FAS/Seoul Monitoring of Media Reporting on Agricultural Issues
Today's Date: Friday, May1, 2020
For Coverage: April 23 ~ May 1, 2020
Robots for "Untact"
Customer Services under COVID-19
Summary: Korea Telecome (KT) announced on April 30 that its
collaboration project with Hyundai Robotics supplied 2 hotel robots to Novotel
Ambassador Hotel Seoul. KT said the robots are connected
to the hotel's on-line network and can make automated "untact (no personal
contact)" guest room deliveries 24 hours a day. Baemin, the leading
restaurant meal delivery service in South Korea, reported that it had recently expanded
its 'robot server' rental program to over 50 restaurants as many of its client
restaurants requested the program to provide safe "untact" serving
service to consumers. Baemin began its robot
server program in November 2019.
South Korea Saw a Trade Deficit
in April During COVID-19 Outbreak... First Trade Deficit in 99 Months
Summary: Korea Ministry of Industries and Trade
(MIT) reported that Korean international trade amounted to $36.9 billion in
exports and $37.9 billion in imports in April 2020, down 24.3 percent and 15.9
percent respectively from the previous month, resulting in $950 million of
trade deficit. MIT pointed out that it was the first monthly trade
deficit recorded in 99 months.
Lotte Challenges Coupang with
Same Day Delivery Service
Summary: Lotte Shopping launched its consolidated
on-line shopping platform, Lotte On, at the end of April. Lotte's key
strategy for Lotte On is 'within 2 hour delivery service' based on its
vast network of conventional stores (Lotte Mart, Lotte Super, and Seven Eleven
convenience stores) throughout the country that will work as fulfillment
centers for on-line orders. The strategy is to compete against Coupang,
the leading on-line retailer in the market. Coupang expanded sales
rapidly by offering its 'early morning delivery service'. Coupang
announced earlier this week that it launched 'same day delivery service' for
fresh grocery orders placed before 10 a.m. in the morning. Marketers
agree that on-line retailers will make additional efforts to shorten
their delivery time to attract consumers.
Pork Meat, Cabbage, Eggs,
Salmon, Bananas Up ... Milk, Flounder, King Crab Down ... Food Prices Fluctuate
Summary: It has been about 100 days since
COVID-19 broke out in South Korea. During this period prices of food and
agricultural products fluctuated due to changes in consumption patterns and
supplies. Home cooking increased by 83 percent (a survey by Korea Rural
Development Agency in early April) while dining out saw a significant decline
during the COVID-19 outbreak. Products associated with home cooking, such
as pork, eggs, and cabbage, increased in price. Products that rely on
imports, such as salmon and bananas, also increased in price due to reduced
production and shipments by foreign suppliers. On the other hand,
products that are marketed through foodservice channels such as flounder,
abalone, and king crab dropped in price as restaurant demand declined.
Milk relies heavily on school feeding program saw price declines as
schools were closed.
