South Korea Retail Sector - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

South Korea Retail Sector - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The South Korea retail sector is projected to register a CAGR of less than 4% during the forecast period, 2021-2026.

The South Korean retail industry is one of the largest markets among the Asian countries. Modern retail businesses, such as hypermarkets, grocery supermarkets, convenience stores, and online retailing, have rapidly grown over the years in comparison to traditional retail outlets, comprising street markets and family-operated small retailers. The South Korean economy is expected to grow slowly during the forecast period due to the negative impact of COVID-19 on the economy. The retailing sector is still estimated to register positive sales growth, owing to the significant rise in internet retailing, aggressive marketing, and promotional activities from major retailing companies. However, the introduction of a number of shopping malls with elegant restaurants, trendsetting brands, cutting-edge multiplex movie theaters, and high-end supermarkets led to a change in consumer lifestyles, and this change is leading to a more advanced retail experience in South Korea. As consumer lifestyles and demographics are rapidly changing, this heavily impacts the retailing industry in South Korea.

South Korea Retail Sector TrendsRetailers Embrace Digital Strategies to Engage Customers

South Korea is one of the most connected countries in the world, with more than 99% of households having access to broadband internet, and 85% of Koreans aged 6 years or older owning smartphones. In the online shopping segment, the increasing number of local retailers have drawn on digital technologies to provide a better shopping experience for customers. As a case in point, Lotte has launched a new smart shopping service “Smart Shopper” at its food stores of Lotte Department Store Bundang branch. The new service, which replaces the physical shopping carts, allows customers to shop by just scanning the bar codes of products with a shopper handheld scanner device provided in the store. Customers can complete the payment at dedicated self-checkout terminals by tapping the handheld device against NFC readers, and after the payment, they can have their purchases delivered home. Another major retailer, Hyundai Department Store, has also introduced a quick search service “Smart Finder”, with which shoppers can find their desired products quickly at Hyundai’s online store. Smart Finder can analyze the designs, colors, and patterns of the products in the photos uploaded by shoppers and recommend similar products, saving up to 50% on searching time. New convenience formats and themes are driving the growth of modern trade, while hypermarkets look forward to retaining relevance by remodeling low performance stores into wholesale formats.

South Korea is one of the World’s Most Exciting Beauty Markets

South Korea is one of the world’s most exciting beauty markets. Appearance and beauty are very important in Korean culture. Hence, there is high demand for beauty products and surgeries that help people attain the right look. New beauty trends and innovations featuring sophisticated ingredients and aesthetically appealing packaging are constantly on display. South Korean-branded cosmetics labels have earned popularity, particularly within Asia, with the rise of the country’s cultural presence, otherwise known as “hallyu,” and continue to attract image-conscious local consumers and foreign tourists. In retail, South Korean consumers purchase beauty and personal care products not only from online retailers but also via home shopping and door-to-door sales opportunities, flagship stores, department stores, health and beauty stores, duty-free shops, aesthetic salons, and medical institutions and pharmacies, among others. Facial skincare holds more than half (51%) of the total market share in retail sales and is projected to register more than 5% CAGR over the next five years.

South Korea Retail Sector Competitive Analysis

The report covers major international players operating in the South Korea retail sector. In terms of market share, few of the major players currently dominate the market. South Korea’s retail sector is saturated with domestic players, mainly conglomerates such as Lotte, Hyundai, Shinsegae, GS, CJ, and E-land, which own multiple retail channels. These firms are known for their strong financial capabilities and huge organizational capacities. However, with factors such as technological advancements and product innovations, mid-size to smaller companies are increasing their market presence by securing new contracts and by tapping into new markets.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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