Insights

As Korea's e-commerce market enters maturity, the moment has come to build new growth foundations beyond simple transaction-volume expansion.

Samjong KPMG Economic Research Institute's report analyzes the status of Korea's e-commerce market and seven major business trends and issues. In 2024, Korea's online retail transactions reached KRW 259.4319 trillion (+7.1% YoY), and online penetration of total retail hit an all-time high of 50.4%. However, due to the July 2024 “TMON-WeMakePrice incident” and continued domestic-demand weakness, online retail growth contracted into single digits.

Seven business trends. ① E-commerce's new alliances — from bleeding competition to alliance: cooperation across platforms is expanding. ② Cross-Border E-Commerce (CBEC) as a forward operating base: Chinese commerce platforms (Ali, Temu) pursue aggressive local strategies in Korea while Korean platforms accelerate overseas expansion. ③ Revenue diversification to secure growth engines: advertising, logistics, and financial-services monetization emerge as new axes for e-commerce platforms. ④ Service innovation and differentiation through AI: hyper-personalized recommendations, AI-driven search, and price optimization become core platform competitiveness. ⑤ Discovery shopping for hyper-personalized experiences: discovery shopping that fuses short-form content commerce with live commerce spreads. ⑥ Intensifying competition to secure sellers: securing quality sellers emerges as a decisive factor in platform competitiveness. ⑦ Sophistication of e-commerce delivery and logistics strategy: same-day and dawn delivery standardize and logistics automation deepens.

What this means for M&A. The reshaping of e-commerce points to three deal directions. First, CBEC expansion will energize equity investment in cross-border listing-support and logistics firms for Korean brands going overseas, and in local e-commerce platforms in target markets. Second, companies specializing in hyper-personalized recommendation engines, AI search, and logistics automation will become bolt-on targets for large e-commerce platforms. Third, sale or merger transactions involving small and mid-sized e-commerce platforms struggling with profitability are likely to rise — opportunities for both strategic and financial investors.