comparison before and after COVID-19)
- Pork belly cut meat (EMART retail): 1,480
won per 100 gram (Feb) > 1,950 won (Apr)
- Cabbage (Wholesale market): 2,980 won per
head (Feb) > 4,980 won (Apr)
- Salmon (Wholesale market): 2,980 won per 100
gram (Feb) > 3,580 won (Apr)
- Milk (EMART retail): 5,950 won per 2.3 liter
pack (Feb) > 4,980 won (Apr)
- Flounder (Wholesale market): 34,800 won per
450 gram (Feb) > 29,800 won (Apr)
- King crab (Wholesale market): 8,900 won per
100 gram (Feb) > 6,480 won (Apr)
Local Garlic Harvest This Year
Likely to Increase 17% ... Government Deploys Price Support Program
Summary: The Korea Ministry of Agriculture, Food
and Rural Affairs (MAFRA) reported on April 30 that it will deploy measures to
stabilize garlic prices as domestic production is forecast at 360,000 metric
tons this year, 17 percent higher than normal. MAFRA has already
supported local farms to reduce garlic acreage by 500 hectares in March to
reduce production (equivalent to 7,000 metric tons). MAFRA will implement
government purchases for longterm storage, export assistance program, and
retail sales promotions to reduce market supply by an additional 45,000 metric
Korean Economy Continues to
Struggle in March During the COVID-19 Outbreak http://www.donga.com/news/Main/article/all/20200429/100851466/2
Summary: The Korea National Statistics Office
(NSO) released on April 29 its monthly ¡®Industry Activity Trend Statistics¡¯ for
March 2020. The data confirms that the Korean economy continued to
struggle in March due to the COVID-19 outbreak. Overall production and
consumption declined from the previous month. NSO added that the impact
of COVID-19 around the world would likely further damage the Korean economy in
April as Korean exports are likely to decline. Below table is a summary
of the government data released:
Key Sector Outcome
-0.3 percent decline from the
-17.7 percent for restaurants
-3.4 percent for chemicals
+2.6 percent for finance
+45.1 percent for automobiles
-1.0 percent decline from the
-4.4 percent for disposable
products, including food and cosmetics
-11.9 percent for
semi-disposables, including clothing
+14.7 percent for durable
products, including automobile
+7.9 percent growth for
Corporate Jobs Decline by
225,000 in March under COVID-19 ¡¦ Restaurants and Hotels Lost the Most Jobs
Summary: According to the monthly employment
report for March 2020 released by the Korea Ministry of Employment and Labor
(MEL) on April 28, the number of corporate employees in Korea totaled
18,278,000, down 1.2 percent (or 225,000 people) from the same month last
year. Restaurants and hotels saw the largest decline in the number of
employees, down 12 percent (or 153,000 people). Part-time jobs saw much
higher decline (-7 percent) compared to full-time jobs (-0.1 percent).
Price of Local Flower Crabs Up
8% This Season due to Low Catch
Summary: Wholesale market price of local flower
crabs marked 48,500 won ($39.4 USD) per kilogram in the third week of April, up
8 percent from the same period last year. April is a peak season for
local flower crabs but the lower catch this year has resulted in reduced supply
and higher price.
Coupang Launches Same Day
Delivery for Fresh Groceries
Summary: Coupang, the leading on-line retailer in
South Korea, announced on April 29 that it launched a ¡®same day delivery
service for fresh groceries¡¯. The service, available only to Rocket Wow
Club members ($2.4 USD monthly fee), delivers fresh groceries ordered before 10
a.m. by 6 p.m. the same day. There is no delivery fee charged if the
order amount is 15,000 won ($12.2 USD) or higher.
President Trump to Order Meat
Processors to Continue to Operate
Summary: The Bloomberg reported on April 28 that
U.S. President Donald Trump was going to issue an administrative order to keep
meat processing facilities in the United States in operation despite COVID-19
infections among the workers.
Vietnam Allows 340 Korean
Business Travelers to Enter
Summary: According to the Korea Ministry of
Foreign Affairs (MFA), the Vietnamese government has allowed 340 Korean
business travelers from 143 companies to enter Vietnam and engage in business
activities such as construction or management of processing facilities.
The travelers will depart for Vietnam on May 29 in two chartered flights.
MFA said this is the first large group of foreign travelers that Vietnamese
government approved for entry since it introduced outright travel ban on
international travelers on March 22. The travelers will be required to
take COVID-19 testing before boarding the flights and will stay 14 days under
hotel quarantine upon arrival before being released and engaging in business
Bosung Green Tea Farms Start
Summary: Green tea farms in Bosung, Junranamdo province (a major
inland area for green tea) have started the first picking. The first
picking, which generates the best quality tea leaves for the year, will continue
until mid-May. Farms are reportedly having difficulty in securing enough
labor for the picking work due to COVID-19.
