2018 RETAIL ASIA-PACIFIC TOP 500
Mobile Internet retailing to become the next wave of
Internet revolution
Improvements in mobile technology and payment security
have made Singaporeans more confident about making mobile
purchases. This will not only impact traditional retailers, but
also Internet retailers who were considered “first-
movers” in the field; it is now increasingly crucial
not only to have a mobile-friendly website, but
more importantly to facilitate transactions via
a brand’s mobile application as well.
— Chayadi Karim,
Analyst
SOUTH KOREA
Continual economic slowdown
adversely affects retailing in South
Korea
As the domestic economy continues to record
stagnant growth in South Korea, retailing has been negatively
affected by the situation. Although retailing registered constant
value sales growth in 2017, the rate was slower than in 2016.
Furthermore, lower consumer confidence owing to the economic
stagnation has adversely impacted many channels and its prod-
ucts differently in South Korea. Internet retailing, discounters,
variety stores and warehouse clubs gained more attention in
2017 as consumers can purchase quality items through these
channels at relatively cheaper prices. Department stores could
not perform well as many consumers refrained from spending
on high-priced products.
Given the economic slowdown, cost-effective products
became popular as many South Korean consumers were more
concerned about their living costs. Therefore, many retailing
channels tried to provide well-made products with cheaper prices.
As the projected GDP growth rate for 2018 is not so promising
for the national economy in South Korea, the trends are expected
to continue during the forecast period. Many retailing channels
will focus more on attracting consumers to their platforms by
offering cost-effective products during the economic stagnation.
OV E R V I E W
and the heavy use of them. As most South Korean consumers
own mobile devices and update them very often, Internet
retailing, especially through a mobile platform, is developing
rapidly. Furthermore, as people use mobile devices heavily at
any time, the mobile Internet retailing channel is expected
to grow further. Operators in retailing aggressively develop
mobile-friendly sales platforms and provide simple payment
solutions to keep their customers returning to their channels.
Advanced technologies such as O2O services and virtual real-
ity services are drawing more consumers to mobile Internet
retailing platforms, as consumers become highly interested in
the latest technologies in South Korea.
As Internet retailing, especially mobile Internet retailing,
is a very promising retailing category in South Korea, there are
several global companies about to enter the market. Internet
retailing giants Amazon and Alibaba are about to launch in
South Korea. As they have full experience of mobile Internet
retailing and distributing know-how, the competition in mobile
Internet retailing will be severe during the forecast period. Also,
the products for mobile Internet retailing will be diversified
during the forecast period.
Fresh foods have already become major products for many
mobile Internet retailing players, due to the offering of reliable
items and rapid delivery. Previously, fresh foods were only
popular through store-based retailing outlets as many con-
sumers were concerned about freshness a nd quality. However,
as many mobile Internet retailing operators are aggressively
developing products whose quality is assured by certain spe-
cialists and delivering them rapidly to customers’ doorsteps,
the channel is increasing quickly in South Korea. As more
products and services are being developed and launched by
major operators and new entrants, the mobile Internet retail-
ing channel is set to post strong growth during the forecast
period.
Significant increase in the number of single-person
households boosted several channels in 2017
Single-person households are increasing significantly in number
in South Korea, which positively affected many retailing chan-
nels in 2017. Convenience stores, supermarkets, drugstores/
parapharmacies and variety stores were among those boosted.
Single-person households prefer small-volume, packaged prod-
ucts at cheaper prices; therefore, convenience stores, drugstores/
parapharmacies and variety stores focused on launching new
packaged products for single-person households in 2017.
Furthermore, young people occupying single-person house-
holds like to groom themselves and enjoy leisure time more than
other consumer groups, which is why operators in major retailing
channels have tried to develop and launch useful products for
them. As the number of single-person households is expected to
post strong growth again during the forecast period, the efforts
for attracting these households will be continued. Many shopping complexes are to be built in
South Korea
There are many shopping complexes such as multi-shopping
centres and premium shopping centres being built in
South Korea. Leading retailing operator Shinsegae Group
opened Starfield Coex and Starfield Hanam in 2016, and it
opened Starfield Goyang in 2017. Furthermore, it has fur-
ther plans to build Starfield Anseong and Starfield Chungra
in the near future. As its complexes include department
stores, warehouse clubs, variety stores and many store-based
non-grocery specialists in one place, they attract many
consumers. Additionally, the operator often provides cul-
tural content such as music, films and events to customers,
many of whom visit its shopping complexes to spend their
leisure time.
Premium outlets including Siheung Premium Outlet
and Hyundai Citymall Garden Five also opened in 2017.
Major retailing groups have plans to open more premium
outlets in South Korea by 2019. As many consumers visit
these shopping complexes to shop and enjoy their leisure
time, the outlets located in these shopping complexes will
attract more consumers.
Mobile Internet retailing posts significant growth,
creating new trends in retailing
Mobile Internet retailing increased in 2017, recording surprising
growth thanks to the high penetration rate of mobile devices Retailing is expected to post constant value growth
during the forecast period
Although the South Korean economy is expected to grow slowly
during the forecast period, retailing will register positive sales
Retail Asia June/July 2018
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