Summary
- Significant shift in South Korean consumer behavior post-pandemic.
- Decrease in duty-free shopping: rise of Health & Beauty (H&B) retailers like Olive Young.
- Changes in tourist shopping patterns: preference for street-level stores.
- Impact on stock market: notable performance of companies like CJ (001040:KS).
Shift in Korean Shoppers' Behavior
Analyzing Aicel Technologies' latest consumer transaction data reveals a substantial shift in shopper behavior in South Korea. The COVID-19 pandemic has significantly decreased the presence of dominant duty-free operators. Brands such as Olive Young have rapidly taken over their market share, indicating a notable change in Korean retail dynamics.
Changing Preferences Post-Pandemic
While international travel is increasing post-pandemic, Korean nationals have been slower to return to domestic duty-free stores. Instead, they favor H&B retailers like OliveYoung, which offer cost-effective and diverse products over luxury cosmetics. This shift is likely influenced by the current strong dollar, which affects the cost-efficiency of shopping at duty-free shops. Consequently, both Korean and international consumers are seeking better value for their money closer to home, reshaping the retail landscape and spending habits in South Korea.
New Norms for Tourist Shopping in South Korea
Interestingly, not only Koreans but also international visitors are adapting to the new normal. The shopping scene for tourists in Korea has undergone a significant change. The shift from group tours to individual travel has been remarkable, thanks to the convenience of finding travel advice on social media and video-sharing platforms. Chinese tourists, in particular, have moved away from the traditional 'Daigou' and 'Youkers' to independent 'Sankers,' creating a new trend. This new type of tourist often chooses to shop at popular road shops such as Olive Young, Daiso, and convenience stores, changing the traditional shopping experience at duty-free shops.
Impact on the Stock Market
This trend has had a noticeable impact on the stock market. Following the lifting of restrictions on Chinese tour groups, retail giants such as Hotel Shilla (008770:KS) and Shinsegae (004170:KS) initially experienced a surge in their stocks. However, as tourist shopping habits evolved, the market sentiment shifted. CJ (001040:KS), the company that owns OliveYoung, saw a significant increase in its stock price. In contrast, duty-free operators, who had previously benefited from group tourism, saw their stocks decline, indicating a sharp shift in market sentiment due to changing consumer patterns.
