Amazon and Alibaba have done a great job of changing how consumers think about shopping online.  E-Commerce is a very difficult industry to break into. The companies that keep building on trust are the ones that succeed. Coupang and G-Market are two of the most trusted eCommerce companies in Korea and dominate the space. However, since E-Commerce is an innovative and extremely competitive industry, there is always room for new and innovative Korean E-commerce startups that can disrupt the digital retail marketplace.

Why E-Commerce is so successful in South Korea

Korea’s eCommerce market is the 5th largest in the world and will be on track to be the 3rd largest by the end of 2021 (behind China and the US). There are 3 key factors that make eCommerce so successful in Korea. First is that the single-person household continues to grow and currently takes up 30% of the market. These single-person households do not have the time to do offline shopping.

The second factor is Korea’s well-established digital infrastructure and open innovation. This includes many easy-to-play mobile payment systems in Korea like Kakao pay and Toss.

Lastly, South Korea has one of the best-structured logistics systems in the world. Cities in South Korea such as Seoul are very dense, this makes it easier to set up logistics compares to other cities around the world. Therefore, Korea’s E-commerce spending per capita has ranked 3rd for over a year. In addition, purchases made through mobile phones in South Korea hit record highs in 2020/2021 due to the novel coronavirus pandemic. Online shopping transactions were up over 12%.

Who will be the next Coupang?

Coupang is called the Amazon of South Korea. After going public on the NYSE in 2021, the company is valued at over $19 billion. It was one of the first tech startups to become a startup Unicorn in Korea. It didn’t start out as a third-party online marketplace. Rather Coupang started out as a daily deals (coupon) business. The transition was a success and in 3 years (2013) Coupang crossed $1 billion in sales. Coupang is an end-to-end eCommerce platform that is designed to serve the full eCommerce journey from desktop to doorstep.

Korean E-Commerce Startups

TMON

Korean E-Commerce Startups

TMON is an eCommerce platform in South Korea. They first started off as a social commerce provider back in 2010. They sold discount tickets which could be used in stores in one region every midnight through their online platform. Two years ago, the company started to offer thousands of products at discount prices on their platform 24/7. Sales have gone up during the last two years as well as a 26% growth in customers. In 2020, they got a $340 million investment from PS Alliance for between 20-30% of the company.

When will TMON IPO?

TMON hired Mirae Asset Daewoo as its lead manager for IPO which could be planned for 2022. However, due to a change in leadership, it is more likely they will look to go public in 2023. TMON has turned a profit back in March of 2020 as more and more people shopped online due to COVID-19. They already drew an equity investment of $340 million from a Korean private equity fund in a pre-IPO move to bolster capital and corporate value before going public at some point in the future.

Danggeun Market (Karrot)

Karrot (Danggeun Market) is Korea’s largest neighborhood marketplace and community app. It offers a peer-to-peer marketplace that only shows people selling around the user’s neighborhood. The seller must be within a 6-kilometer radius. The limited range makes listings easier to spot and encourages a sense of community within the neighborhood. Users can sell, buy, and trade second-hand goods ranging from headphones to luxury yachts. In addition, users can share community information such as job/housing postings to lost and found items.

Transactions can easily be done in person. All users are verified through their mobile number and location. The app is free to use and the startup only makes money through hyperlocalized advertising.  Karrot has over 21 million monthly active users. They raised $162 million in their Series D round of funding ($205 million in total funding to date) and which takes their valuation to $2.7 billion. Karrot has also successfully branched out into the U.K. with it being available in 42 areas.

“Danggeun Market plans to fcous on accelerating further overseas market expansion for the next two years after closing Series D funding, and in South Korea, we will diversify our business, aiming to be a super app,” said Gary Kim the Co-Founder of Karrot.

Market Kurly

Korean eCommerce Startup Market Kurly

Korean grocery eCommerce startup Market Kurly allows grocery shoppers to have fresh food delivered straight to their homes. Through the Market Kurly app, customers can order their food at night (before 11 pm) and it will arrive the next morning (before 7 am). They have branded themselves well in Korea. Their service is more like the “Wholefoods” of Korean food delivery services.

The app has really taken off with middle to high-income families that don’t have the time to shop offline. More and more Korean families are focusing more on quality rather than price. This is where Market Kurly is looking to capitalize on.

“Players such as Shinsegae, which runs giant supermarket chain E-Mart, are quickly trying to move into this online space. But having started and stayed offline for so long, all of their infrastructure and know-how are focused on the offline shopping experience,” said Sophie Kim, founder of Market Kurly.

They also recently closed their series F round with $200 million which raised their total funding to over $550 million. This will help them expand outside of Gangnam and into other cities in Korea. So far the app gets around 300,000 people each month and has a valuation of $2 billion. Their revenue in 2021 reached over $800 million. Kurly doesn’t just sell fresh produce, they also sell fresh fish like salmon and meats like beef, chicken, and pork. They plan to do an IPO at some point in 2022. When that happens they will be taken off this list due to the fact that they will no longer be considered a startup.

