Retail price war continues online and in storesThe price war in the retail industry has reached new heights, with discount stores and e-commerce platforms pushing prices to the limit in a bid to win over customers.
Lotte Mart on Wednesday started selling a single bulb of garlic for 100 won ($0.09) for a week from today. This price is considerably cheaper than the current offerings of 20 bulbs for 7,800 won or 30 for 10,500 won, making the price per bulb 350 won at the cheapest.
The retailer said the promotion is part of its effort to encourage sales of garlic, which has seen prices drop this year following a spike in production.
The retail price of garlic dipped 30 percent in July on-year from 56,009 won for 10 kilograms (22 pounds) last year to 38,983 won this year, according to the Korea Agro-Fisheries & Food Trade Corporation. Data from Statistics Korea shows that garlic production this year increased 17 percent on-year to 388,000 tons.
On Tuesday, Lotte said it will kick off a seasonal promotion to help boost the economy that has been impacted by various economic factors, including Japan’s recent removal of Korea from a so-called white list of countries getting preferential treatment for trade.
Starting Wednesday, Lotte began selling fresh produce, daily necessities and processed food at discounted prices. It is selling 100 grams of Korean pork belly at 2,080 won and 16 pieces of sushi at 10,000 won. Six instant cup ramen from Nongshim are being offered at 3,480 won.
“Right ahead of the vacation season, when 40 percent of summer vacationers are expected to crowd in [to marts], Lotte has presented a large discount promotion,” said Lee Sang-jin, the marketing head for Lotte Mart.
Starting this month, Emart kicked off what it calls “everyday national price,” a project that aims to offer a price that is 30 to 60 percent lower than the price of similar products of a similar quality. The price offering is possible primarily through mass purchasing and simplified production and sales processes, according to Emart. Price reductions will not be temporary, but will remain in place indefinitely.
Starting with 30 product categories, the retailer says it will expand the categories to 200 by the end of the year. The project reflects Shinsegae Vice President Chung Yong-jin’s opinion that “only the lowest-priced and premium products will survive in the market.”
Among the first products to be discounted is a bottle of Dos Copas Cabernet Sauvignon from Chile, which is sold at 4,900 won. The price is around 60 percent cheaper than wines of a similar quality from Spain and Chile, according to Emart.
E-commerce website Tmon on Tuesday started a discount on 1,600 daily necessities. The products will be discounted by up to 50 percent, with some sold at 60 percent cheaper than at discount stores, according to the online shopping platform.
“We will continue to offer striking benefits so customers are able to purchase items without a second thought,” said Tmon CEO Lee Jin-won.
But as well as driving sales, the price war also aims to improve the image of the different retailers in a bid to increase profit in the long run.
“Not every product sold at a specific online or offline mart is cheap,” said Prof. Lim Chae-un who teaches marketing at Sogang University. “By risking a loss in the sales of several products, retailers hope to embed the image that people can purchase goods at a lower price than elsewhere - even those that are not on sale.”
BY JIN MIN-JI [firstname.lastname@example.org]