Top 10 Innovative Korean eCommerce Startups to Watch – Best of 2020

Amazon and Alibaba have done a great job of changing how consumers think about shopping online.  eCommerce 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 eCommerce is an innovative and extremely competitive industry, there is always room for new and innovative Korean eCommerce startups that can disrupt the digital retail marketplace.

Why eCommerce 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 pay 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 is very dense, this makes it easier to set up logistics compares to other cities around the world. Therefore, Korea’s eCommerce spending per capita has ranked 3rd for over a year.

Korea is so well connected and delivery times can be cut down to a day, more and more eCommerce startups are looking to break into the market. We will cover Fashion eCommerce startups in another article. So what are the top 10 innovative Korean eCommerce startups to watch in 2020?

The rankings were comprised by the Seoulz staff and are based on 4 factors:

  • Funding
  • Market Opportunity
  • The innovation of service or product
  • Growth Potential/Scalability

Here is our list of the top eCommerce startups in Korea

1. Coupang

CoupangCoupang is called the Amazon of South Korea. it is the top eCommerce startup in South Korea. It is now worth over $9 billion dollars and has become an eCommerce startup Unicorn in Korea. It didn’t start out as a third party online market place. 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. Online sales in South Korea easily surpassed $100 billion in 2019. That makes South Korea 5th in regards to eCommerce sales. By 2023, it is expected to move to 3rd place behind China and the United States. This is mainly due to high internet speed and high smartphone adoption in Korea.

Coupang will be preparing for an IPO as soon as 2021. There is a lot of debate as to who will go public first, Coupang or TMON. Coupang had more than $10 billion in gross merchandise value on its platform as of 2019. COVID-19 has also helped in the increase in sales in 2020. While Coupang is still not yet profitable, it will follow in the footstep of Amazon look towards long-term gains ahead of short-term profits.

“The environment that Korea has, the high urbanization, the extreme population density, and the IT infrastructure. Those are things that I think will be shared by customers in many areas, many regions, especially in Asia, as they modernize,” said the CEO/Founder of Coupang Bom Kim.

2. TMON

Korean eCommerce StartupTMON 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. Now the late-stage startup is planning to do an IPO.

Mirae Asset Daewoo to lead first eCommerce IPO

TMON hired Mirae Asset Daewoo as its lead manager for IPO which could be planned for 2021. TMON has turned a profit back in March of this year as more and more people shopped online due to COVID-19. If the IPO goes through, TMON will become the first eCommerce platform in Korea to go public.

“We have opted to go public to increase capital stably and strengthen management transparency. We will work hard to improve earnings this year to dispel market concerns on loss-making eCommerce operators,” said the CEO of TMON Lee Jin-won.

3. Market Kurly

Korean eCommerce Startup Market KurlyKorean 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 D round that reached a total of $113 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.  Their revenue in 2019 reached over $130 million. Kurly doesn’t just sell fresh produce, they also sell fresh fish like salmon and meats like beef, chicken, and pork.

The company has had so much success that bigger eCommerce companies like Coupang and E-Mart have started to offer overnight delivery for fresh foods in certain locations.

Paper over Plastic for Market Kurley

Market Kurly has made changes to their delivery packaging by replacing disposable packaging with reusable eco boxes. It is estimated that the change will reduce 750 tons of plastic waste and over 2,100 tons of styrofoam waste per year. Therefore if the consumer sends back empty paper boxes, Market Kurly will give them to a recycling company for reuse.

4. 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. It is now the biggest handmade craft online market in Korea and has already does 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.

5. Hello Nature

Hello NatureKorean grocery eCommerce Startup Hello Nature was founded in 2012 and its focus is to offer compact 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 convenient 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. Their focus on eco-friendly material 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.

6. Grip

Grip Live StreamEcommerce startup Grip uses live streaming to create a marketplace where sellers can live-stream videos to interact with online customers. They will focus on advancing its recommendation system for online customers to stimulate global expansion to target markets in Southeast Asia. Grip was able to raise $6.8 million for its Series B round. The investment came from Korea Investment Partners, Neoplux, and TBT. Grip has become the first mobile-based live streaming commerce platform in South Korea.

“Live commerce is disrupting the traditional eCommerce industry and is blurring the line between marketing and distribution. Social influencers are facing the need to take on the new role as commerce influencers,” said the CEO of Grip, Kim Han-na

7. Kmong 

kmong Korean ecommerce StartupKorean freelancer eCommerce startup Kmong is cashing in on the fact that more and more Koreans are looking to become freelancers. Kmong is an online talent marketplace that helps freelancers sell their services. There are many categories on the Kmong platform from designers, marketers, and artists, just to name a few. In addition, the platform attracts corporations and enterprises looking to find fresh new talent.

Kmong is considered to be the top freelancer marketplace in Korea with over 250,000 freelancers and clients.

For 2019 Kmong will look to incorporate Blockchain technology into their platform. They already partnered up with Talao, a decentralized protocol for the freelancing economy.

“We’re different from headhunters or outsourcing agencies in that we don’t propose hires – instead we cater to immediate needs for short-term projects or specific tasks, like translating an investor-relations report,” said Tony Park the CEO at Kmong.

8. Soomgo

Korean Startup SoomgoKorean eCommerce startup Soomgo is an open marketplace for professional services. People can go on the Soomgo platform and search for professionals in a variety of services such as interior, cleaning, relocation/moving, tutoring, and even weddings. Their aim is both to make unknown freelancers more accessible to consumers as well as offer consumers an open marketplace to find the right professional.

“In South Korea, there is a dire need for tools and for platforms that really help freelancers and small businesses to fill the gap in what is traditionally a conglomerate-driven culture,” said Robin Kim, CEO at Soomgo.

Most of the users are students looking to get help on their school work. However, Soomgo is working hard to stop any ghostwriting or dissertation writing for college students in Korea.

Soomgo was a part of Y Combinator’s 2017 Winter batch. In 2018 they were able to get $3.4 million for their Series A investment round. Therefore, this puts the total amount of investment fund Soomgo successfully raised at $ 4.7 million dollars (approximately 5 billion Korean Won).

9. MARPPLE

MARRPLEMARPPLE is a leading global e-commerce platform for print-on-demand (POD) for clothing and accessories. They offer a complete solution for mass-customization from eCommerce to manufacturing. The site is a platform for custom clothing and personalized goods. Users can create their own t-shirts or other personalized clothing products. They can customize the text, design, and image for custom products like clothes, bags, and even phone cases. MARPPLE has become a platform for influencers, organizations, and individuals that are looking to showcase their designs to the world.

The startup started out as a brick-and-mortar shop in Hongdae over a decade ago. However, in 2015, they shifted their business online. They now offer a diverse range of products from gifts for the family to customized photo accessories for friends. Their pop selling items are related to K-pop and other Korean pop culture elements.

“Our local customers have very high standards when it comes to print quality. We can’t push off on enhancing our technology as mediocre quality immediately leads to customer complaints. When we compare our products against overseas POD samples, they are rarely better than ours,” said Park Hye-yoon the Founder of MARPPLE.

Their focus for 2020 will be to offer a platform that will continue to help designers create and sell merchandise without the need for initial capital. Therefore anyone will be able to start an online business and get rewarded for their designs.

10. ArtAlleys

ArtAlleysArtAlleys 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. Thousands of artists from around the world showcase their art on ArtAlleys. Every piece of art is original and signed by the artist.

HONORABLE MENTIONS

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 from artists all around the world. Artists simply need to log into BBuzzart and create their own profile. Then they will be able to upload their artwork.

Every week BBuzzart recommends new artworks to its users by 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 in 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.