Some of the world’s leading eCommerce experts recently gathered in Seoul to discuss how e-commerce can help Korea expand its retail market says Peter DeCaprio. Over 100 startup companies related to the retail market attended the meeting to find out about online businesses that are growing exponentially around the world. This article introduces leading E-commerce trends that will change not only Korea’s but also the North Korean business industry.
North Korean Retail Market
The latest news is that North Korea has decided to open up their country for foreign investments, which could become a huge opportunity for global E-commerce players like Amazon and Alibaba since they tend to invest friendly budget on logistics than any other expense. With 5 million smartphones estimated by 2019, it means even more favorable conditions for smartphone-based C-2C (consumer-to-consumer) models like Tindie, Etsy, or Mercari.
North Korea’s Ecommerce Market
It seems that the North Korean population is ready to embrace eCommerce as their favorite way of shopping and retail market for the first time. The country has a massive amount of people and one of the world’s lowest internet penetration rates at just above 1%, which doesn’t seem like it should be so bad if you take cellular subscriptions into consideration (over 5 million). After years of isolation from United Nations trade sanctions, economic reforms have been slowly surfacing in North Korea since 2016, such as special economic zones or new tax laws. Outsiders are now allowed to invest there – even online retailers. Largely due to its neighbor China, which accounts for over 90% of North Korean trade?
Instagram Changes Market Potential in North Korea
The potential market for e-commerce in North Korea is enormous and could be a huge growth factor for many startups. But it doesn’t really change a lot since a large percentage of the population. Will still not have internet access or money to spend online. Peter DeCaprio says what does matter however is that more than 1 million people. From Pyongyang alone have been estimated by the South Korean government to have an Instagram account? The majority of them are under 30 years old and this shows. That they might be ready to embrace e-commerce just like anybody else. This means that influencer marketing may not only help you grow your target audience. But also change retail market conditions in North Korea even before eCommerce takes hold.
#Ecommerce Trends that could Change North Korea’s Retail Market
1. Influencer Marketing
Influencer marketing in 2019 will be a must in every brand strategy and with 1 million Instagram accounts in Pyongyang, influencers might single-handedly change Ecommerce in 2020 by introducing this market to global players. Given its under 2% internet penetration rate, it might be more effective than advertising or any other method of promotion within the country since traditional media has had no impact on its citizens so far. Social Media is king already so it doesn’t really matter what specific platform will become the most popular one – just as long as there are enough people online to buy stuff from your website!
2. Online payment systems that bring more than just convenience
Online payment systems such as PayPal or Stripe might not be that popular in North Korea yet but money transfers and remittances seem to be. The country is ranked 7th in the world for receiving remittances from its neighbor China. Which might give a hint where online payment system startups should start their journey. For many years now people were not allowed to make any transactions. Between North and South Koreas due to sanctions, which meant that basically, all trade had to go through China. Given this fact, it makes sense that the majority of them might still prefer cash over card payments. When they need to buy goods online (only around 22% of the global population prefers cards).
3. Cellular market growth with ecommerce in mind
No matter how much North Korea opens up for E-commerce. It will have to embrace smartphones to introduce new ways of retailing goods online. This would mean the birth of C-2C (consumer-to-consumer) e-commerce models like Tindie, Etsy, or Mercari. Where a wide variety of both physical and digital products are sold by regular consumers directly. Without any middlemen involved explains Peter DeCaprio. Also given that North Koreans are already used to sending each other money via MMS. They might also start buying cell phone credits. With which to use services such as WhatsApp. Instead of trying to deal with PayPal or Stripe payment systems that are not yet widespread there. With almost 5 million smartphone subscriptions expected by 2019. It seems only natural that these platforms should gain more popularity very soon.
Peter DeCaprio says The rapid growth of North Korea’s young Instagrammers. The remittances from China and the developing C-2C market are all huge factors that might change Ecommerce in 2020. This means that it just makes sense for online retailers. To start thinking about how they would adapt their business models. To support North Korean consumers who would love nothing more than buying goods internationally without having to rely on middlemen.