SEOUL, Nov.16 (Korea Bizwire) – As the market for direct purchase products from overseas continues to show dramatic annual growth, it is estimated that by 2020 the annual trade volume will exceed $20 billion.
Researcher Kim Gwang-seok from the Hyundai Research Institute (HRI) emphasized the need to establish policies that respond to the changing market, in a report entitled ‘Estimation on the future trade volume of the direct overseas purchasing market and its implications’.
According to the report, the total amount of trade through direct overseas purchases was $270 million in 2010, which increased to $1.5 billion in 2014, for an average annual increase of 54.1 percent.
Kim explained that the increased number of direct overseas purchases is the result of lower prices compared to those in Korea, and simplified payment procedures at overseas online shopping sites.
The report also revealed that 70.8 percent of women have purchased overseas products directly online, while only 29.2 percent of men have experienced direct overseas purchasing.
While most of the purchases were made in the U.S. (74.8 percent), the shares of Europe (11.1 percent) and Japan (4.7 percent) are increasing due to a drop in exchange rates.
The products purchased were mostly clothing (19.2 percent), health supplements (13.5 percent) and shoes (10.8 percent). Electronics only came in at 2.2 percent of the total purchases, but considering the increase in trade compared to last year, sales are expected to grow rapidly.
Kim expects that if the current growth rate continues with payment system infrastructure improving and expanding, by 2020 the size of the direct online purchasing market could reach $20.7 billion. However, if the growth rate slows, the market is expected to reach only $6.5 billion in 2020.
Kim sees that the expansion of the direct overseas purchase market as a benefit to consumers, and a driving force for domestic firms to improve their productivity and global competitiveness. However, the market share of domestic products could drop in the short term, putting pressure on domestic manufacturers.
Kim also suggests that by supporting the globalization of online shopping malls and analyzing big data related to the customs of imports and exports, domestic producers could adjust to the changing market situation.
By Francine Jung (email@example.com)