New Yogurt by Purmeal Targets
Immune System Support
Summary: Purmeal, a major dairy processor in South Korea, launched
a new yogurt product, 'Triple Care'. Purmeal said the
new product offers three healthy functions, prebiotics, probiotics, and immune system support,
as it contains three different lactic bacteria along with special ingredients
such as Sanghwang mushroom extracts and zinc.
EMART Stages 'Minions'
Summary: EMART, the leading hypermarket store chain in South
Korea, launched a 'Minions'
promotion on April 27; the
promotion will last until the end of May. EMART offers some 50 food
and non-food products with a Minions-yellow
theme in the store.
Shinsegae Department Store
Introduces Station for COVID-19 Sanitary Products
Summary: Shinsegae Department Store reported on
April 27 that its branch in Gangnam-gu and Jung-gu introduced a special station
that offers a variety of COVID-19 sanitary products such as masks and hand
Korea Ginseng Corporation
Launches "Secure Your Family Immunity' Sales Promotion
Summary: Korea Ginseng Corporation (KGC) launched
a sales promotion on April 27 under the title of "Secure Your Family
Immunity". The promotion which offers a variety of processed ginseng
products that help strengthen the immune system until the end of May.
Consumer Confidence Index
Declines Further in April, Bank of Korea
Summary: Bank of Korea (BOK) reported that its
Consumer Confidence Index for April was 70.8, down 7.6 points from March.
It was the lowest level since December 2008 (67.7) when the Korean
economy was hit hard by the Asian economic crisis. BOK explained that
consumers had negative views on spending, income, debt, and job security under
the COVID-19 outbreak.
Low Cost Carriers Schedule
6,160 Flights during Upcoming Golden Week in May
Summary: Six low cost carriers (LCC) in South
Korea have reportedly scheduled 6,160 flights to local destinations during the
upcoming 'Golden Week' (April 30-May 5). A large number of Koreans will
travel during this period as three local holidays fall during the week.
Jeju island, a popular vacation site, will receive 2,614 of the flights.
However, LCCs added that the booking level in the week after Golden Week
is only 20-30 percent of the pre-COVID-19 level, reflecting high consumer
health concerns about COVID-19.
Lotte Shopping Launches a
Consolidated On-line Shopping Platform, Lotte On ¡¦ Targets $17 Billion Annual
Summary: Lotte Shopping, a leading retail company in South Korea,
reported that its consolidated on-line shopping platform, Lotte On, is launched
on April 28. Lotte On brings all products and services previously offered
in seven separate on-line shopping tools under the umbrella of Lotte
Shopping. Lotte Shopping said the consolidated platform will provide a
more catered and efficient on-line shopping experience for consumers.
Lotte Shopping targets to generate 20 trillion won ($17 billion USD) in annual sales
through the platform by 2023.
Dongwon Offers Tuna Sashimi in
Coupang for Home Delivery Orders
Summary: Dongwon, a leading fishery processor in
South Korea, reported on April 27 that its fresh tuna sashimi (sliced raw fish
meat) was launched in Coupang, the leading on-line retail store in the market,
for home delivery orders. Dongwon said the on-line delivery service will
allow consumers to enjoy fresh tuna sashimi at home without visiting stores or
Home Meal Replacement Products
Eat into Food Service Market – Koreans in Their 20s Dine Out Alone Half of the
Summary: With the spread of
COVID-19, the wave of untact sales is rapidly spreading throughout
Koreans¡¯ lives based on world-class social information networks, including
medical services, telecommuting, distance education, and delivery. This
spread has become a double-edged sword in related industries. The
catering industry, one of the top face-to-face industries, is directly affected
by this unprecedented situation. For the past five years, the frequency
of eating out by Koreans has continued to decline. The frequency of
eating out decreased from 15 times a month in 2016 to 14.8 in 2017, 13.9 in
2018 and 12.9 in 2019. There may be various reasons, but HMR products and
services have been diversified and fresh home delivery is becoming more convenient.
the domestic HMR market grew at an estimated average annual rate of 30%
over the past five years, and the market size is expected to exceed KRW 7
trillion this year. ¡®Daybreak Delivery¡¯ sales are also expected to grow
by 250% each year, exceeding KRW 1 trillion this year. The frequency
of eating out decreased, but the number of monthly meals eaten alone increased
from an average of 3.7 in 2016 to 4.2 in 2019.