Backpackr – idUS

 

Korean eCommerce StartupsKorean eCommerce startup Backpackr is the operator of idUS. idUS is an online marketplace for handmade/craft goods in Korea. They offer locally made handcrafted products such as accessories, cosmetics, perfume, snacks, leather goods, and more through their platform. Moreover, it is now the biggest handmade craft online market in Korea and has already done over $100 million in sales to date. The idUS app has over 8 million downloads with over 3 million monthly users. Many small businesses in Korea are using the platform to connect with customers online. To date, Backpackr has raised over $39 million in funding.

“idUS serves as a medium to introduce Korea’s excellent handmade products to foreign tourists. In addition to K-pop, K-drama, and K-fashion, K-crafts will soon become a trusted quality brand,” said the CEO of Backpackr, Kim Dong-hwan.

Hello Nature

Hello NatureKorean grocery eCommerce Startup Hello Nature was founded in 2012 and its focus is to offer compactly packaged groceries delivered to your home. In 2016, Hello Nature was bought by SK planet for $28 million (50.1% controlling stake). Hello Nature looks to work with over 13,000 CU convenience stores across Korea. The startup focuses a lot on having an eco-friendly delivery service by having all their delivery boxes made out of recyclable woven polyethylene and ice packs made of 100% organic materials.

Once customers get their delivery they can simply leave their boxes in front of their door and Hello Nature will come and pick it up. Once they pick up the boxes, they will send the boxes to a professional cleaner to reuse them for their next delivery. Furthermore, their focus on eco-friendly materials is what they feel will separate them from their competitors as more and more consumers start to care about the environment.

“I want to grow the company into a global food brand like Sunkist or Zespri. By keeping with the principle of delivering best groceries to more households, Hello Nature aims to become the Asian version of Sunkist,” said Park Byung-yul, CEO of Hello Nature.

ArtAlleys

ArtAlleys

ArtAlleys is a global artist community platform/marketplace that offers a gallery of online boutiques. They help up-and-coming artists who have small budgets get more exposure online. Therefore they connect artists to a broader range of art-lovers from all around the world. Art lovers can now purchase high-quality art from new artists through ArtAlley’s curated platform. Therefore, thousands of artists from around the world showcase their art on ArtAlleys. Every piece of art is original and signed by the artist.

BBuzzart

bbuzzart Korean StartupKorean eCommerce startup BBuzzart is a global art community for up-and-coming passionate artists. Their platform and mobile app allow artists to exhibit their work and communicate with their potential customers. BBuzzArt also runs its own Instagram where they showcase some of the works of rising artists.

There are over 40,000 artworks that are displayed on BBuzzart by artists all around the world. Artists simply need to log into BBuzzart and create their own profiles. Then they will be able to upload their artwork.

Every week BBuzzart recommends new artworks to its users through the “BBuzz pick” service. Therefore, users of BBuzzart will get a constant stream of new and interesting pieces of artwork every day. If users like the art they can buy it through BBuzzart. These pieces of art include paintings, drawings, photographs, sculptures, and so much more. Prices range from up to $500 to more than $10,000 so there will always be something for everyone. In addition, BBuzzArt recently launched an Art Streaming Service called BBuzzCanvas and just opened the showroom/gallery at Seoul Forest on the Bundang Line (Yellow Line).

BBuzzCanvas is very beneficial to both artists and art lovers. It allows emerging artists to better showcase their creative outputs and to receive the art content usage fee. Art lovers have a chance to appreciate their favorite artworks in one frame.

“We’re planning to provide an eCommerce platform where artists can sell their work directly,” said CEO of BBuzzArt, Clara Shin.

Instant Tattoo

Instant Tattoo Korean StartupKorean startup Instant Tatoo is an online shop that sells realistic instant tattoos. They recently presented at Sparklabs Demoday 12 and were a big hit at the booths where they offered free samples of their product. Their online store is a great place for those that always wanted to get a tattoo but were not sure if they want to make the lifelong commitment. In addition, the Instant Tattoo collection is very fashionable and cute and the designs are constantly updated.

The Instant Tattoo lasts for up to five days. Just apply the tattoo on your skin (make sure you wash and dry first). Take off the protective film and just place it on your skin. Press down for 30 seconds and then peel off the plastic layer. To remove the Instant Tatto0 just lightly rinse the tattoo off with warm water and lightly scrub the tattoo with a soapy sponge. The average price for the tattoos is $12.

Jeongyookgak

Jeongyookgak is a startup that focuses on online fresh meat and dairy products. Some of their offerings include pork, beef, eggs, milk, and chicken. They use big data and AI technology to transform the retail structure of fresh meat. They support the entire distribution process from packaging, delivery, and customer support. By using their AI analysis and distribution model, the entire process takes less than 4 days. They mainly target D2C commerce, which directly connects farmers and consumers. Last year, Jeongyookgak got an investment from Naver. This allows Jeongyookgak to take advantage of Naver’s logistics network.

Nurihaus

Nurihaus

Nurihaus is an online cross-border retail platform offering multi-category products. The product catalog includes stationery, home decor, fashion, tech products, and more from various brands. The company offers worldwide shipping. They offer a unique feature called “Shop by Influencer” which allows you to follow your favorite influencers and buy their recommended products at a discount. Therefore, their online store is curated by influencers, and all products are made in Korea.