Affluent Gen Xers lead e-commerce shopping in South Korea

Affluent Generation Xers, also pioneers in the digital landscape who navigated the early days of personal computing and witnessed the advent of the internet, have emerged as the primary users of online shopping malls in heavily wired South Korea.  

This suggests that major e-commerce players may have to fine-tune their marketing strategies, which currently focus more on the younger generation in their 20s and 30s, to improve profitability.

According to Korean retail giant Shinsegae Group’s e-commerce platform SSG.COM on Wednesday, customers in their 40s and 50s accounted for 63% of sales of its Misikgwan, or Gourmet Place in English, on which users can shop for popular ready-to-eat meal kits and premium and international foods and ingredients online.

The marketplace was initially designed to target younger shoppers. 

The age group that spent the most per order were also those in their 50s, the online shopping mall operator said.

Users in their 40s and 50s also made up 80% of SSG.COM’s so-called "VIP customers," who spent a minimum of 250,000 won ($185) per month from January to April this year.

Their average purchase value per order on the electric shopping mall stood at 85,000 won, and they shopped for groceries more than five times each month.

“Those in their 40s and 50s, who care more about quality than price and with great purchasing power have emerged as the key customers of online grocery stores,” said an official from SSG.COM.

Shoppers between the ages of 40 and 59 also appear to be primary users of other e-commerce platforms.

ACTIVE SHOPPERS ACROSS THE DIGITAL MARKETPLACES  

According to data from Korea-based app analytics firm Wiseapp·Retail·Goods, 52% of users of the country’s top five online marketplaces – Coupang, AliExpress, 11Street, Temu and Gmarket – were those in their 40s and 50s in May, beating shoppers in their 20s and 30s, who took a 33% share.

Since late last year, they have also shopped actively on AliExpress and Temu, Chinese marketplaces, which have rapidly expanded their presence in Korea with cheap products and fast delivery services in recent months.

Shoppers on AliExpress between the ages of 20 and 39 and the ages of 40 and 59 made up 34% and 53% of the e-commerce’s users, respectively, last month.

In the same month, the younger generation accounted for 28% of Temu’s total users and the older generation had 54%. On Korea’s No. 1 e-commerce player Coupang, the older group made up 46% of its total users, higher than the younger group with 37%.

AFFLUENT, TECH-SAVVY GENERATION X

This is somewhat unexpected, considering that Korean retailers have been heavily marketing to lure the younger generation in their 20s and 30s, coined as Millennials and Gen Z, or MZers in Korea, to their electronic marketplaces.

Retail industry observers think that the contactless shopping boom driven by the COVID-19 pandemic has turned the older generation in their 40s and 50s, called Generation X and already tech-savvy, into big spenders on online shopping malls.

Generation Xers witnessed the transition from analog to digital, driven by personal computers and the internet. They were early adopters of new technologies who have turned into experts, knowing how to leverage technology for efficiency and innovation without fear of new devices like smartphones.

On top of their in-depth understanding of new technology, they are also armed with wealth after decades of working as professionals.

This is why Generation Xers, not Millennials or Gen Z, have emerged as main spenders on e-commerce platforms in Korea, one of the world’s most wired countries, said industry observers.

Write to Ji-Yoon Yang at yang@hankyung.com

Sookyung Seo edited this article.