Retail Platform Advertising - South Korea

Ad spending in the Retail Platform Advertising market market in South Korea is projected to reach US$3.77bn in 2024.
Ad spending in South Korea is expected to show an annual growth rate (CAGR 2024-2030) of 11.08%, resulting in a projected market volume of US$7.09bn by 2030.
The average ad spending per user in the Retail Platform Advertising market market in South Korea is projected to amount to US$123.10 in 2024.
In global comparison, most ad spending will be generated the United States (US$57.63bn in 2024).
In South Korea, the surge in e-commerce has significantly enhanced the relevance of retail platform advertising, driving innovative strategies among brands to engage consumers effectively.

Definition:

Retail platform advertising (RPA) refers to digital ads displayed on websites and apps dedicated to retail platforms, such as Amazon, Walmart, eBay, Alibaba, and JD.com. This includes all types of advertising across various devices, e.g., PCs, smartphones, and tablets, and covers formats such as sponsored products, banners, and videos. RPA specifically excludes offline retail ads (e.g., in-store displays and billboards), off-site ads (e.g., ads appearing on non-retail websites or apps), ads on social media platforms (e.g., Facebook or Instagram), and ads on search engines (e.g., Google or Bing).

Additional Information:

It is important not to confuse RPA with retail media networks (RMNs). RMNs involve digital ads that are also displayed on retail e-commerce sites or apps, but these ads are purchased through a retailer’s media network or a demand-side platform (DSP). While RMNs include ads on sites such as Amazon and Walmart, they also cover ads bought through networks such as Amazon DSP, Walmart Connect, and Etsy’s Offsite Ads, and these ads may not necessarily appear directly on the retailer’s e-commerce site or app. Unlike RPA, RMNs represent a broader approach that encompasses a range of ad placements, both on and off the retailer’s own platforms.

Digital ads displayed on websites and apps dedicated to retail platforms
All types of advertising across various devices, e.g., PCs, smartphones, and tablets
All types of sponsored ad formats, such as sponsored products, banners, and videos

Offline retail ads (e.g., in-store displays and billboards)
Off-site ads (e.g., ads appearing on non-retail websites or apps)
Ads on social media platforms (e.g., Facebook or Instagram)
Ads on search engines (e.g., Google or Bing)

The Retail Platform Advertising Market in South Korea is experiencing mild growth, influenced by factors like heightened competition among platforms, evolving consumer preferences, and the increasing integration of data analytics to enhance targeting and personalization strategies.

Customer preferences: Consumers in South Korea are increasingly gravitating towards personalized and curated shopping experiences on retail platforms, driven by their desire for convenience and tailored recommendations. This trend is particularly evident among younger demographics, who prioritize unique and localized products that resonate with their cultural identity. Additionally, the rise of eco-consciousness is prompting consumers to support brands with sustainable practices, influencing retail advertising strategies to emphasize ethical sourcing and eco-friendly initiatives, thereby reshaping market dynamics.

Trends in the market: In South Korea, the Retail Platform Advertising Market is experiencing a surge in demand for hyper-targeted ads that cater to individual consumer preferences. This shift is being driven by advancements in artificial intelligence and data analytics, enabling brands to create personalized shopping experiences. Additionally, the trend toward mobile shopping continues to grow, particularly among younger consumers who favor seamless, on-the-go purchasing options. The increasing emphasis on sustainability is prompting retailers to highlight ethical practices in their advertising, shaping brand loyalty and consumer choice. These trends are crucial for stakeholders to adapt strategies that resonate with evolving consumer values.

Local special circumstances: In South Korea, the Retail Platform Advertising Market is uniquely influenced by a tech-savvy population and a highly competitive landscape dominated by major players like Naver and Coupang. The cultural emphasis on trends and social media engagement drives brands to adopt visually appealing and interactive advertising strategies. Additionally, stringent regulations on consumer data protection shape how companies implement targeted campaigns, making transparency and trust vital. This environment fosters innovation as retailers strive to capture the attention of consumers who prioritize convenience and personalized shopping experiences.

Underlying macroeconomic factors: The Retail Platform Advertising Market in South Korea is shaped by several macroeconomic factors, including the rapid digital transformation of the economy, consumer spending patterns, and international trade dynamics. The country's robust economic recovery post-pandemic has led to increased disposable income, encouraging higher consumer engagement on retail platforms. Furthermore, fiscal policies promoting digital innovation and infrastructure investment have bolstered the growth of e-commerce advertising. Global shifts towards online shopping also enhance the competitive landscape, while local trends in consumer preferences necessitate adaptive advertising strategies that prioritize technology and personalization.

Data coverage:

Data encompasses enterprises (B2B). Figures are based on Retail platform ad spending and exclude agency commissions, rebates, production costs, and taxes. The market covers advertising by businesses for digital advertisements.

Modeling approach:

Market sizes are determined by a combined top-down and bottom-up approach, based on a specific rationale for each market. As a basis for evaluating markets, we use annual financial reports of the market-leading companies and industry associations, third-party reports, and survey results from our primary research (e.g., Consumer Insights). Next, we use relevant key market indicators and data from country-specific associations, such as GDP, internet users, and digital consumer spending. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, the S-curve function is well suited to forecast digital products due to the non-linear growth of technology adoption, whereas exponential trend smoothing (ETS) is more suited for projecting steady growth in traditional advertising markets.

Additional notes:

Data is modeled using current exchange rates. The impacts of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. The market is updated twice per year. In some cases, the data is updated on an ad-hoc basis (e.g., when new relevant data has been released or significant changes within the market have an impact on the projected development).

This report presents a comprehensive analysis and additional information on the Advertising & Media market, in a PDF format.