The ’9,900 Won Shop’ opened by 11th Street on Sept. 20. (Photo: a screenshot of 11st website)
SEOUL, Dec. 11 (Korea Bizwire) – In a trend reflective of the times, e-commerce platforms in South Korea are increasingly becoming the main stage for cost-effective consumption, witnessing a rise in so-called ‘frugal spending.’ With soaring prices increasing consumer sensitivity to costs, there’s a notable surge in demand for products priced below 10,000 won.
One example is the ’9,900 Won Shop’ opened by 11th Street on September 20, which has shown remarkable sales performance, surpassing expectations. The store’s daily sales in October jumped by 80 percent compared to September, and in November, they skyrocketed by 196 percent. This growth is particularly striking when compared to the average sales increase of 10.2 percent in the online retail market from July to October, based on statistics from the Ministry of Trade, Industry and Energy.
The shop’s success lies in its offering of daily necessities priced under 10,000 won. The selection of recommended products in various price ranges like 3,900 won, 6,900 won, and 9,900 won, combined with benefits like free shipping, even on low-cost items, has been a significant draw for consumers seeking value for money.
A representative from 11th Street observed that sales of essential household and kitchen items have surged since the shop’s opening. They noted that the high inflation has been lowering the price range that provides psychological satisfaction to consumers.
TMON’s ’10,000 Won Happiness’ section, another initiative in this trend, also reported a 98 percent increase in sales compared to the same period last year. This section, too, specializes in offering a range of cost-effective products at varied price points.
The focus on value for money is reshaping consumer attitudes toward refurbished products—items returned due to minor defects or display in stores. TMON’s ‘Refurbished Market’ sales from January to November this year have increased by 80 percent, with a 66 percent increase in the number of transactions and a 63 percent rise in customer numbers.
Wemakeprice has also seen a significant surge in refurbished appliance sales in the second half of the year, increasing by 273 percent compared to last year.
Even fresh produce has succumbed to price sensitivity, evidenced by a 366 percent increase in sales of overripe produce during the same period.
The popularity of e-coupons or discount codes in e-commerce reflects this trend of frugal consumption. According to Statistics Korea, online shopping transactions in October reached a record high of 20.1 trillion won, the first time online shopping transactions have surpassed 20 trillion won since records began in 2001. The e-coupon transaction volume alone, which was 893.3 billion won, marked a 48.9 percent increase compared to the same month last year, significantly contributing to the overall online market growth.
At online portal Gmarket, sales of e-coupons offering discounts at convenience stores and cafes were more than twice as high as the same month last year. A Gmarket representative described this as a typical pattern of consumption during economic downturns.
Analysts expect this trend to continue for the foreseeable future. The Consumer Sentiment Index (CSI), released by the Bank of Korea, fell to 97.2 in November, down 0.9 points from October, marking the fourth consecutive decline since July (103.2). The CSI, a measure of consumer confidence, interprets scores above 100 as optimistic and below 100 as pessimistic.
Given this decline in consumer sentiment, industry experts predict a further strengthening of trends towards ‘pinpoint spending’ (buying only necessities) and frugal consumption, which involves searching for even slightly cheaper alternatives. An industry insider remarked, “Online platforms are becoming the core of thrifty consumption. The competition among e-commerce companies to offer the lowest prices is expected to become even fiercer.”
Ashley Song (ashley@koreabizwire.com)
