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‘Living with COVID-19’ fuels rebound in consumption

Retail conglomerates’ record sales reflect consumers’ pent-up demand

(Yonhap)
(Yonhap)
After almost two years of staying at home, canceling holidays and skipping social gatherings, many South Korean consumers are slowly emerging from their cocoons to embark on post-pandemic shopping sprees -- ready to dress up, travel overseas and dine out again. 

Industry data on Tuesday showed that retail conglomerates raked in record-high sales from their latest sales events in October, fueled by shoppers’ pent-up demand and a recovery in consumer sentiment in anticipation of the “living with COVID-19” phase. 

From Monday, the government lifted nighttime curfews on bars and restaurants as well as eased gathering bans, as it starts a return to normal in three phases -- each slated to take four to six weeks. 

According to Shinsegae Group, the country’s largest retailer that owns 18 online and offline retail affiliates, sales reached some 860 billion won ($731 million) during its SSG Day event from Oct. 25 to 31, up by 35 percent compared to the previous year. 

Shinsegae’s fashion and lifestyle subsidiary, Shinsegae International, saw its on-year sales spike by 747 percent on Oct. 31 alone, setting a new daily and monthly sales record. 

While majority of the revenue came from online sales, offline sales at Shinsegae’s department stores and supermarket chain EMart also jumped despite the shopping festival having taken place before the easing of strict COVID-19 protocols.

Shinsegae Department’s sales for SSG Day event increased by 104 percent from last year. Women’s fashion and cosmetics recorded a 46 percent and 38 percent on-year sales increase respectively from Oct. 22 to 31, reflecting consumers’ hope to go unmasked and return to offices amid relaxed social distancing rules. 

Lotte Department also said its cosmetics and perfume sales went up by 13 percent from Oct. 1 to 14 compared to a year ago. 

EBay Korea, an online retailer that runs e-commerce platforms like GMarket, Auction and G9, said their annual discount promotion, Big Smile Day, recorded an accumulated sales volume of 2.8 million goods on the first day of the event, an equivalent to 33 items sold per second.

Another online shopping mall, Interpark, said with relaxed dine-in rules under the “living with COVID-19” policy, sales of buffet tickets at five-star hotels increased by 56 percent from July to September compared to a year ago.

Sales of plane tickets to European cities like Madrid and Zurich also skyrocketed by 625 percent and 275 percent, respectively, in September compared to the previous month, it added. 

A ministry-led nationwide shopping event, Korea Sale Festa, also kicked off Monday. This year’s run is the largest ever, with 2,053 companies offering big bargains on online and offline stores. The shopping event, the Korean equivalent of Black Friday sales in the US, runs through Nov. 15.

Industry insiders viewed that the shoppers’ latest spending spree will continue until the year’s end, as retailers go all-out in boosting private spending at their end-of-year sales. 

“Retailers have become a lot busier compared to this time of the year in the post-pandemic season, trying to come up with marketing ideas and promotion deals to lure shoppers and maximize consumer sentiment that froze for almost two years,” an industry insider told The Korea Herald. 

He said offline stores could resume makeup testing and sample tasting, which were suspended during the pandemic, to entice shoppers to open their wallets outside home. 

With South Korea slowly returning to a pre-pandemic mode, experts expect domestic demand that has been dented by the pandemic to snap back, raising hopes that the country would hit its 4.2 percent growth target for the year.

“The government’s ‘living with COVID-19’ strategy is expected to work as a catalyst for the economy to rebound in the fourth quarter, supported by consumer’s active spending, especially for restaurants and accommodation businesses,” said Park Jeong-soo, an economic professor at Sogang University. 

According to Bank of Korea data, South Korea’s private spending fell 0.3 percent in the third quarter compared to the previous quarter. Economic growth was stagnant from July to September despite strong exports, mainly due to weak private spending. 

By Kim Da-sol (ddd@heraldcorp.com)
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