The total amount of GDP is around 1.5 Trillion dollars in 2017 by IMF. It is the 11 or 12 biggest country in the world. We have not finished this year yet, but likely our country growth rate will be 2.5% this year. And, Moody’s forecast Y2019 will be even lower at 2.3%.
Economist says our importing is supporting the growth rate. The domestic growth rate is around 0.1% growth rate.
In terms of retail and size of the retail industry is about 440 billion USD in 2017. While offline stores or market stay stagnant, online channel has grown. It is because offline champions are driving more to expand their business online. There were two times price wars over two years in 2016 and 2017.
Those using hypermarket as main shopping channel don’t spend as much as they used to
While Online main channel shoppers spend 25% more compared to Y2016.
Of course, I have to be careful to read this data since it is a survey data. However, it looks like significant enough and at least I can tell online main channel users spend more than hypermarket main users on grocery shopping.
To sum up,
The domestic economy is not good. Without exporting economy, we are close to deflation.
The major chunk of shopper still uses offline stores as their main grocery channel.
However, online transaction keeps growing in the overall industry. In particular, it is significantly growing in grocery food area.
What is driving the changes?
As of 2015, Over 40% of households are working couple among the married household .
It has continually increased from Y2010.
1 person family is over 27% among the total household.
Korea’s population is 50 million and half of them live in the metro area.
As of 2017, 85% population uses a smartphone.
What is like to be in Y2019?
1. Stable growth of processed food consumption
2. Role change of offline stores as advertising space
3. Packaging evolution
4. Large scale of M&A between online and offline