Summary
- Key Players: Daiso, Temu (PDD:US), AliExpress (BABA:US), and SHEIN are experiencing a surge in popularity in South Korea.
- Market Trend: Rising living costs have led consumers to seek more budget-friendly shopping options.
- Growth: Daiso has seen a 20% year-on-year growth in consumer transactions, surpassing 3 trillion won in revenue for the first time.
- The trend highlights a shift in consumer behavior towards more affordable products and services.
Introduction
As living costs continue to rise in South Korea, consumers are increasingly turning to budget-friendly retailers and e-commerce platforms. Companies like Daiso, Temu (PDD:US), AliExpress (BABA:US), and SHEIN are capitalizing on this shift, offering affordable alternatives to traditional retail. This article explores the growing popularity of these budget-friendly giants, using insights from Aicel Technologies’ consumer transaction data.
Struggling Consumer Sentiment Amidst Rising Living Costs
Despite South Korea’s recent strong export performance, consumers are grappling with the impact of rising living costs. Persistent high prices and unfavorable exchange rates have resulted in a decline in disposable income. Consequently, South Korean consumers are prioritizing lower-priced goods, seeking value for money in their purchases.
Daiso’s Growth Mirroring the Shift in Consumer Behavior
Expanding Market Presence
Asung Daiso, operating nearly 1,500 stores across South Korea, has become synonymous with affordable shopping. Offering a diverse range of products from household items to food, with most items priced around 1,000 won (approximately $0.75), Daiso’s business model resonates well with cost-conscious consumers. For the first time, Daiso’s revenue has surpassed 3 trillion won, marking a significant milestone.
Transaction Growth
According to Aicel Technologies, Daiso has seen approximately 20% growth in consumer transaction volume in 2023. The data further indicates that this trend is set to continue, with monthly transaction volumes growing at nearly 20% year-on-year, projecting sustained growth into 2024.
Rising Popularity of Low-Cost Chinese e-Commerce
AliExpress, Temu, and SHEIN
The surge in popularity of Chinese e-commerce platforms such as AliExpress (BABA:US), Temu (PDD:US), and SHEIN highlights the broader trend towards budget-friendly shopping. These platforms offer a wide array of products at competitive prices, appealing to South Korean consumers looking for affordable options.
Consumer Behavior Shifts
Aicel’s consumer transaction data reveals a notable increase in the frequency and volume of purchases from these platforms. This shift underscores a broader change in consumer behavior, driven by economic pressures and the availability of low-cost alternatives.
Conclusion
The growing popularity of budget-friendly retailers and e-commerce platforms in South Korea reflects significant shifts in consumer behavior. As living costs continue to rise, consumers are increasingly seeking out affordable shopping options, leading to the success of companies like Daiso, Temu, AliExpress, and SHEIN. Insights from Aicel Technologies’ data will be crucial in understanding and responding to these evolving market dynamics.
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