FAS/Seoul Monitoring of Media Reporting on Agricultural Issues
Today's Date: Thursday, October 8, 2020
For Coverage: September 28 ~ October 8, 2020
'Traders' Warehouse Discount Stores by EMART to Achieve 3 Trillion Won of Sales This Year
Summary: EMART, a leading retail company in South Korea, reported that its 'Traders' warehouse discount store division will achieve 3 trillion won ($2.6 billion USD) in cash-register sales in 2020. EMART launched the Traders division 10 years ago to compete against COSTCO Korea. Over the last five years between 2015-2019, Traders generated 216 percent sales growth, exceeding COSTO Korea's 45 percent growth based on aggressive new store openings. Currently Traders operates 19 stores in Korea, exceeding COSTCO Korea's 16 stores. COSTCO Korea generated 4.2 trillion won ($3.7 billion USD) in cash-register sales in 2019. COSTCO Korea has also been pursuing an expansion plan in recent years with three new stores under construction for opening by the end of 2021.
Baemin Reports Strong Growth in 'To-Go' Meal Orders
Summary: Baemin, the leading online restaurant meal delivery platform in South Korea, reported that its 'to-go' restaurant meal orders increased 5.8 times this year between January and September. To better service the increased consumer demand, Baemin redesigned its smart phone application to show the 'to-go' order button in the top section. Consumers can also see the nearest restaurants where to-go orders are offered in the application now. Baemin said that its to-go order service will help the restaurant industry cope with the COVID-19 pandemic.
Garak Market to Accommodate 'Public Wholesalers', Address Problems with Auction System
Summary: Garak Market, the leading wholesale market for fresh local produce in Seoul, reported on October 6 that it would launch a 'Public Wholesaler' program in partnerships with local provincial governments. Junranamdo provincial government became the first partner for the program, signing a MOU with Garak Market on October 6. Garak Market has been running on an auction system exclusively since its inception 35 years ago, which allowed efficient distribution of locally produced fresh fruits and vegetables to the Seoul metropolitan retail market. However, the auction system has been criticized for generating large daily fluctuations in the price of products supplied to the market depending on the volume of products auctioned each day. Garak Market explained that the introduction of a 'Public Wholesaler' program will allow more stable pricing of products as the new public wholesalers will do business directly with farmers on a long-term contract. Junranamdo provincial government said that its investment and partnership into the program will benefit farmers by securing better ex-farm prices. Garak Market's analysis forecasts that the system will reduce the operating cost by 8 percent by skipping the auction tool.
Korea-Japan Agree to Open Up Borders for Business Travelers from October 8
Summary: The Korea Ministry of Foreign Affairs (MFA) announced on October 6 that Korea and Japan agreed to open up borders for business travelers with minimum COVID-19 quarantine requirements from October 8. Business travelers will be exempted from mandatory 14 day quarantine requirements if they test negative for COVID-19 upon arrival. In addition, business travelers should have a negative COVID-19 testing result confirmed within 72 hours before departure. They are also required to monitor and report their health status using a smart phone application for 14 days before departure and for another 14 days after arrival.
McDonald's Korea to Switch to Environment-Friendly, Recyclable Packaging Materials Exclusively by 2025
Summary: McDonald's Korea announced on October 5 that all packaging materials used in its stores will be replaced with environment-friendly, recyclable materials within the next 5 years. McDonald's Korea added that cooking oil used in its stores will also change to 100 percent sun flower seed oil for better health.
Sales of Snack Products Surge Due to Social Distancing
Summary: CU, a leading convenience store chain in South Korea, reported that its snack product sales increased 18 percent in August this year compared to the same month last year. CU explained that elevated social distancing measures (including telework and home school) during the second wave COVID-19 outbreaks led to increased consumption of snack products such as popcorn, cookies, and jellies at home. CU added that the consumers were willing to try new, exotic snacks during this period.
E-commerce Generates Unprecedented Sales Growth
Summary: The Korea National Statistics Office reported on October 1 that the local e-commerce industry sales index increased 30.3 percent this year through end of September compared to the same period last year as consumers opted for safe, "un-tact" e-commerce platforms during the COVID-19 pandemic. On the other hand, the duty-free shop industry sales index fell 34.1 percent during the period due to a sharp decline in international travels.
Korean Duty-Free Shop Sales Show Signs of Recovery
Summary: The Korean Duty-Free Retailer Association (DFA) reported on September 29 that cash-register sales in duty-free shops in South Korea continued to grow for four months in a row from May through August after hitting a bottom in April. According to DFA, duty-free shops in Korea generated 1.4 trillion won ($1.2 billion) in cash-register sales in August, up 15 percent from July. DFA explained that an increase in the number of both foreign travelers and Korean travelers coming in and out of the country resulted in the sales growth. During August, 75,000 foreigners and 592,000 Korean nationals shopped in duty-free shops on their international travels. However, DFA said that full-scale recovery of the duty-free industry is still far away as August sales were still 34 percent lower than the same month last year.
COVID-19 Increases Drive Thru Shopping by 70%, SK Telecom
Summary: SK Telecom, a leading telecommunications operator in South Korea, reported on September 29 that the number of drive thru services used by its mobile phone users in fast food restaurants and cafes increased 70 percent to 1 million services a month this year during the COVID-19 pandemic. SK Telecom added that drive thru shopping will likely be a long term trend as consumers continue to have health concerns.
Sales of Imported Snacks Rise as Consumers Long for Foreign Trips, CU Convenience Store
Summary: CU, a leading convenience store chain in South Korea, reported that its sales of imported snacks increased 21 percent in September this year compared to the same month last year. During the period, sales of snacks overall increased 11 percent. CU explained that consumers are not able to make international travels due to the COVID-19 pandemic so they look for other ways to satisfy their foreign tastes.
Vegan Foods Attract More Consumers
Summary: There is an increased social attention to animal welfare in South Korea, leading to new opportunities for vegan foods. Market Kurly, a leading online grocery retailer, reported that its vegan food sales during September 1 through 23 increased 146 percent compared to the same period last year. SSG.com, another leading online grocery retailer, reported that it would increase the number of vegan foods offered from the current 100 to 200 as its vegan food sales doubled this year.