- Korean retail sales post year-on-year growth rate of 6.8 percent in 2018 2019-02-01
The Ministry of Trade, Industry and Energy announced on January 30 that Korea’s retail sales in 2018 rose 6.8 percent compared to the previous year.
More specifically, online retail sales improved by 15.9 percent, and brick-and-mortar sales inched up 1.9 percent. While both online sales and offline sales posted growth, consumers’ preference towards online shopping was greater due to its convenience that was enhanced by new technologies and bettered delivery services.
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 super supermarket (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, the SSM operators, and the department store chains increased while those at the hypermarkets decreased.
Sales at the convenience store chains grew 8.5 percent mostly due to growing number of stores and their marketing strategies adjusted to consumers’ spending trends.
The SSM operators saw a sales growth of 2.0 percent thanks to increased food sales. They expanded the instant food category in order to respond to increasing number of single-person households.
The department store chains had a 1.3 percent increase in sales. Despite declines in the sales of accessories and clothing, greater sales of household goods, which are at higher prices, led to this expansion.
Sales at the hypermarket chains, however, decreased 2.3 percent as all item categories decreased, except for food and home appliances.
For online retailers, sales at the nine online sellers jumped 19.2 percent. While sales of all item categories improved, those of food were particularly strong due to their enhanced delivery competitiveness.
The four online shopping intermediaries experienced a growth of 14.7 percent in sales. This improvement is attributable to better shopping recommendation services and easier payment systems.
For December 2018, retail sales posted a year-on-year increase of 5.1 percent with online sales growing 14.3 percent and offline sales slowing down 0.1 percent.
With regards to offline retailers, the sales at the convenience stores chains, the SSM operators expanded while those at the department store chains and the hypermarkets contracted.
Sales at the convenience store chains grew 5.0 percent. The number of stores increased, and demand for food was strong. Sales per store also inched up 0.5 percent.
The SSM operators experienced a sales expansion of 3.8 percent mostly because of increased food sales. Demand for instant food increased, and food products were diversified.
Meanwhile, the department store chains saw a 0.7 percent decrease in sales. The warmer weather compared to the previous year resulted in a sales decline in clothing. Most of the other item categories also observed decreases, except for household goods.
Sales at the hypermarket chains also went down 3.6 percent as demand for all item categories decreased.
For online retailers, sales at the nine online sellers gained 17.8 percent, led by strong sales of home appliances and service products.
The four online shopping intermediaries also posted a growth of 12.9 percent in sales. Sales of all item categories expanded, driven by food and living/furniture.
By product, sales of all item categories, except for fashion/accessories, improved in December with global brands posting the highest growth rate, followed by service products and home appliances/culture.