Traditional Holidays, Deepening Polarization, and Consumption Trends.

As we navigate through the COVID-19 pandemic, more and more people are opting for simpler celebrations of traditional holidays like Chuseok (Korean Thanksgiving) and are refraining from traveling to their hometowns. This Chuseok, in particular, offers an extended break of up to 12 days for those who take personal leave, leading to a surge in plans for overseas travel. Meanwhile, the trend of conveying sentiments through gift sets to family and acquaintances is rapidly gaining popularity.

 

The post-pandemic consumption trends and the polarization between consumer channels are becoming increasingly evident.

 

According to the retail industry on September 22, both department stores and supermarkets are currently offering a wide range of gift sets, including premium sets such as eco-friendly Hanwoo beef and wine, as well as practical sets featuring items like apples and pears. Sales have increased by as much as 35% compared to the previous year. In contrast, traditional markets are struggling, with sales remaining significantly lower even when compared to the COVID-19 period. Due to poor crop yields and soaring prices, they are receiving less attention from customers.

 

In fact, major department stores were bustling with customers looking to purchase Chuseok gift sets early in the morning. Sales of gift sets at Lotte, Shinsegae, and Hyundai department stores, based on data from the start of the reservation sales period until September 19, have all shown significant growth. Lotte saw a 15% increase, Shinsegae 35%, and Hyundai 33%. The increase in the gift value limit due to the Kim Young-ran Act, from 200,000 KRW to 300,000 KRW, has contributed to this rise in sales.

 

Luxury products with price tags in the millions of KRW are selling out one after another. Scotland's 40-year-old Balmore whiskey, priced at 27 million KRW, and Krug champagne, priced at 16 million KRW, both offered by Shinsegae, sold out as soon as Chuseok gift set sales began. Hyundai's "Hyundai Premium Hanwoo No.9" set, made from 1++ (9) grade beef, which is among the top 0.5% of all Korean beef, sold dozens of sets despite its high price of 3 million KRW. Lotte's 4 million KRW "Luxury Youngkwang Bobsungpo Gulbi GIFT Won" set also sold out. "Filial duty appliances," which cost tens of thousands to millions of KRW, including dishwashers, robot vacuum cleaners, massage chairs, and food processors, are also popular choices.

 

Large supermarkets are also witnessing strong sales of Chuseok gifts. This year, E-Mart's Chuseok gift sets recorded a 14% increase in sales, and Lotte Mart's sales increased by more than 20%. E-Mart's results were particularly boosted by gift sets priced in the 100,000 KRW range, which saw a 111% increase in sales compared to the previous year.

 

In contrast to department stores and large supermarkets that have recovered to pre-COVID-19 sales levels, traditional markets are facing tough times. Traders report that their perceived sales have plummeted to about half the level of the previous year due to economic stagnation. The polarization of consumer channels is becoming more pronounced. Although there were quite a few people in Namdaemun Market in Jung-gu, Seoul, on this day, the merchants wore somber expressions. Yang Sun-sil, who sells seafood at this market, commented, "Traditional market customers are more affected by economic downturns. They don't open their wallets just because it's a holiday," and added, "In the past, people used to buy 30,000 KRW or 50,000 KRW worth of topshell, but now they only buy 10,000 KRW worth."

 

Experts believe that the polarization of consumer channels is a structural change, and especially after the pandemic, the decline of traditional markets has accelerated. Lee Eun-hee, a professor of consumer science at Inha University, stated, "Traditional markets are classified as low to mid-priced markets, but now even those in their 50s and 60s tend to use marts or e-commerce when buying low to mid-priced gifts," and added, "After COVID-19, more people are skipping traditional markets, and the number of people visiting them has decreased significantly."

 

According to Gmarket, sales of convenient Chuseok items such as fruits, tteok (rice cakes), and jeon (pan-fried dishes) have increased by 14% compared to the same period last year. Ready-to-eat rice and cupbap (rice in a cup) sales have increased by 46%, while convenience foods like tteok galbi (grilled short rib patties) and dak galbi (spicy stir-fried chicken) have seen a 15% increase in sales. This indicates a significant rise in sales of food items that can be easily consumed at home during the holiday period when many people are choosing to stay in. The trend is reflective of the growing number of individuals spending the holiday alone.

 

The post-pandemic consumption trends and the polarization between consumer channels are becoming increasingly evident.