COVID-19 Brings Big Shifts in
Consumer Foodservice Purchases, AC Neilson Korea Survey
Summary: AC Neilson Korea released a ¡®COVID-19 Impact Report¡¯
based on a consumer survey (500 people nationwide) it carried out on March
9-11. The survey found that Korean consumers changed their foodservice
purchasing behaviors to avoid risking infection. The ratio of consumers
who made delivery orders from restaurants increased to 52 percent (from 33
percent before COVID-19). The ratio of consumers who purchased take-out
meals in restaurants increased to 29 percent (from 23 percent before
COVID-19). On the other hand, the ratio of consumers who ate in
restaurants declined to 19 percent (from 44 percent before COVID-19).
Consumers replied that their overall outdoor activities and shopping trips
declined by 67 percent and 61 percent respectively since the COVID-19
outbreak. On the other hand, their on-line social media activities and
gaming increased 73 percent and 56 percent respectively.
Large-scale Exhibitions and
Conventions to Resume in May
Leading convention venues in South Korea have reported that they plan to reopen
facilities in May and stage large-scale exhibitions and conventions as
scheduled. The KINTEX convention center in Goyang-si plans to hold the
MBC Housing Show from May 8 and the Korea Baby Fair from May 28. The
BEXCO convention center in Busan-si plans to hold the Home Living &
Household Product Show from May 1. The convention centers will implement
measures to control COVID-19 during the events such as minimizing activities
that can generate physical contacts on the show floor and introducing wider
aisles between booths to allow enough distance between visitors.
Resorts Report Strong Reservations for Upcoming Golden Week
Summary: The week of April 30 through May 8 is called 'golden
week' in South Korea as important local holidays fall during it - Buddha's
birthday (April 30), Labor day (May 1), Children's day (May 5), and Parents day
(May 8). Many Koreans will likely engage in social and outdoor activities
during the week as indicated by strong reservations in key tourism destinations
in the country. The 28 golf resorts in Jeju province reported that their
facilities were almost fully booked for the week. Leading resort hotels
in Gangwon province also reported full booking for the week. Major
resorts in Jeolanam province reported 80 percent booking for the week.
Local governments express serious concerns for potential re-spreading of
COVID-19 during the week and are preparing for elevated disinfection measures
in key tourism areas.
Restaurant Franchises Close Stores ... Home Delivery and HMR Products are New
Summary: Leading restaurant franchises in South Korea have closed
many stores over the last couple of months due to weak sales during the
COVID-19 outbreak. According to Hankyung Business Daily's survey, the top
three restaurant franchises in the market, CJ Foodville, Shinsegae Food and Lotte
GRS, together have closed 17 stores since February due to weak sales.
Today Korea, a leading seafood buffet franchise, has temporarily closed
all stores since February 25. Leading restaurant franchises are making
efforts to find new growth opportunities by launching home delivery services
and Home-Meal-Replacement (HMR) processed foods for retail distribution.
Shopping Surges during the First Quarter
Summary: According to WiseApp, a market research service in South
Korea, major on-line retailers have generated outstanding sales growth during
the first quarter during the COVID-19 outbreak. Coopang, the leading
on-line retailer in the market, generated 4.8 trillion won of sales ($3.8
billion) during the first quarter, followed by Ebay Korea (4.2 trillion won).
WiseApp said on-line retailers saw their monthly sales expand rapidly
during the quarter, indicating consumers are switching to on-line shopping
during the COVID-19 outbreak.