Tag: Korea

South Korea’s retail sales rebounded in February
Sales at South Korea’s top department stores rebounded sharply in February from the previous month, government estimates showed on Tuesday, reflecting this year’s change of timing for the Lunar New Year holiday.

Combined sales last month at department stores run by Hyundai Department Store, Lotte Shopping and Shinsegae Co rose 7.1 percent from a year ago, the finance ministry said.

This was the fastest gain for department store sales since a 10.5 percent rise seen in August last year and compared to a 11.0 percent drop in January, which was the steepest contraction on record.

Retail numbers are usually distorted at the beginning of the year as the Lunar New Year holiday, when consumers tend to splurge, can fall either in January or February. This year the holiday was in February while it was in January last year.

Sales at the country’s top discount stores also showed a sharp gain in February, jumping 30.5 percent on-year and bouncing back from a 18.3 percent drop in January.

The January decline was the sharpest fall seen since February 2014.

Meanwhile, the same data showed annual sales of locally produced automobiles last month slipped 3.8 percent, undermining a 3.9 percent gain in January.

Gasoline sales by volume last month rose 12.5 percent in annual terms, rising for a third straight month and picking up the pace from a 5.3 percent rise in January the finance ministry data showed.
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March 31, 2022
Diptyque unveils its largest flagship yet, in South Korea
Diptyque’s new flagship store in Seoul is its largest yet, anywhere in the world, reflecting its confidence in the South Korean perfume market which is showing rapid growth. Located in the upscale shopping street Garorugil, the Diptyque flagship’s design was inspired by the French brand’s original space on 34th Avenue Saint-Germain in Paris, resembling a cozy apartment with a dining room, kitchen, living room and bathroom. The ground floor houses Diptyque’s full collection of

The ground floor houses Diptyque’s full collection of perfumes and home fragrances, including limited editions and boutique-exclusive products. The 260sqm store offers customization services such as engraving, perfume message ribbon, embossing, and candle message capsules.

A large marble staircase leads to the upper floor, which was designed with a layout of an up-market Paris apartment. While the cozy living room is decorated with a counter “reminiscent of a herbalist”, the kitchen is inspired by the one in the “magnificent private residence of Moise de Camondo” built in the 18th-century style, a space for olfactory experiments and workshop.

The living room is a space where customers can rest and see artwork and decoration items that pay a tribute to the craftsmanship of Korea. The bathroom features a black and white checkered tiled floor and a large retro-styled bathtub. The room is highlighted with traditional Korean pottery.

Diptyque said it has seen double-digit sales growth in South Korea annually since Shinsegae International secured the domestic sales rights in 2017. According to Euromonitor, South Korea’s perfume market reached US$491.6 million in 2019 and is expected to exceed $532 million next year.
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March 24, 2022
Korea Seven’s takeover of rival Ministop cleared by regulator

South Korea’s antitrust regulator said Tuesday it has decided to approve a deal by Korea Seven Co., the operator of 7-Eleven convenience stores, to buy its smaller rival Ministop Korea Co.

In January, the country’s retail giant Lotte inked a deal to acquire a 100 percent stake in Ministop Korea for 313.3 billion won (US$257 million). Korea Seven, an affiliate of Lotte, eventually bought Ministop Korea.

The Fair Trade Commission (FTC) said it has given the green light to the deal, saying that the takeover is not expected to hamper market competition.

South Korea’s convenience store market has been dominated by BGF Retail’s CU and GS Group’s GS25, with 7-Eleven, Shinsegae Group’s Emart 24 and Ministop being minor players.

The FTC said its approval is expected to spur three-way competition in the market as the takeover will help Korea Seven cement its market status as the No. 3 player.

Korea Seven operates around 11,170 convenience stores across the country.

Ministop is an affiliate of the Japanese retail group Aeon Group and opened its Korean operation in 1990 via a business tie-up with South Korea’s leading food maker Daesang. Ministop Korea runs around 2,600 convenience stores.

March 23, 2022
Lotte Group acquires Ministop South Korea
South Korea’s Lotte Group has agreed to acquire a 100% stake in Ministop Korea for 313.4 billion won ($263 million), the country’s fifth-largest convenience store chain, from Japan’s Aeon Co., Lotte said on Jan. 21.

With the purchase in cash, Lotte’s convenience store operator 7-Eleven will be able to take on the two sector leaders — CJ Group’s CU and GS Group’s GS 25, while further widening the gap with fourth-ranked Shinsegae’s E-Mart 24.

