(123rf)
Crispy, double-fried, and an inseparable companion to cold beer, fried chicken is South Korea's beloved go-to snack for everything from sports viewing to late-night hangouts.
But the country's $5.7 billion fried chicken industry, the world's third largest behind the United States and China, is showing signs of market saturation with a growing franchise dominance.
Recent data from the Korea Fair Trade Commission and Statistics Korea paint a picture of a sector in flux as major franchises continue to expand their footprint.
In 2022, franchises accounted for 71 percent of all fried chicken establishments in South Korea, up from 64 percent in 2020. This growth in franchise outlets, from 27,303 in 2020 to 29,358 in 2022, occurred as the total number of chicken eateries actually shrank from 41,742 to 41,436 during the same period.
Industry experts point to the boom in food delivery apps as a key driver of this trend. App-based ordering nearly tripled in revenue from 2019 to 2022, boosted by pandemic-era dining habits.
When food is searched for and ordered through these platforms, brand recognition becomes more important. It also gives big-name franchises an edge in reaching more customers with large-scale promotional campaigns, they said.
In another sign of a market under strain, the data from the FTC and Statistics Korea shows a 7.6 percent drop in aggregate annual operating profits of franchise chicken outlets in 2022, totaling 860 billion won. About 64 percent of franchisees reported annual earnings below 200 million won.
South Korea’s top three chicken franchises by revenue in 2023 were BHC, Genesis BBQ and Kyochon, according to the Financial Supervisory Service.
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