SEOUL, July 2 (Korea Bizwire) — South Korea’s major food companies are expanding direct sales through their own online shopping portals instead of using large discount stores or e-commerce platforms.
CJ Cheiljedang Corp., the country’s leading processed foods maker, has been engaged in aggressive marketing, greatly expanding the scope of discount events since it upgraded its online mall CJ On Mart to CJ The Market in July 2019.
On the back of such aggressive marketing efforts, the company saw membership at its online mall mark an almost threefold increase from 700,000 in August 2019 to 2 million in July 2020.
Sales also registered a robust year to year growth of 34 percent during the first five months of this year.
Hy, another food and beverage company formerly known as Korea Yakult Co., upgraded its online mall Hy Fresh into Fredit, which sells not only Hy products but also other eco-friendly daily necessities and organic health food from other companies.
Fredit saw its registered members jump in number from 380,000 in 2019 to 680,000 in 2020, with the number of online orders rising from 980,000 to 1.5 million during the same period.
The primary reason why food companies have been strengthening their own online mall business is that consumer demand for online purchases has increased since the outbreak of the coronavirus.
The increase in the number of the customers using such online malls means that brands are seeing a growing number of customers with strong loyalty.
Furthermore, their profits also can increase since they don’t have to pay fees to other distribution channels.
“By selling products directly through their own malls, food companies can also acquire a variety of information on their customers and such information can be used for product development and marketing,” an industry official said.
J. S. Shin (email@example.com)