Premia TNC Singapore Team
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The Limitations of the Korean E-Commerce Market and the Need for Overseas Expansion
Korea’s e-commerce market is becoming increasingly unfavorable for small and medium-sized brands due to fierce competition, intensifying price wars, high marketing costs, and a structure centered on large platforms. In particular, the slump in social commerce platforms like Tmon and WeMakePrice has left many sellers without sales channels, leading them to rely heavily on Naver Smart Store and Coupang Marketplace. However, these large platforms impose significant advertising and commission burdens, and payment cycle issues make it difficult for small and medium-sized brands to achieve sustained growth.
Key Limitations of the Korean E-Commerce Market
- Weakening of brand independence due to platform-centered structure
- Increased reliance on Naver and Coupang
- Rising burden of advertising and commission fees
- Long settlement cycles make it difficult to secure operating funds, weakening cash flow
- Market saturation makes it hard for new brands to establish themselves
For this reason, many Korean sellers are considering expanding into overseas markets, particularly Southeast Asia, rather than simply surviving in the domestic market. In the rapidly growing global e-commerce market, seeking new opportunities is no longer an option; it’s a necessary strategy.
The Opportunity Southeast Asia Presents for Korean E-Commerce Sellers
The Southeast Asian e-commerce market is projected to grow to approximately US$200 billion (approximately KRW 260 trillion) by 2025, and K-beauty, K-food, and K-fashion are particularly appealing to Southeast Asian consumers.
Global Consumption Trends by Country and Popular Korean Product Categories
1. Singapore and Thailand
Premium K-beauty products and high-end fashion brands has gained popularity in these countries.
2. Vietnam and Indonesia
Rising demand in these countries for popular K-beauty products and K-food items such as ramen, kimchi, and more.
3. Malaysia and Philippines
Korean lifestyle and affordable products are increasingly popular in these countries, driven by the global Korean wave phenomenon.
Opportunities for Growth in the Southeast Asian Market
- High demand for Korean brand products due to the influence of the Korean wave.
- The rise of the internet and smartphones has boosted online shopping.
- Familiarity with Korean brands due to geographical and cultural similarities.
- High growth potential in a relatively less competitive market.
Successful overseas expansion requires a balanced approach: entering e-commerce platforms (Shopee, Lazada, etc.) and building your own online store (using TikTok Shop and influencer marketing). Platform entry allows for rapid market entry, while leveraging your own online store and TikTok Shop helps build your brand and secure high profit margins.
Strategic Entry into Southeast Asia’s E-Commerce Market
The most powerful e-commerce platforms in Southeast Asia are Shopee, Lazada, and Amazon SEA. Korean brands must develop optimal entry strategies tailored to the characteristics and sales methods of each platform.
1. Shopee
Shopee operates across all of Southeast Asia and is widely recognized for its popularity among consumers who favor Korean brands. The platform offers excellent logistics support, making it convenient for sellers to manage cross-border transactions. While cross-border selling is possible, local sellers are required to have a registered corporation to operate on the platform.
2. Lazada
Lazada serves the entire Southeast Asian market, attracting a strong customer base with a high preference for luxury brands. Sellers can take advantage of both cross-border and local selling options. However, similar to Shopee, local sellers must establish a registered corporation to sell within the platform’s local marketplaces.
3. Amazon SEA
Amazon SEA covers the Southeast Asian region and provides sellers with access to its global network, allowing them to reach customers worldwide. The platform supports cross-border selling, enabling businesses to operate without necessarily setting up a local corporation.
Global E-Commerce Expansion: Entering Southeast Asia as a Local Seller
5 Benefits Related to Becoming a Local Seller
- Faster delivery and lower costs: Take advantage of Shopee and Lazada’s Fulfilled by Lazada (FBL) services.
- Support for local currency payments: Increase consumer confidence and conversion rates.
- Preferential exposure within the platform: Local seller products are given priority in search and recommendations.
- Increased opportunities for marketing and promotional engagement: Actively utilize Flash Sales, Super Shopping Day, and more.
- Shorter settlement cycles and lower fees: Local sellers can collect their revenue faster.
The Preparations Required
- Establishment of local corporations.
- Opening a local corporate account and utilizing digital financial solutions.
- Securing local logistics partners.
Direct Sales Strategies with Company-Owned Malls and TikTok Shops
The Rapid Growth of TikTok Shop
- Shift from search-based to recommendation-based video discovery, expanding product exposure.
- Short-form content (15–30 seconds) drives immediate purchase conversions.
- Live shopping enhances real-time feedback and impulse buying.
- Maximized marketing impact through influencer-led UGC (User-Generated Content).
Success Strategies for TikTok Shop
- Leverage TikTok Ads to run brand campaigns.
- Collaborate with KOLs (Key Opinion Leaders) and KOCs (Key Opinion Consumers).
- Build direct sales channels by linking with owned inventory.
Key Considerations Before Entering TikTok Shop
- Assess the feasibility of utilizing TikTok Ads.
- Develop a brand marketing plan through influencer collaborations.
- Check whether a local legal entity is required (some countries require local seller registration; cross-border selling is possible in places like Singapore and Malaysia).
Airwallex: A Global Financial Solution Built for E-Commerce
Developing a global e-commerce strategy and expanding your e-commerce business requires an efficient global financial system. Airwallex provides optimized digital account and payment solutions for global sellers.
Perks of Airwallex
- Multi-currency accounts available in over 60 countries.
- Reduce overseas settlement fees (up to 80% reduction in remittance costs).
- Settlement possible without a local account (integrated with Shopee, Lazada, Amazon, etc.).
- Reduce currency exchange costs through automatic exchange rate application.
Airwallex is supporting the overseas expansion of Korean e-commerce sellers through a strategic partnership with Premia TNC.
Premia TNC Singapore Team
Author
Premia TNC Singapore is a dynamic team of experts dedicated to supporting businesses and entrepreneurs as they establish, manage, and grow their presence in Singapore and across the region. Premia TNC Singapore specializes in providing tailored corporate services, from company incorporation and compliance to tax planning and accounting. With our extensive experience and deep understanding of the local regulatory environment, we are here to make business operations smoother and more efficient.
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