Retail sales in South Korea experienced a significant growth of 5.7% in the first half of this year, thanks to the easing of Covid-19 restrictions and increased outdoor activities, according to the Ministry of Industry. The combined sales of 25 major offline and online retailers reached 85.4 trillion won ($66 billion) during the January-June period, compared to 80.8 trillion won the previous year.
This growth can be attributed to several factors, including a low base effect, as more people engaged in outdoor activities due to the stabilized Covid-19 situation. The South Korean government also played a vital role in boosting retail sales by lifting anti-virus restrictions this year. In March, mask mandates on public transportation were removed, followed by the removal of mandates for most indoor spaces, signaling a significant step towards returning to pre-pandemic normalcy.
During the first half of the year, offline retailers saw a 4.3% year-on-year increase in sales, totaling 4.29 trillion won. Demand for food products witnessed growth, while sales of electronics and housing items experienced a decline. Department stores recorded a 2.5% increase in sales, and discount chain stores like E-Mart and Lotte Mart saw a 1% year-on-year increase.
On the other hand, convenience stores had a remarkable sales growth of 9.5%, thanks to the strong demand for smaller food packages and everyday items. Smaller supermarkets also experienced a 2.2% year-on-year expansion in sales during the first half of the year.
Online platforms witnessed a substantial sales growth of 7.2% to reach 42.53 trillion won. Online shopping for food items, cosmetics, and other services has become increasingly common, contributing to this surge. Online platforms accounted for 49.8% of total sales in the first half, up from 49.1% the previous year.
In June alone, retail sales in South Korea increased by 6.6% compared to the same period last year. The growth was primarily driven by the low base effect, despite a recent slowdown in domestic demand. Offline retailers saw a growth of 4.2% in June, amounting to 7.02 trillion won in sales, while online platforms experienced a significant surge of 9.1% year-on-year, reaching 7.09 trillion won in sales.
Overall, the retail industry in South Korea has shown resilience and adaptability in the face of the Covid-19 pandemic. The easing of restrictions and people’s growing engagement in outdoor activities have contributed to the positive growth in retail sales. While the demand for certain products has declined, the overall sales numbers indicate a promising trend for the country’s retail sector.
