Electronic Commerce in Korea: Critical Success Factors

The purposes of the paper are to (1) determine critical success factors (CSF’s) for electronic commerce (EC) and (2) investigate the explanatory power of these CSF’s on firm performance in Korea. Through a literature review and interviews with managers in Korean EC firms, a list of 16 CSF’s consisting of 111 items was complied. In the second stage, questionnaires were administered to top EC managers of EC companies in Seoul, Korea. Survey results show that CSF’s have very significant explanatory power for firm performance (above 51% for both Tobin’s q and ROA). Security, privacy, technical expertise, information about goods/services, and variety of goods/services is the most explanatory CSF’s. This analysis confirms the fact that customers use EC if they feel comfortable about navigating EC for plenty of information about and variety of goods/services without any technical difficulty in a secure and private way. Regression analyses on high and low performance firms show that explanatory power indicated by R2 is higher for high performance firms than lower performance firms for both Tobin’s q and ROA. High performance firms tend to have already accommodated customer service requirements while low performance firms are working to accomplish these services.