Online grocery shopping on the rise in Korea
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Grocery shopping via online and mobile channels in Korea rose sharply in the first quarter from a year earlier, backed by robust demand for delivery services of fresh food amid a rise in the number of one-person households.
The amount of transactions made for fresh produce through online shopping malls reached 2.18 trillion won (US$1.92 billion), up 35.6 percent from the first three months of 2016. Of the total, purchases made via mobile devices soared 56.7 percent on-year to 1.55 trillion won over the cited quarter.
In March alone, grocery shopping accounted for 11.7 percent of all online purchases tallied, trailing behind travel and booking by just 3 percentage points. In terms of mobile purchases, food shopping took up the biggest portion at 14.5 percent. Analysts attributed the brisk growth to an aggressive expansion of online-based fresh food delivery services by key e-commerce companies and related start-ups.
The diversification of fresh food supplies and shortened delivery periods due to heated market competition has led to the overall increase of the transactions and improvement of online shopping services for consumers. The growing number of single-person households is another factor that has fueled the demand for online grocery shopping.
“In March alone, grocery shopping accounted for 11.7 percent of all online purchases tallied, trailing behind travel and booking by just 3 percentage points.”
Along with many double-income families that have little time to shop at a supermarket, those who live and eat alone have shown a tendency to spend generously if they can have groceries delivered with a simple click. One-person households in Korea account for some 35 percent of the total population as of September 2016. The trend has prompted local retailers and e-commerce companies to scramble to launch fresh food delivery services.
SK Planet, the operator of leading online shopping mall 11st, is running a wholly-owned subsidiary, Hello Nature, which offers compact package deliveries of groceries. Baemin Fresh is another player, run by mobile delivery app provider Woowa Brothers, which has been actively expanding its foothold in the mobile grocery shopping business. In a recent media release, it said the number of Baemin Fresh users has surpassed 240,000 since it launched its mobile app last February. Other e-commerce sites, including Ticket Monster and WeMakePrice, have also joined the bandwagon with their own delivery services of fresh food supplied by its partners based in provincial regions. Industry watchers said the popularity of online grocery shopping will likely continue for some time, given strong consumer demand and the country’s fast-growing mobile sector.
South Korea’s online shopping transaction reached 18.2 trillion won in the first quarter, up 19.4 percent from a year ago, with the mobile shopping accounting for 58.6 percent of the total payments, according to government statistics.
Questions & Answers
Q.What is driving the increase in online grocery shopping in Korea?
What is driving the increase in online grocery shopping in Korea?
Robust demand for fresh food delivery services is a key factor, along with the rising number of one-person households and double-income families. Aggressive expansion by e-commerce companies and diverse fresh food supplies also contribute.
Q.How significant are mobile purchases in Korea's online grocery market?
How significant are mobile purchases in Korea's online grocery market?
Purchases made via mobile devices soared 56.7 percent year-on-year, reaching 1.55 trillion won in the first quarter. Food shopping took the largest portion of all mobile purchases at 14.5 percent.
Q.Which companies are prominent in the Korean online fresh food delivery market?
Which companies are prominent in the Korean online fresh food delivery market?
SK Planet, with its subsidiary Hello Nature, and Woowa Brothers, which runs Baemin Fresh, are active players. Other e-commerce sites like Ticket Monster and WeMakePrice have also entered the market.
Q.What proportion of Korea's population lives in one-person households?
What proportion of Korea's population lives in one-person households?
One-person households in Korea account for approximately 35 percent of the total population as of September 2016. This demographic tends to spend generously on delivered groceries.