TLDR:
Key Points:
- VC funding for South Korean e-commerce startups has plunged 90% over two years, reflecting a grim outlook on the industry.
- The shift in funding to AI startups highlights venture capital’s pessimism towards the e-commerce market in South Korea.
VC funding for South Korean e-commerce startups has plummeted by 90% over the last two years, signaling a bleak outlook for the industry. Promising startups like Linkshops, OKKOT, and Onul-hoi have been forced to shut down their businesses, citing fierce competition from Chinese e-commerce platforms and falling demand post-pandemic.
While AI startups in Korea have seen an 80% increase in Series A funding, e-commerce startups are struggling to attract investments. Investors are now looking for innovative business models in the e-commerce sector, as traditional players like Coupang Inc. and Gmarket continue to dominate the market.
The shift in funding from e-commerce to AI startups highlights venture capital’s pessimistic views on the e-commerce market in South Korea. As pricing becomes a key success factor in e-commerce, startups are exploring overseas markets to find new demand and secure funding.
