The retail market is making moves to better capture consumers living in single-member households as demand in this demographic continues to rise, with notable impact on revenues.
Retailers and manufacturers alike are making changes to their products to appeal to these so-called “single-sumers,” who are seeking out smaller furniture and appliances, multifunctional products and single-serve foods.
(Hanssem)
The rise of single-member households in Korea has been noted for several years. According to Statistics Korea, 27.2 percent of households in Korea in 2015 were single-member households, with that ratio expected to rise to nearly 30 percent by 2020. However, this demographic trend had not immediately led to a significant change in the way that retailers did business.
Soon, the disparity in revenue growth between retailers that appeal to single consumers and those that do not started to demonstrate the importance of this consumer group.
The most visible example is convenience stores, which are often sought out by single-member households for their small-sized and single-serve products. Convenience stores were a rare bright spot in a sluggish retail economy last year.
According to the Korea Association of Convenience Store Industry, sales at convenience stores in 2016 are expected to have reached 20.4 trillion won ($18.2 billion), representing an 18.6 percent on-year increase.
The industry broke the 20 trillion won mark just five years after reaching 10 trillion won in 2011.
The frozen rice dishes market has also grown significantly as consumers who live alone seek out easy dining options. According to market research agency Link Aztec, the market grew from 8.9 billion won in 2012 to 21.3 billion won in 2014, and 46.5 billion won in 2016, with major food players like CJ CheilJedang, Pulmuone and Ottogi driving competition.
According to SK Planet, over 30 percent of users on its online open market 11st are consumers who live alone, indicating that this population is fueling sales in the growing online marketplace.
“This year, 11st will work to accurately analyze the preferences of single-sumers, who have become a major consumer base, and expand lifestyle services for them,” said Park Joon-young, senior vice president at 11st.
Other companies that previously did not offer products for single-person households are now joining the fray. Furniture makers Hanssem and Casamia, which had lost market share to Ikea, began to roll out products designed for smaller apartments.
“New living trends such as one- and two-person households and smaller spaces has led to a downsizing boom in the furniture market,” said a spokesperson for Casamia. The brand‘s offerings for this demographic focuses on compact and modular products that can be assembled in different ways to fit into spaces of different sizes and serve multiple functions.
Rival Hanssem also rolled out a new series of single-sized beds. “Single-sized beds were previously bought mostly for children and teenagers, but recently demand for this size is growing among adults in their 20s and 30s, and seniors,” said a spokesperson for the brand.
To meet the demand, Hanssem has recreated some of its previous queen-size designs that had targeted newlyweds into smaller, single-sized beds.
The downsizing trend has appeared in the home appliances sector as well.
(Galleria Department Store)
According to a spokesperson for Galleria Department Store, there has been growing demand for small-sized and multifunctional appliances such as the kitchen appliances sold by French brand Recolte.
Retailers such as GS Supermarket are moving to release their own lines of instant, single-serve foods in order to bring consumers into supermarkets rather than convenience stores.
By Won Ho-jung (
hjwon@heraldcorp.com)