“Competition is heating up in the quick commerce market for short-distance services, based on convenience stores,” said an official of the group’s holding company Lotte Corp.

“We are now adding Ministop Korea’s 2,600 stores and 12 logistics centers to the list of our stores, which will expand our points of customer contact in the near term.”

Lotte’s 7-Eleven runs 10,500 outlets nationwide. By comparison, CU boasts 14,900 stores, trailed by second-ranked GS 25 with 14,600 stores.
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January 24, 2022
Apple gives in to Korea’s law and allows outside payments to developers

The first of its kind, a law preventing app market operators—the likes of Apple and Google—from necessitating app developers to use specific payment systems were imposed by Korea’s National Assembly in September 2021. Today, on January 11, 2022, Apple has agreed to the regulation and will allow payment systems different from its own in the App Store.

Apple did not say the exact fee it will be charging app developers for using an outside payment system, but it did say it will be lower than that for its own, which is 30 percent. The exact commission rate for outside payments and the date on which it will be implemented will be determined after discussions with Korea’s ICT regulator are finished, said the tech giant.

Google agreed to the new regulation a bit earlier, back on December 18. It charges 26 percent for outside payments. It’s expected that Apple will decide on a similar percentage as well.

While this might seem like a huge win for app developers, and it is a win, some industry officials are concerned about whether there will be any substantial effects. One such official said that, in actuality, it is much easier and more convenient for developers to use the payment systems that Apple or Google offer, for example, than to do that with outside ones.

A good example of that is the payment system of Korea’s own One Store market operator. Even though it charges only 5 percent commission for using outside payment methods and 20 percent for its in-house one, developers choose to use the latter.

The regulation, therefore, does not help app developers at all. It will only end up burdening app users because app developers will reflect commissions charged for payment systems at the prices of their apps. But this is the furthest a government can regulate, given that most countries operate under a capitalist system.

No matter how effective things turn out to be, the successful implementation of the regulation itself is enough of a big step on its own. It is the first domino to be pushed and could likely be the one to set a chain reaction across other countries that will try and achieve the same goal in their way.

January 12, 2022

Starbucks store in Korea is dedicated to disability inclusion

Starbucks Korea has added a new location to its chain of Community Stores in the country, reaffirming its commitment to diversity, equity and inclusion.

The store is Starbucks Korea’s first to focus on a design that creates an inclusive space and what the retailer describes as impactful programming to support members of the disability community in Seoul.

A portion of proceeds from sales through the store will go to support the local nonprofit Heart Heart Foundation, which advocates for inclusion and awareness of people with disabilities, and support for local artists from the disabled community.

“It is very meaningful that our store, which is an inclusive space for all, has been dedicated as a new Community Store for inclusion, furthering disability-inclusion awareness in Korea,” said Elena, assistant store manager, who is hard of hearing.

“I feel very proud as a partner. I hope to create meaningful opportunities to build connections through the many activities we will be launching at our store.”

Since the opening of the store, Starbucks has employed new partners with disabilities under the partnership with the Korea Employment Promotion Agency for the Disabled.

December 21, 2021

Flash Coffee opens Outlets in South Korea

Flash Coffee has launched its first two South Korea stores in Seoul’s Gangnam district as part of its expansion in Asia, with two more stores scheduled to open before the year ends.

The launch marks the brand’s sixth market in the region, after Singapore, Indonesia, Thailand, Hong Kong, and Taiwan. Spanning two stories, the new Flash Coffee flagship store is located at Sinsa, while the other store is opened in Yeoksam.

“South Korea is filled with coffee enthusiasts and our coffee consumption rate ranks within the top 10 in the world,” said Un Koh, MD of Flash Coffee South Korea.

“We are confident that our high-quality beverages crafted by award-winning baristas at Flash Coffee will appeal to South Korean coffee lovers.

“Our goal is to make our specialty coffee accessible to all, so for those who’ve not come across Flash Coffee yet, you will find us brewing very soon in a location near you.”

The two new stores opening later this year will be located in Apgujeong and Yangjae. After South Korea, Flash Coffee aims to set foot into Japan with its first store in Tokyo., having recently appointed Shu Matsuo Post as its MD in Japan.

Flash Coffee currently operates more than 200 locations across Asia.

December 1, 2021

7-Eleven introduces autonomous delivery robot in Seoul

Korea Seven, which operates 7-Eleven stores in South Korea, has partnered with Neubility, a South Korean autonomous robot startup, to commercialize autonomous robots for short-range delivery.

