YouTube, in collaboration with Cafe24, a KOSDAQ-listed e-commerce solutions company, introduced a shopping store function in South Korea—a world first for the platform. (Image courtesy of Cafe24)
SEOUL, Jun. 25 (Korea Bizwire) – In a surprising turn of events, South Korea has become the latest battleground for global e-commerce giants, with YouTube making an unprecedented move to launch its first shopping-dedicated store feature in the country.
On June 23, industry sources revealed that YouTube, in collaboration with Cafe24, a KOSDAQ-listed e-commerce solutions company, introduced a shopping store function in South Korea—a world first for the platform.
This new feature allows customers to purchase products seamlessly while watching live commerce or video-on-demand content, marking a significant evolution from the previous method of redirecting users to separate online stores.
YouTube’s entry into the Korean e-commerce market follows in the footsteps of Chinese platforms like AliExpress, Temu, and Shein, intensifying competition in an already crowded field.
The decision to debut this feature in South Korea, rather than in YouTube’s home market of the United States or Europe, has caught the attention of industry insiders.
Google, YouTube’s parent company, invested 26 billion won in Cafe24 last December, signaling its commitment to this venture.
This direct investment in a listed company, regardless of nationality, is considered unusual for Google and has led to speculation that South Korea is being positioned as a beachhead for YouTube’s e-commerce expansion.
The potential impact of YouTube’s enhanced shopping features is significant. According to WiseApp Retail and Goods, YouTube dominated 33% of total smartphone app usage time in South Korea from January to May this year.
Its strong appeal to the coveted MZ generation (those born between the early 1980s and early 2000s) suggests that YouTube could reshape the domestic retail landscape in the medium to long term.
The 2024 Korea E-Commerce Fair (Image courtesy of Yonhap)
An official from a prominent domestic e-commerce platform highlighted concerns, stating, “The ascent of YouTube poses a significant threat not only to established e-commerce platforms but also to domestic home shopping companies. These companies have increasingly shifted their focus to mobile live commerce as TV viewership declines.”
Meanwhile, TikTok, YouTube’s rival, is also making moves in the Korean market.
TikTok Shop, which combines TikTok’s short-form video platform with e-commerce functionality, is expected to launch in South Korea by the end of the year.
The platform already filed a trademark in the country last December and is setting up fulfillment services.
Adding to the competitive landscape, Shein, the Chinese online fashion retailer, officially announced its entry into the Korean market on June 20.
The company established a Korean subsidiary in December 2022 and has been conducting marketing activities through social media since August of last year.
Faced with this intensifying competition, domestic platforms are scrambling to adapt. Shinsegae Group has replaced the leadership of its e-commerce subsidiaries, Gmarket and SSG.com, in a bid to revitalize their operations.
Facing strong challenges from its competitors, Coupang, the biggest player in the Korean e-commerce scene, is expanding its signature Rocket Delivery service nationwide and investing in logistics infrastructure.
Other domestic companies are focusing on improving profitability.
11Street is implementing voluntary retirement programs and relocating its headquarters from Seoul Square in front of Seoul Station to the suburb of Gwangmyeong, while Lotte ON is offering voluntary retirement for the first time since its launch in 2020.
Industry experts predict that the Korean e-commerce market is entering a period of intense competition without a clear dominant player.
As one industry insider noted, “South Korea, with its mobile-friendly shopping environment and user base, serves as an attractive ‘test bed’ and outpost for global market expansion. We expect to see various platforms with established visitor bases entering and competing in the Korean e-commerce market, with some rising to prominence while others fade away.”
Kevin Lee (kevinlee@koreabizwire.com)
