Chuseok gift sets now more affordable than ever

Industry

Chuseok gift sets now more affordable than ever

Retailers are presenting a wide selection of items that are unique but affordable for this year’s Chuseok holiday in response to the soon-to-be-implemented antigraft law that bans gifts over 50,000 won in certain occupations. Clockwise from top left: cheesecake from Japan’s Le Tao (38,000 won), Korean bakery Patgodang’s flagship red bean paste bread (33,000 won), Busan-based Samjin Fishcake’s assorted fishcake set (25,000 won), British tea brand Twinings’ teapot set (48,900 won), Italian coffee brand Lavazza’s canned bean powder (23,710 won) and a lamb chops set (50,000 won to 70,000 won.) The first three are offered by the Galleria Department Store and the rest are from Lotte VIC Mart. [GALLERIA DEPARTMENT STORE, LOTTE VIC MART]

Chuseok, the Korean equivalent of Thanksgiving Day, is a time to exchange gifts to show respect and appreciation to family and friends, and as such, it’s also one of the most profitable seasons for retailers.

But concerns in the industry sharpened when the court passed the so-called antigraft law, also known as the Kim Young-ran Law, in mid-July. The law, which goes into effect Sept. 28, bans public officials, journalists and private education faculty members from giving or receiving gifts that cost more than 50,000 won ($45).

In order to minimize the shock, retailers promptly came up with marketing strategies ahead of the national holiday, which falls on Sept. 15 this year, such as offering gift sets that cost less than 50,000 won by reducing the size of packages or offering different items.

Galleria Department Store increased its inventory of products that cost less than the limit from last year’s 56 items to 478 this year. Hyundai and Lotte Department Stores also increased their number of items below the limit by 30 percent.

“We doubled the amount of low-priced items and put them on center display while discarding of those in the mid-price range,” said a meat vendor at the grocery corner of Lotte Department Store in Sogong-dong, central Seoul. “I could feel the demand for high price products shrinking this year.”

Another vendor at the fruit corner said senior adults were coming to her and asking for help picking gifts “that would not go against the Kim Young-ran Act.”

Smaller is better

The simplest way to achieve the required price range was to reduce the size of packages.

The online retailer Lotte.com introduced a gift set of Korean beef that’s 500 grams (17.6 ounces) for 39,900 won, whereas the standard size for a Korean beef gift set ranges from 18,000 grams to 30,000 grams and starts at 200,000 won.

Hyundai Department Store also introduced a fruit set comprising four apples and one pear for 38,400 won, while the standard size consists of at least 12 pieces of fruit.

“Although the law in question has yet to take effect,” said a Lotte Department Store spokesperson, “people were cautious about buying gifts the way they used to. Instead, more practical items such as health products are popular.”

The spokesperson added that health products such as red ginseng and vitamins have sold particularly well compared to last year. For the previous two years, Korean beef products were the most popular Chuseok items, but they fell to second place this year as they were outperformed by health products, which took up more than 30 percent of all sales of gift sets.

The Lotte Department Store spokesperson said that while it’s hard to lower the cost of agricultural products such as beef by reducing their size, health products offer consumers an extensive lineup at various prices, making it easier for consumers to have their pick.

Be original

Instead of trying to provide the same items at reduced prices, some merchandising directors are thinking outside the box by presenting novel items as part of their Chuseok gift sets.

Galleria Department Store, known for its collection of restaurants and bakery booths, has chosen to present eight types of gift sets from products made here such as a selection by Japanese cheesecake brand Le Tao or Busan’s Samjin Fishcake.

“The products have been steady sellers in our branches,” said a Galleria spokeswoman, “which is why we thought making them part of our gift sets for Chuseok might work.”

Lotte Vic Market, a warehouse-based retail platform, has assembled a gift set with items shipped from overseas such as England’s tea brand Twining’s teapot set or French jam brand St. Dalfour’s gift set made up of 12 types of jams.

E-Mart expanded the lineup of collaborated gift sets they introduced last year by releasing gift sets consisting of wine and cheese, or wine and seafood, doing away with the traditional format of agricultural or fishery products. Their inventory last year sold out. These attempts by retailers have proven effective so far.

Hyundai Department Store, for example, said it saw a year-on-year growth of 8.6 percent in the Chuseok gift corner last week while E-Mart said the sales of its gift set products from Sept.1-6 increased by 15.1 percent compared to the previous year. “These trendy items accounted for 30 percent of the entire gift products last year,” said Choi Hoon-hak, a marketing manager at E-Mart. “This year, the share is expected to rise as high as 50 percent.”

BY JIN EUN-SOO, SONG KYOUNG-SON [jin.eunsoo@joongang.co.kr]