Grocery shopping (Image courtesy of Yonhap)
SEOUL, Jan. 8 (Korea Bizwire) — The Korea Chamber of Commerce and Industry (KCCI) unveiled its 2025 Retail Industry White Paper on January 7, identifying “S.N.A.K.E”—Survival, Next, AI, K-Culture, and Economical Consumption—as the year’s key consumer market trends.
Survival in a Stagnant Market
With global economic challenges and stagnating consumer markets, competition for limited spending is expected to intensify. Retail market growth rates, which peaked at 7.5% in 2021, fell to 0.8% in 2024 and are projected to decline further to just 0.4% in 2025 due to uncertainties in U.S. trade policies and domestic political instability.
Next-Generation Business Models
To stay competitive, retailers are focusing on innovative business models, including retail media ventures leveraging online and offline platforms, and hyper-personalized shopping experiences like consumer-to-consumer (C2C) transactions.
AI-Driven Efficiency
Artificial intelligence is becoming a critical tool for cost optimization and operational efficiency. The global AI market in the retail sector is forecast to grow from $9.97 billion in 2023 to $54.92 billion by 2033, according to market research firm Persistence Research.
K-Culture Integration
Retailers are increasingly merging commerce with Korean culture to attract global consumers. Health and beauty retailer Olive Young, for instance, has become a must-visit shopping destination for foreign visitors, leveraging K-content to boost international sales.
Economical Consumption
With economic slowdown and rising uncertainties, value-driven consumption is gaining momentum. Consumers are increasingly adopting a “You Only Need One” (YONO) approach, focusing on essential purchases while avoiding unnecessary spending.
The KCCI emphasized the need for businesses to innovate amid growing challenges. “Survival in this competitive landscape requires next-generation business models and new revenue streams. Companies should seek growth opportunities in AI and K-Culture while adapting to price-conscious consumption trends,” the report advised.
These trends underscore the dynamic and evolving nature of South Korea’s consumer market in 2025, as retailers navigate challenges with a focus on innovation and cultural synergy.
Ashley Song (ashley@koreabizwire.com)
