[NEWS ANALYSIS] During Covid-19 it's home, but not as we know it
The way we work, eat, socialize and relax was suddenly and dramatically changed, leaving people around the world with no option but to create entirely new routines, new habits and new rules.
Of course, with new routines and habits comes new equipment, new gear and a lot of shopping.
But how we shop and what we buy has changed as well. Korea's robust e-commerce network was already well-positioned before the pandemic, but the number of companies offering same-day or next-day home delivery has shot up over the last few months.
The idea of "untact" — a portmanteau of the prefix “un” and contact, meaning “no contact” — or "ontact" — adding the word “on” to emphasize that the contact takes place online — shopping has become crucial, both for consumers and retailers.
"Covid-19 will change our lives more than the digital revolution did," said Jeon Young-min, president of Lotte Academy, a training center for the conglomerate’s new employees, including its many retail affiliates.
The biggest change in consumption trends due to Covid-19 comes from the idea that "home is the center of life."
In Korea, with its long working hours, inexpensive restaurants and round-the-clock education, home often really was just a place to sleep. Covid-19 completely changed that.
"The house is emerging as the center of consumption, and diversifying functions at home is expected to solidify into a trend,” said Cho Ki-young, vice president at Lotte Institute of Economy & Business Strategy.
Spending, which for a lot of people used to be concentrated on weekends, is now distributed throughout the week through online shopping, while spending outside the house is generally limited to the immediate area.
"People may start to live far away from the city in bigger houses," Cho said. "As demand for offices decreases, commercial real estate in central Seoul such as in the Myeong-dong and Euljiro areas [both in central Seoul] will be impacted.”
The rapid growth of home furnishing and household appliances is currently the most pronounced change in the Covid-19 era. First-quarter sales of furniture companies Hanssem, Hyundai Livart, and IKEA all increased by 20 to 25 percent compared to the same period last year.
On 11st, home remodeling product sales increased 578 percent from February to June 9 compared to the same period last year.
Hanssem's home remodeling package sales rose 80.1 percent in April compared to January. Compared to the first quarter of last year, sales increased by 286 percent.
Seo Yong-gu, a professor of business administration at Sookmyung Women's University, introduced the phenomenon as "Helsinki style."
"Because of the bad weather, people in Helsinki have to stay home for a long time, so they spend their time decorating their homes," he said.
Another new phenomenon is the sudden popularity of six-person tables.
According to the furniture industry, more than half of the tables sold since March are large tables for six to eight people.
People started to buy large tables to increase their workspace for telecommuting and online classes. Previously, more than 90 percent of tables sold were for four people.
Furniture manufacturer Casamia’s related sales rose 54 percent on year in the February to April period, with adjustable tables especially popular.
"The trend is expected to last at least two to three years due to prolonged working from home and homeschooling,” a spokesperson from Casamia said.
Exercise and hobbies are now home activities.
The number of users of "Class 101," an online hobby and self-development platform, tripled in the first quarter compared to the first quarter last year. The platform, which runs more than 500 courses, already had 8.5 million visitors in January before the Covid-19 outbreak. As online platforms like this become more popular, the number of fitness centers and learning centers could decrease.
"Consumption of 'show-off items' like clothing and shoes is bound to decrease," said Cho.
Hunting for bargains
Despite the push to avoid contact with other people, sometimes the best bargains can't be found online. As people struggle in an uncertain economic situation, secondhand goods, especially household items, have become increasingly popular.
In the Covid-19 era, refurbished goods — ranging from furniture to home appliances, kitchenware and child care products — are rapidly growing in popularity.
Of the 16 Banpum Bannuri branches, the Cheonan branch is the largest and most popular. Banpum Bannuri opened two more branches in June. Its sales in May increased 150 percent compared to January.
"Two hundred customers visit the store on weekdays and 800 to 1,000 on weekends,” said Kim Jung-gu, head of the Cheonan branch.
For customers, the attraction is the price.
“We can buy products that are similar to new ones at a low price,” said Heo Soo-bin, who visited the store with her fiancé ahead of next year's wedding. “Whenever we have time, we are constantly visiting several refurbished goods stores across the country."
BY JEON YOUNG-SUN, CHU IN-YOUNG, KWAK JAE-MIN AND MOON HEE-CHUL [email@example.com]
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