-commerce consumer protection act was enacted to protect the rights and interests of consumers by prescribing matters relating to the fair trade of goods or services by means of e-commerce transactions.
- E-commerce Mediation Committee was established for solving disputes from e-commerce between consumers and e-commerce providers, and between e-commerce partners including payments, delivery and services provided by telecom companies.
3. Rapid aging population and fraudulent purchases are some of the challenges for the E-commerce Logistics sector in South Korea.
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- Rapidly ageing population (median age 42.6) & extremely low fertility rate (0.96) – hence lack of qualified workforce in the warehouse space.
- The pollution added by the transport vehicles due to increased vehicular traffic on the roads is a challenge for logistics companies.
- Fraudulent purchases or cash-on-delivery transactions increase online retailers’ concerns because customers may reject their purchases, resulting in revenue loss for the companies.