South Korea is a pioneering online retail market worldwide

➡️ The food retail industry in South Korea has changed drastically since the opening of the first large discount store (E-Mart by Shinsegae Group) in 1993 and since the liberalization of the foreign-owned retail trade in 1996.

Online retail is the fastest-growing sales channel in the grocery sector, with an 84% increase in sales between 2014 and 2016, followed by convenience stores (53.5%). Supermarket, hypermarket, and department store sales are projected to stagnate in the coming years. Instead, online retail sales are expected to continue growing due to their advantages in flexibility and quality, which consumers value. Sales at traditional street vendors and small family businesses are expected to continue declining.

Suitable for:

• Urbanization in South Korea

Key trends in product range changes include home meal replacement (HMR) products, fresh produce, portioned products, and private label brands. Leading markets are also striving for more efficient promotions (online coupons, membership programs), stronger customer service (in-store services such as pharmacies, laundry facilities, and post offices), and online shopping with delivery.

The establishment of online stores and expansion into foreign markets (primarily China and South Asian countries) are some of the key growth strategies employed by leading hypermarkets. Due to intense competition from online retailers, hypermarkets have also pursued aggressive low-price policies for essential consumer products such as pork and instant noodles. Leading companies have also significantly altered their product range strategy to facilitate growth, incorporating private label brands, direct imports, home meal replacement products, and direct sourcing from partner farms.

Changes in consumer lifestyles, coupled with the introduction of new information technologies, have led to rapid growth in online retail over the years. Furthermore, the high population density and the large proportion of urbanized residents (83% in 2015) provide a perfect environment for the development of online retail.

In 2016, total online retail sales reached €47.83 billion. In recent years, working households have led to considerable growth in online grocery retailers.

The value of food and beverages sold online increased by 97% between 2011 and 2016 (a growth rate higher than that of online retail as a whole), reaching approximately €261 per household in 2016. Beverages ordered online accounted for 13% of total online retail sales.

South Korean consumers initially welcomed the cross-channel online options offered by established grocery chains on subways, such as Tesco's HomePlus service. This allows commuters to scan groceries with their mobile phones and have them delivered to their homes. Many now prefer services like Coupang and Tmon, which allow for quick online ordering of fresh groceries.

In the coming years, online retail of food and beverages is expected to continue growing due to persistently lower prices and improved services generated by intense competition in this sector. In particular, online retail should prove to be an efficient distribution channel for imported specialty products that have limited but diversified demand.

E-Mart, the largest discount retailer in South Korea, focuses on expanding its various distribution channels within the country.
A key component of this strategy is the automated warehouse system from DAIFUKU .

Suitable for:

• Autonomous Retail Systems – E-Mart's E-Commerce Strategy

According to estimates, online retail in the food sector generated sales of €5.76 billion in 2018. Sales are projected to grow by an average of 7.9% annually, reaching a market volume of €7.81 billion in 2022.

In Germany, online sales in the food and beverage industry are estimated at €1.26 billion in 2018 and are growing by an average of 11.4% annually.

In a global comparison, the highest sales are achieved in China (USD 15.72 billion in 2018).

SSG.COM – http://www.ssg.com/
SSG.COM is an integrated company consisting of two online shopping stores – the Shinsegae department stores shopping center and the E-Mart discount store shopping center.

Suitable for:

• Autonomous Retail Systems – E-Mart's E-Commerce Strategy

CJ O Shopping – http://minishop.gmarket.co.kr/cjmall0
Online Retail – CJ O Shopping is South Korea's first home shopping company. It is a subsidiary of the CJ Group and was founded in 1994. CJ Mall is the company's online shopping website.

GS Home Shopping – https://www.gsshop.com/index.gs
Online Retail – GS Home Shopping is one of the first home shopping companies in South Korea. It was the first to introduce TV shopping in South Korea in 1994. Today, the company is one of the largest online retailers.

Hyundai Home Shopping Network Corporation – https://www.hyundaihmall.com/Home.html
Online Retail – Hyundai Home Shopping Network Corporation is an online home shopping company in South Korea. It was founded in 2001.

Lotte Home Shopping – http://www.lotteimall.com/main/viewMain.lotte?dpml_no=1
Online Retail – Lotte Homeshopping is an online home shopping company in South Korea. It was founded in 2001 and has an annual turnover of over €29.19 billion. The company has 924 employees.

NS Shopping – http://nseshop.com/
Online Retail – NS Shopping is a major online home shopping company in South Korea. It was founded in 2001.

SK Planet – https://www.11st.co.kr/
Online Retail – SK Planet Co., Ltd., a subsidiary of SK Telecom, was founded in 2010 and is an ‘Internet platform’ development company based in Pangyo, South Korea’s Silicon Valley, with offices in 8 countries. SK Planet was spun off from SK Telecom to focus on online retail.

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• South Korea – Future market for renewable energies