The Korea Herald

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Online sales exceed brick-and-mortar retailers

By Korea Herald

Published : April 5, 2015 - 18:53

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Retail ecommerce sales recorded more sales than brick-and-mortar retailers for the first time in history in 2014, according to data by Statistics Korea on Sunday.

Online shopping malls were the largest retail channel in terms of transaction volume, according to the statistical office, as a growing number of consumers turn to the Internet or mobile devices for more convenient shopping and competitive prices.

The total amount of online and mobile transactions in the country, including purchases made directly through overseas online shopping malls, came to 46.9 trillion won ($42.92 billion) last year, exceeding the 46.64 trillion won tallied for chain supermarkets, the data showed.

“Online malls’ growth momentum is expected to continue as they have a price competitiveness and flexibility to adopt a fast-changing shopping environment,” said an official at 11Street, an online Korean shopping site.

Experts predict that online shopping mall sales would exceed supermarket chains, even after excluding the direct purchase from overseas online sites this year.

Last year, online retail sales grew by 17.5 percent, while supermarket chains saw an average of 3.4 percent growth in sales.

The total sales of department stores was far behind those of other retail competitors, including supermarket chains and online shopping malls, at 29.2 trillion won last year, down 1.9 percent from a year earlier.

Globally, online retail is expected to increase 13 percent per year from 2010 to 2015, while storefront retailing will struggle in the low single digits, according to research from Cisco Internet Business Solutions Group.

Online shopping malls such as open markets and social commerce continue to gain traction, particularly in the mobile sector.

Retail sales on mobile platforms skyrocketed 125.8 percent to 14.8 trillion won in 2014, up from 6.5 trillion won in 2013.

By Park Han-na (hnpark@heraldcorp.com)