SEOUL ― The competition among retailers in Korea to lower prices has intensified. Starting with eliminating distribution channels, retailers now produce private brand (PB) products to offer products at lowest prices. Large discount stores such as E-mart and Lotte Mart have started selling half-priced products since last year and are continuing to launch new products at half price.
The Dream View TV was launched by E-mart last year, selling out all 5,000 units within three days of the launch. Planned by E-mart and manufactured by Taiwanese company TPV, the Dream View TV is a full HD LED TV with a 32-inch screen. The price of KRW 499,000 was relatively cheaper than the average market price.
One of the online open markets in Korea, 11st, also sold Shocking TV, a 37-inch full HD LED TV on January 3. Within five minutes of the launch, all 500 TVs were sold out at the price of KRW 499,000. On January 6, E-mart resumed selling the Dream View TV offering a limited supply of 10,000 units, while 11st also offered 2,000 more 32-inch LED TVs on January 11.
Electronic stores also jumped into the half price marketing.
The electronic shopping mall JeonJa Land launched a half-priced laptop. Planned with Renova Korea, it began exclusively selling a limited offer of 1,500 of the new model G575-1230 at a price of KRW 469,000 on January 6. Customers can purchase this laptop at KRW 390,000 if using a JeonJa Land membership card. The plans of JeonJa Land is to start with selling the laptop at half price then develop more PB products such as TVs, desktop computers, and printers at half price. Refrigerators and washing machines will also be sold at half price in the future, JeonJa Land said.
Convenience stores also have conducted some half-price promotions. Family Mart once sold mobile cultural vouchers at half price through the social commerce website Ticket Monster.
Most of those retailers have sold various products at half price by reducing or skipping the middle distribution channels. Some retailers greatly reduced the price of products by flying over to a country that imports the products. This radically removed the bubbles in the price of imported goods.
For instance, the Brazil Cerrado Coffee available at E-mart was able to be sold at a lower price because E-mart directly visited Brazil to purchase coffee beans rather than buying them from importers, reducing the price of the coffee by 20%.
Consumers are participating in the offering of half-priced products with producers. A good example is half-priced beef, in which the price was lowered by removing distribution channels between cattle farmers and consumers. Consumers can directly purchase a cow and hand it to the slaughterhouse, and some cattle farmers run a restaurant along with a butcher's shop at the same time.
Wuri Boriso Anseong Corporation in Anseong, Gyeonggi-do (Gyeonggi Province) is composed of 30 cattle farmers. It runs a beef restaurant that has its own butcher shop. Its level 2 Korean beef is KRW 21,000 per 600g which is even cheaper than 600g of pork.
Meanwhile, the Korean government also started offering half-priced seafood from stock in order to prepare for the Korean New Year holiday. The government announced on January 5 that it will supply such seafood as frozen pollack, mackerel, yellow corvine, and squid at discounts up to 56%.
It will directly supply the seafood to retailers in order to reduce the distribution channels and provide consumers with products at a reasonable price. For example, a 47cm piece of pollack is sold at KRW 1,100 which is 56% cheaper than its average price in the market. Most of the seafood will be sold at major retailers including E-mart, Lotte Mart, Home plus, and GS Retail.
Other half-priced products currently available in Korea at discount stores include underwear, celadon, and honey. Despite the concerns for quality, the continuous launching of half-priced products is expected to help economic consumption, experts say.
Meanwhile, the Korean government also started offering half-priced seafood from stock in order to prepare for the Korean New Year holiday. The government announced on January 5 that it will supply such seafood as frozen pollack, mackerel, yellow corvine, and squid at discounts up to 56%.
It will directly supply the seafood to retailers in order to reduce the distribution channels and provide consumers with products at a reasonable price. For example, a 47cm piece of pollack is sold at KRW 1,100 which is 56% cheaper than its average price in the market. Most of the seafood will be sold at major retailers including E-mart, Lotte Mart, Home plus, and GS Retail.
Other half-priced products currently available in Korea at discount stores include underwear, celadon, and honey. Despite the concerns for quality, the continuous launching of half-priced products is expected to help economic consumption, experts say.
