Baby Food in South Korea

PROSPECTS

Imported premium brands are actively introduced

Premiumisation is an ongoing trend within baby food, but consumers’ preferences are rapidly moving to imported brands. There are two solid domestic players in baby food and they have diverse price platforms within milk formula.

Negative performance expected by milk formula due to a significantly lower birth rate

Although new premium products were introduced, the number of babies continued to decrease significantly towards the end of the review period. The number of newborn babies from January to May declined from 1,926,000 in 2015 to 1,453,000 in 2018.

The power of internet retailing within South Korean baby food

Baby food in South Korea is mainly distributed through internet retailing, followed by hypermarkets. Although there is rarely a price benefit when buying online, which is due to the government’s policy of not allowing promotions for standard milk formula and a ban on advertisements declaring discounts, parents in South Korea prefer purchasing baby products such as milk formula and nappies via internet retailing, as the channel offers a convenient home delivery service.

COMPETITIVE LANDSCAPE

New players within baby food will drive intensive competition and existing players will focus on developing new categories

The three leading players in baby food all lost value share in 2018 and are set to lose further share over the forecast period. Although overall baby food sales are set to decline due to a falling birth rate, new products will continue to be introduced by players.

New developments expected

As long as baby food sales do not increase, players will compete to acquire a greater share of a reducing pie, and as a result, leading domestic players will focus on other categories within baby food by developing new baby food products such as baby noodles, baby sauces, baby juices and baby snacks. New product developments help support the value performance of baby food.

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