While the threat of the pandemic remained relevant in South Korea in 2021, a gradual relaxing of restrictions meant that many educational institutions and employees returned to normal operations as the country’s vaccination programme continued to be rolled out. The recovery of consumer footfall, although not returning to 2019 levels, helped support the partial recovery of value sales through vending.
In 2020 and 2021, snack vending was identified as a category that experienced the steepest fluctuation in demand. While the use of public transportation and remote classes and work significantly reduced impulse purchases of on-the-go snacks during the pandemic, convenience stores and e-commerce gained share in B2C distribution channels for these products.
In South Korea, global ice cream brand Häagen-Dazs gained share of ice cream and frozen desserts in 2021, benefiting from the increase in home consumption of premium desserts during the pandemic. However, Häagen-Dazs has not only expanded its presence in modern grocery retailers but has also moved into vending.
The Minimum Wage Commission announced that South Korea’s minimum wage in 2022 is set at KRW9,160, which amounts to a 42% increase from 2017’s rate. Fast-rising labour costs and enhanced digital device literacy amongst South Koreans across all generations have played key roles in improving the trajectory of vending, encouraging retailers to consider the channel as an alternative to offline stores.
In South Korea, the distribution of alcoholic drinks has been strictly limited to store-based retailing where sales assistants can check ID cards to prevent underage drinking. However, from 2021, under the revised regulation approved by government bodies, selling alcoholic drinks through vending machines became legal with a condition that machines must be installed by restaurants or retail stores in order to ensure compliance.
While vending machines had discouraged greater uptake amongst some consumers over the past decade due to their narrow offer, mostly limited to snacks, drinks, and personal hygiene items, retailers are exploring the potential offered by extending product lines, as new players enter the channel. Xperon Co Ltd, a golf equipment manufacturer, installed 1,000 vending machines in various locations including restaurants near country clubs, cinemas and hypermarkets.
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Vending means automatic retailing. It covers the sale of products and services at an unattended point of sale through a machine operated by introducing coins, bank notes, payment cards, tokens or other means of cashless payment. Sales figures cover vended products only, ie food, drink and other consumable goods such as vended tobacco, sanitary products and condoms. Services such as the public telephone, laundrette facilities, travel tickets, stamps, passport photographs, domestic energy supplies and business card creation are excluded. Coverage includes vending systems installed in public and semi-captive environments only. Hotels, transport networks, recreational centres, shopping centres/malls are included. Factories, offices, hospitals, prisons, schools and other captive environments are excluded.See All of Our Definitions
This report originates from Passport, our Vending research and analysis database.
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