Food and Drink E-Commerce in South Korea

2020 IMPACT

Online grocery orders record significant growth amid COVID-19

Food and drink e-commerce has registered double-digit growth in South Korea during the past years and its performance gained further strong momentum in 2020. When COVID-19 first hit the country in February, consumers stockpiled food and drink products to prepare for a potential lockdown and online orders increased, resulting leading e-commerce players to reach the maximum delivery capacity in March.

Food and drink e-commerce sees an influx of middle-aged consumers

Middle-aged consumers who traditionally shopped for grocery items in physical stores emerged as one of major consumer groups in the e-commerce channel. Since their longstanding belief that shopping in offline stores is the most convenient gave way to the price benefit and fast delivery of e-commerce, a large portion of the new consumers is expected to stay loyal to online grocery shopping malls in the short term.

Naver unveils online grocery shopping service in partnership with supermarkets

Naver Corp entered the well-established market of food and drink e-commerce in 2020 by launching an online grocery shopping service called Jangbogi. The service allows consumers to place orders for household essentials from Naver’s online shopping platform and delivers orders from nearby supermarket outlets of retail partners such as Homeplus, GS The Fresh and Hanaro Mart.

RECOVERY AND OPPORTUNITIES

Food and drink sustain growth of total e-commerce

Food and drink has played an important role in the strong growth of the e-commerce channel during the past years. Given their staple nature, grocery products do not fluctuate much depending on economic situation, which is an attractive aspect for e-commerce players who are suffering from fierce price competition on high-margin products such as apparel.

Eco-friendly packaging for grocery delivery as concern about packaging waste intensifies

Traditionally, cold ice packs filled with chemical matters and styrofoam boxes were commonly used as packaging of grocery products to maintain the freshness of products during delivery. However, as concern about packaging waste intensifies, major players have started to invest in providing eco-friendly packaging for deliveries.

E-commerce becomes a growing channel for premium grocery shopping

As consumers become more cautious about visiting foodservice outlets due to COVID-19, retailers have been introducing premium grocery products that can be an alternative of eating out on special occasions or for family gatherings. CJ Cheljedang Corp, a leading packaged food manufacturer in South Korea, enjoyed hyper growth in its meal kits business in 2020.