- Skip Menu
Korean retail sales grow 4.8 percent in 2019 due to huge growth in online stores
The Ministry of Trade, Industry and Energy announced on January 29 that Korea’s retail sales in 2019 rose 4.8 percent compared to the previous year.
More specifically, online retail sales improved by 14.2 percent, and brick-and-mortar sales edged down 0.9 percent. While online sales posted growth, offline sales such as hypermarket chains and SSM operators declined as online shopping expanded.
The Ministry releases monthly retail sales figures based on surveys of 26 major retailers. Half of them are brick-and-mortar retailers: three department store chains, three hypermarket chains, three convenience store chains, and four SSM operators. The other half are online retailers: nine major online sellers and four online shopping intermediaries.
For offline retailers, the sales at the convenience stores chains increased, while those at the SSM operators, the department store chains, and the hypermarkets decreased.
Sales at the convenience store chains grew 4.1 percent mostly due to growing number of stores and the change in consumption trend towards increased demand for items such as instant food and emergency medicine.
The SSM operators saw a sales decline of 1.5 percent due to intense competition and downturn in the sales of food products.
The department store chains had a 0.1 percent decrease in sales. Despite improvement in the sales of global brands, contracted sales of clothing led to this decrease.
Sales at the hypermarket chains decreased 5.1 percent as all item categories decreased.
For online retailers, sales at the nine online sellers experienced a growth of 9.9 percent. Sales of most item categories improved, backed by enhanced convenience following better shopping recommendation services and easier payment systems.
The four online shopping intermediaries jumped 15.9 percent in sales. Sales of all item categories improved, especially in food (up 37.4 percent).
For December 2019, retail sales posted a year-on-year increase of 3.0 percent with online sales growing 10.5 percent and offline sales slowing down 1.9 percent.
With regards to offline retailers, the convenience stores chains showed growth, but the sales as a whole contracted due to weak demand in seasonal goods caused by the rise in temperature compared to the year before.
Sales at the convenience store chains grew 5.7 percent. The SSM operators experienced a sales contraction of 6.2 percent mostly because of decreased food sales. The department store chains saw a 0.8 percent decrease in sales. The warmer weather compared to the previous year resulted in a sales decline in clothing. Sales at the hypermarket chains also went down 7.4 percent as demand for home appliances/culture and food decreased. Sales per store increased for the department store chains, but those for all other offline retailers edged down.
For online retailers, sales at the nine online sellers gained 2.5 percent, led by strong sales of food.
The four online shopping intermediaries also posted a growth of 13.7 percent in sales. Sales of food jumped 44.8 percent and those of living/furniture also went up 15.9 percent due to the expansion of the domestic pet market.
By product, sales of all item categories, except for fashion/accessories (down 5.3 percent) and kids/sports (down 5.1 percent), improved in December with global brands posting the highest growth rate (up 20.0 percent) followed by home appliances/culture (up 7.8 percent).