"Retail Market Up 33.3% in 10 Years... Online Shopping Growth Rate 10 Times That of Large Marts"

KCCI Analyzes Retail Market Changes
Online Shopping, TV Home Shopping, Convenience Stores Lead Growth
Supermarkets and Hypermarkets Lag Behind Average Growth Rate

Over the past decade, South Korea's retail market has grown by more than 30%, with the growth rate of online shopping and TV home shopping reaching about 10 times that of large supermarkets, according to a recent survey.

On the 24th, customers visiting Hanaro Mart Yangjae Branch in Seocho-gu, Seoul, are purchasing food and goods. Photo by Jinhyung Kang aymsdream@

According to the Korea Chamber of Commerce and Industry on the 11th, based on retail sales data from Statistics Korea, the domestic retail market size last year was 509.5 trillion won, a 33.3% increase compared to 382.3 trillion won in 2014.

Except for a temporary rebound in 2021 due to the COVID-19 base effect, the market showed an annual growth rate of around 2-4%. Non-store retail (12.6%) such as online shopping and TV home shopping, and convenience stores (10.4%) led market growth, while supermarkets (1.5%), large supermarkets (1.2%), and specialty retail stores (-0.4%) lagged behind the market average growth rate (3.2%) and struggled.

With the spread of COVID-19 and the accelerated transition to a digital economy, non-store retail and convenience stores showed strong performance, but large supermarkets were affected by factors such as the increase in single-person and two-person households and prolonged business regulations.

Looking at market share by retail type, the share of non-store retail increased more than twofold from 11.8% in 2014 to 25.7% in 2023, and convenience stores (3.3% → 6.1%) and duty-free shops (2.2% → 2.7%) also expanded their market presence compared to 10 years ago. On the other hand, specialty retail stores (50.8% → 36.9%), large supermarkets (8.7% → 7.2%), and supermarkets & general stores (15.6% → 13.4%) saw their market shares shrink.

Last year, the proportion of online shopping transactions in retail sales (excluding service transactions) was 31.9%, an 84.8% increase compared to 17.3% in 2017. By product category, furniture had the highest online shopping share at 34.2%, followed by computers, home appliances, electronics, and telecommunications devices (33.0%), books and stationery (31.5%), shoes and bags (30.6%), cosmetics (25.3%), and clothing (23.8%).

The online share of food and beverages rose significantly from 7.1% in 2017 to 18.5% in 2023. Seojeong-yeon, a researcher at Shin Young Securities, analyzed, "With face-to-face consumption restricted due to COVID-19 and improved trust in online food products, the convenient 'dawn delivery service' rapidly expanded," adding, "Since the online share of food and beverages is relatively low compared to other categories, there is considerable room for further growth."

In the sales index by retail type, large supermarkets (-13.7) and supermarkets (-13.5) essentially experienced negative growth. Yonggu Seo, a professor at Sookmyung Women's University, said, "It is urgent to develop policies to prevent the decline of local commercial districts and offline retail types, as well as to ease regulations on large supermarkets to revitalize offline commercial districts."

Jang Geun-mu, director of the Korea Chamber of Commerce and Industry's Distribution and Logistics Promotion Institute, said, "We hope that the government's distribution industry development plan, scheduled to be announced in the second half of this year, will include support measures that can guarantee sustainable growth for the next 10 years."