Most large convenience store chains in South Korea offer delivery to customers via third-party food delivery apps. For example, the popular Yogiyo food delivery app delivers groceries and other products from CU and GS25 chains. Typically, third-party delivery services receive about $3.51 per delivery.

The domestic food-delivery services market hit $19.8 billion last year, according to the South Korean Fair Trade Commission.

Korea Seven’s agreement with Neubility calls for it to commercialize the autonomous robot Neubie in Seoul and surrounding areas by the end of this year. Neubie robots can navigate deliveries in urban areas in any weather conditions.

However, it can be difficult for these robots to operate in the Gangnam district because the numerous skyscrapers could block the satellite signals needed for the robot’s GPS system. To overcome this, Neubie robots have cameras and sensors in addition to GPS, so they are more adaptable for those areas.

“The two companies will cooperate to build a model for [a] next-generation delivery service that brings convenience to store management as well as increased profits,” said Choi Kyung-ho, CEO of 7-Eleven in South Korea.

Elsewhere in Asia, 7-Eleven Japan this week announced plans to launch national delivery services by 2026. The country’s top c-store chain will mobilize its national network for last-mile delivery to take on Amazon.

November 25, 2021

South Korean retailer CJ Olive Young to raise US$1 billion in local IPO

South Korean health and beauty chain CJ Olive Young is looking to raise around US$1 billion in an initial public offering, as the company seeks to tap a booming market for new listings.

The listing, which two sources aware of the matter say is set to take place early next year, comes as Korean IPOs have raised $21.4 billion so far this year, almost seven times the amount raised a year earlier, according to Refinitiv data.

CJ Olive Young has appointed Mirae Asset Securities and Morgan Stanley as the main underwriters on the transaction while KB Securities and Credit Suisse will act as co-underwriters, a spokesperson told Reuters.

A $1 billion fundraising, slated for early next year, would be double the amount the company was expected to raise, according to some bankers.

Mirae Asset Securities, Credit Suisse and Morgan Stanley declined to comment to Reuters. KB Securities did not immediately respond to a request for comment.

CJ Olive Young has about 1200 stores across South Korea, and delivers its products through a global distribution platform to 150 countries, according to its website.

It reported an operating profit of $84.4 million last year, the company’s filing showed. The largest shareholder is CJ Corp with a 55.24-per-cent stake as of December.

So far this year, 92 companies have listed in Korea compared with 59 last year, driven by robust retail demand, Refinitiv data shows.

E-commerce firm Coupang Inc raised $4.5 billion when it was listed in New York in March, while video-game developer Krafton Inc raised $3.7 billion in its July listing in Seoul.

November 23, 2021

Korean lawmaker says Apple and Google need to do more to comply with new law

Apple and Google are both failing to fully comply with South Korean legislation that prevents app store operators from forcing developers to use their own payment platforms. As you already know, Apple and Google, with the App Store and Play Store respectively, forced developers to route all in-app payments through their own systems to collect as much as a 30% slice of in-app payments.

When legislation in South Korea passed, it became the first country to pass a law in an attempt to block the tech giants from imposing this “tax” on developers. An official at the Korea Communications Commission (KCC) said that tomorrow (Wednesday), South Korea will reveal what changes tech firms will need to follow in order to comply with the legislation.

Korean lawmaker Jo Seoung-lae is the person who directed an amendment to the Telecommunication Business Act in August in an attempt to prevent Apple and Google from taking a cut of in-app payments. While the law went into effect in September, the Korea Communications Commission (KCC) still has to announce what tech firms have to do to be considered in compliance with the law.

Google said that it would allow third-party payment processing systems to run Play Store charges in South Korea. But the Alphabet subsidiary also said that it would reduce the cut that it takes by four percentage points when such a platform is used instead. Apple told the South Korean government that it was already complying with the law and that no changes had to be made.

Jo, the South Korean lawmaker who helped get the legislation passed, said, “Frankly, we are not satisfied… Apple’s claim that it’s already complying is nonsensical. Excessive fees take away developers’ chances for innovation … parliament is to be closely informed as the government drafts detailed regulations to make sure there is accountability.”

Epic Games CEO Tim Sweeney, who dared to take on Apple and Google by including a link to Epic’s own payment system inside the app for its popular Fortnite game, is a vocal critic of both tech firms. Fortnite ended up getting kicked out of both the App Store and the Google Play Store. The executive said, “This is the first legislation worldwide with the chance to transform the market from a duopoly with Apple and Google.

But Sweeney won’t be pleased just being able to promote third-party payment platforms in the App Store and Google Play Store. He wants Apple and Google blocked from charging any fees to developers promoting third-party payment platforms. This is what Google is doing in South Korea and “ruins the point of competition,” the CEO says.

