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COVID-19 Reshapes South Korean Spending Habits, Industries Impacted

Photo by Geonhui Lee / Unsplash

A recent study by WiseApp/WiseRetail reveals how the COVID-19 pandemic has changed spending habits in South Korea, with several industries experiencing significant changes between 2019 and 2020.

The findings are based on transaction data from South Korean citizens' credit and debit card transactions and money transfers via bank accounts.

Beneficiary industries include food delivery, paid content, e-commerce, infomercials, cafes, and franchise bakeries.

Food delivery transactions jumped 74%, doubling in size since 2017 and reaching an estimated KRW 12 trillion (US$10 billion) in 2020, according to KOSTAT.

Paid content saw a 30% increase in transaction value, driven by social quarantine measures that increased spending on gaming items and video streaming services such as Netflix.

eCommerce transactions were up 23%, with IT giants like Naver entering the market and some items on Coupang selling out due to pandemic-related demand. Infomercial transactions were up 4%, with companies such as GS Homeshopping reporting a 27% increase in profits in the second quarter.

Cafes and franchise bakeries also experienced a modest 3% increase in transaction value compared to 2019.

Conversely, the pandemic significantly damaged industries such as duty-free, cinemas, airlines, travel, and department stores.

Duty-free transactions were down 74%, and the number of flights was down 94% compared to pre-pandemic levels.

Cinematic transactions were down 73%, with total admissions down 70.3% as social quarantine measures took effect and blockbusters such as the 007 series were postponed.

Airline transactions were down 68%, but Korean Air surprised the upside by shifting its business focus to cargo transportation.

Travel transactions fell 62%, but local online travel agency (OTA) startups in South Korea either maintained or grew their revenues during the pandemic.

Finally, department store, supermarket, and hypermarket transactions fell 12% as COVID-19 accelerated the shift to e-commerce channels.