South Korea’s well-developed online shopping system helped consumers to get through the year without much difficulty. Digital payment service providers that have been expanding investments over the past few years saw a peak in consumer demand in 2020 as the influx of senior consumers who were previously less familiar with mobile shopping, drove the growth.
In the offline environment, South Korean consumers are yet to become familiar with digital payment since the majority of consumers are still paying with physical cards. However, QR code-based payment gained awareness among the public in 2020 as consumers became used to checking in with QR codes when visiting public spaces as part of COVID-19 quarantine guidelines.
In 2020, restrictions on overseas travel resulted in a significant decline in demand for travel, especially for transport. Lodging was relatively less heavily affected since staycations became an alternative to trips to foreign countries.
During the review period, South Korea witnessed double-digit growth in e-commerce following years of accelerated expansion. Plenty of room for further growth is expected over the forecast period since the South Korean market keeps experiencing an influx of the young digital natives as a major consumer segment.
In 2020, third-party food delivery apps and ride-hailing service providers helped consumers to shift to remote payments. Kakao T, for example, encouraged service users to connect their credit cards with the mobile app so that payments would be automatically processed upon arrival at the destination, which was welcomed by consumers and drivers alike as it reduced physical contact between both parties.
Prior to the outbreak of COVID-19, travel and entertainment had been expected to play a key role in the expansion of digital payment since these industries witnessed increasing spending from the MZ generation, which is proficient in using mobile devices for all matters. Despite the steep decline in overseas trips caused by the pandemic, demand is expected to show recovery along with the progress of vaccination efforts.
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