The KCC is preparing the details of an ordinance that will be reported to a parliamentary committee tomorrow according to KCC Vice-Chairman Kim Hyun. At this stage though, it is not clear what penalties tech firms like Apple and Google will face if they do not follow the law. An early draft called for a penalty of up to “2% of revenue” for app store operators who fail to abide by the law.

But that penalty is certainly not clear. Is it based on global revenue, in-country revenue, or app store revenue? The wording here can be the difference between a stiff but affordable fine, and a hefty payment that actually takes a bite out of a company’s financials. Still, no matter what the fine is based on, Apple and Google are big enough that any fine won’t feel like anything more than a mosquito bite.

That is the point of Meghan DiMuzio, executive director of advisory group Coalition for App Fairness who says, “We’ve seen in other jurisdictions that these monetary penalties actually don’t deter companies like Apple and Google because to them, it’s a drop in the bucket.”

November 17, 2021

China and South Korea boost Burberry sales

Double-digit sales growth in China, South Korea, and the Americas underpinned a 37-per-cent lift in first-half sales for luxury fashion group Burberry to US$1.63 billion.

The lift reflected a recovery in-store sales as Covid-related lockdowns and trading restrictions eased in the six months to September 25, compared with the same period a year earlier when a swathe of stores was closed across key markets.

“We have made strong progress in the half,” said Burberry chair Gerry Murphy in a statement.

“Full-price sales are growing at a double-digit percentage, driving margin expansion and strong free cash generation. We are seeing an acceleration in performance in countries less impacted by travel restrictions and we remain confident of achieving our medium-term goals.”

The company reported an adjusted operating profit of $263 million, up 16.2 percent year on year.

While the Americas, Korea, and China buoyed sales, the company said other regions continued to be impacted by reduced tourist levels.

The company said its new store format – of which 15 are now complete with a target of 50 by the end of next March – was drawing higher-spending customers through the doors. Online sales were performing well with sales of goods at a full price almost doubling year on year.

During the six months, Burberry announced its CEO Marco Gobbetti was to stand down early next year, to be replaced by Jonathan Akeroyd in April.

Murphy paid tribute to Gobbetti’s “vision and leadership” during Burberry’s transformation and said the board expects Akeroyd will build on the strong foundations to accelerate growth and deliver further value for shareholders.

November 16, 2021

Blockchain game development booms as Vietnamese gamers make their play

Vietnamese companies are racing to develop blockchain games and mobilize millions of dollars from foreign investors as they seek to make their place in the new industry.

After the monster-combat game Axie Infinity became the most valuable non-fungible token (NFT) game in the world this year, at least six more games developed by Vietnamese companies have been launched.

Sipher, a multiplayer online battle arena game, recently raised $6.8 million from investors in the U.S. and South Korea.

Faraland, a multiplayer role-playing game, had earlier received $2.4 million from investors, while another game, HeroVerse, got $1.7 million.

Other notable projects include My Defit Pet, MeebMaster and Theta Arena.

Vietnamese have gained prominence in the blockchain game industry with Axie Infinity, followed by many other projects that have raised millions of dollars, said Phan Tung, co-founder of Faraland.

Thao Trang, chief marketing officer at Project SEED, a game platform powered by blockchain technology, said global industry insiders see Vietnam as a blockchain ecosystem, not just separate projects.

The country has a large number of smartphone game players with 57 percent of 68 million smartphone users spending an average of 3.9 hours a day gaming, according to market research company App Annie.

It is also ranked second in Southeast Asia in mobile game downloads with 22 percent of market, behind Indonesia at 38 percent.

“Blockchain has opened the door for new business and revenue for game companies. They should take this advantage of this to expand globally,” said Lynn Hoang, national director of cryptocurrency exchange Binance Vietnam.

However, blockchain game developers in the country face many challenges, especially in recruiting people with adequate skills. There is a shortage of suitable candidates, companies say.

Trang said that her company usually found people who are either good at blockchain or game technology and had to train them to acquire other skillsets.

“Conflicts between the two groups are common. Blockchain changes every day and developers have to on their toes all the time, ready to respond to market reactions.”

Another difficulty is market pressure, which pushes developers to launch their products early, compromising quality.

Nguyen Thanh Trung, one of the founders of Axie Infinity, said that blockchain game has moved beyond the stage of discovering whether making something possible or not, to how good a creation can be.

Pham Anh Tuan, a game developer with 10 years in the industry, said that blockchain games could remain popular for at least another 10-20 years.

