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Wine sales in S.Korea surge amid COVID-19 lockdown

Nov 25, 2020 (Gmt+09:00)


E-Mart's in-store specialty boutique WINE & LIQUOR

E-Mart Inc., one of South Korea’s largest retailers, saw its annual wine sales exceed 100 billion won ($90.3 million) for the first time as of November due to a rising number of people drinking wine at home. Wine, once considered a high-end beverage in Korea, is becoming a daily commodity.

As of Nov. 25, E-Mart sold around 110 billion won ($99.4 million) worth of wine this year, a substantial increase compared to last year's sales in the 90 billion won range. Also, its sales growth soared to 30.6% reaching a fresh high compared to the previous record of 16.4% in 2018.

Until now, only milk, pork, beer and instant ramen noodles have reached over 100 billion won in annual sales.

This was the same for domestic hypermarket giant Lotte Mart, which saw its wine sales rise by 49.1% between January and October compared to the same period last year.

Graphics by Jerry Lee

Convenience stores were not excluded from the wine surge. Leading convenience stores CU and GS25 saw their third-quarter cumulative wine sales jump by 59.7% and 27.6%, respectively, compared to the same period last year.

Another convenience store 7-Eleven also watched its wine sales climb by 49.7% between January and Nov. 24 of this year.

“It is encouraging to see that young adults in their 20s and 30s account for 35.1% of the customers,” said a Lotte Mart official. “We’ve set our wine sales growth rate at around 40% for next year as we expect the customer base to expand even more.”


A customer at a convenience store selects cheese to pair with wine

The shift in wine demographic is of note as young people in South Korea have traditionally turned to less-expensive beer or soju when out drinking with friends.

The surge in retail wine sales is also owing to prolonged distancing measures imposed by COVID-19, which has made drinking at home more common. Further, wine has become more accessible to the budget-conscious in Korea and even more popular with customers willing to pay more.

According to E-Mart, bottles of wine costing less than 10,000 won ($9) saw their sales increase by 27% compared to the year-earlier period, whereas mid- to low-priced wines around 30,000 to 50,000 won and premium wines over 1 million won ($904) boasted sales growth of 41% and 127%, respectively.

According to a wine importer, many customers who used to purchase wine mainly during business trips or overseas travel are now buying wine in Korea to drink at home due to restricted traveling measures.

OFFLINE CHANNELS BECOME CORE SELLERS 

Major distribution channels such as department stores, hypermarkets and convenience stores are becoming key wine sellers with competitive prices.

For example, hypermarket E-Mart sells around 50 international wines with lower price tags than the retail prices in their own countries.

Graphics by Jerry Lee


This trend is likely to speed up even more as offline retailers see this as a way to stand up to pandemic-friendly digital shopping platforms such as Coupang and Naver as selling alcohol online is prohibited.

E-Mart recently revamped its wine section into an exclusive in-store boutique called Wine & Liquor. Also, convenience stores are rushing to increase their wine offerings since customers can place an online or mobile app order for a bottle of wine and pick it up at the store.

"We began to offer mobile app service for users to place wine orders. In just five months, the number of users has increased sixfold," said an official at BGF Retail, the operator of CU convenience stores.

Write to Dong-hui Park at donghuip@hankyung.com

Danbee Lee edited this article.

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