The blockchain industry is set to see the entrance of many traditional game giants, he said.

Technologies like virtual reality and augmented reality will be utilized to create a metaverse, he added.

November 12, 2021

Starbucks Korea faces probe over US$153 million in prepaid card takings

Starbucks has been the subject of growing speculation as a number of Korean banks express their concerns over the US coffeehouse chain’s potential move into the competitive financial services industry.

The global chain itself has not announced its plans to edge into financial services, but the booming success of the company’s prepaid gift card and mobile app – which Starbucks announced collectively had $1.56 billion in stored value by the end of 2019 – suggests there is a path emerging for the company to become a bank if it wanted to.

Despite the enticing $1.56 billion figure, 3,900 US banks have less than $1 billion in total assets according to the Federal Deposit Insurance Corporation (FDIC).

Starbucks revealed on a recent earnings call that its rewards program in the US had grown to 18.9 million active members at the end of 2019, up 16% year-over-year. “This is important because we know from experience that when customers join our rewards program, their total spend with Starbucks increases meaningfully,” he said on the call.

South Korea’s Hana Financial Group is acutely aware of Starbucks’ competitive potential. Its chairman Kim Jung-tai said in his New Year address: “Technologies have allowed coffee companies like Starbucks to be our rivals. It will be fine to call Starbucks an unregulated bank, not a mere coffee company.”

One year prior, South Korea’s KB Financial Group, KB Kookmin Bank and NongHyup Financial Group all mentioned Starbucks in their New Year’s addresses too. “The most-used mobile payment app in the US was the Starbucks app, not Google or Apple Pay,” KB Financial Group’s chairman Yoon Jong-kyoo said last year.

“About 40% of its payments were made with the app, and the amount of cash loaded onto its prepaid cards and apps surpassed the amount of cash that some provincial banks had,” Jong-kyoo added. Industry experts believe Starbucks might move into asset management through its prepaid cards, as well as into the loan, insurance and currency exchange sectors.

“Starbucks has been regarded as a fintech firm, not a coffee company, over the past few years,” an unnamed bank official said. “The removal of the word coffee from its signboard also proves this.”

The coffeehouse partnered with cryptocurrency trading platform Bakkt at the end of last year. In the first half of 2020, Starbucks and Bakkt will test a consumer app “to make it easy for consumers to discover and unlock the value of digital assets”, Bakkt’s chief product officer Mike Blandina said in October.

These recent movements by Starbucks against the backdrop of its prepaid card success have spurred the Korean financial industry to call for regulators to put controls on the coffeehouse. “Regulations are needed for prepaid service providers to maintain a certain level of capital adequacy ratio,” Hansung University’s economics professor Kim Sang-bong said.

The global chain has plenty of capital to start up its own bank. According to Statista, its revenue in 2019 was roughly $26.51 billion. With Big Techs such as Amazon, Facbook, Uber and Grab all planting their flag in the space, it seems imaginable that a similarly well-known brand such as Starbucks might be able to do the same.

But if regulators decide to clamp down on the company in certain regions, then its currently speculative appetites for a financial play could easily be curbed or at least put on hold.

October 25, 2021

Fruit exports to South Korea surge

Vietnam exported $107.25 million worth of fruit and vegetables to South Korea in the first eight months of this year, up 3.47 percent year-on-year.

The export value of vegetables and fruit to this market reached $11.1 million in August, up 13.66 percent over the same period last year, according to the General Department of Vietnam Customs.

Six kinds of Vietnamese fruit have been exported to the Asian market including: coconuts, pineapples, white and red dragon fruit, mangoes and bananas.

October 14, 2021

Squid Game star named as Louis Vuitton global ambassador

Louis Vuitton has appointed South Korean new-debuted actress, Squid Game star Ho Yeon Jung as its new global house ambassador for fashion, watches and jewelry.

The appointment comes after her successful debut in the series, Netflix’s most popular series ever and the first Korean program to rate number one globally on the platform.

Ho Yeon has recently become the most-followed actress in South Korea. Before her acting career, she was a renowned fashion model.

According to LVMH, the Squid Game star embodies the “independent Louis Vuitton woman”. Prior to her new role with the brand, she appeared on Louis Vuitton’s runway in 2017 showcasing its ready-to-wear collection.

“I immediately fell in love with Ho Yeon’s great talent and fantastic personality, and I am looking forward to starting this new chapter of the journey we started at Louis Vuitton a few years ago,” said Nicolas Ghesquiere, creative director at Louis Vuitton.

October 7, 2021