[NEWS IN FOCUS] Searching for Korea's marketable 'It Snack'

Industry

Published: 24 Nov. 2023, 06:00

[NEWS IN FOCUS] Searching for Korea's marketable 'It Snack'

Convenience store chain CU's Seoul Gift Box includes yakgwa cookies and gangjeong sweet rice puffs [BGF RETAIL]

Handmade paper or masks may first come to mind when thinking of conventional Korean souvenirs, but the latest fad has added to the list some traditional and retro snacks — yakgwa cookies and gangjeong rice puffs.

While these snacks may have been considered less attractive in the past, savvy retailers are now enhancing their packaging, flavors, and overall appeal, turning them into must-buy items for tourists.

Korea's convenience store chain CU, boasting the highest number of stores nationwide, unveiled the “Seoul Gwaja (Seoul Gift Box)” in collaboration with the Seoul Tourism Organization this month.

Seoul Gwaja features traditional Korean snacks like yakgwa cookies and gangjeong sweet rice puffs. Yakgwa, a traditional Korean snack, lately enjoyed a resurgence in popularity, especially among the younger generation, leading the halmaennial boom. The word is a portmanteau of the word halmae, meaning grandma, and millennial, suggesting that young people have acquired an older taste.

The introduction of this snack has been well-received not only among locals but also international visitors seeking authentic flavors — with sales made using international payment methods like UnionPay and WeChat Pay surging 336 percent during the June-August period, compared to the preceding three months.

To further cater to foreign visitors, Seoul Gwaja gave the snacks a moist and soft texture rather than an overly crunchy one, according to the companies. The limited supply of Seoul Gwaja has been placed in 58 convenience stores situated around major tourist hubs, including airports, train stations, and shopping areas like Myeong-dong.

Looking ahead, the Seoul Tourism Organization plans to expand its offerings based on the sales trends. This includes the introduction of gift sets featuring various sauces, such as the popular spicy buldak sauce, packaged in tubes, and sets containing fruit preserves, including yuja, or citron, jam.

Lotte Department Store and the Korea Tourism Organization also joined hands, launching a collection of regional specialties that include a total of eight food-related tourism souvenirs from Gyeonggi to Jeju Island. Kimchips, or kimchi chips, from Namyangju in Gyeonggi and red plum wine from Yeongcheon in North Gyeongsang are among the souvenirs.

Lotte Department Store's newly launched food souvenirs include Kim Chips from Namyangju, Gyeonggi, Red Plum Wine from Yeongcheon in North Gyeongsang, and Sweet Potato Caramel from Busan. [LOTTE DEPARTMENT STORE]

In search of Korea's representative snack

Korea is witnessing a surge in foreign tourists post-pandemic, yet the absence of a quintessential must-buy souvenir before travelers head home sets it behind its neighbors with their unique offerings — Japan's Tokyo Banana, Singapore's Kaya Jam, Taiwan's Pineapple Cakes, Hong Kong's Jenny Cookies.

Recent data from the Korea Tourism Organization revealed that in September alone, the number of foreign visitors reached 1.09 million, which is a 225.2 percent surge compared to the same period last year.

“Despite Korea's increasing prominence as a travel destination and the growing fondness and curiosity of foreigners toward Korean cuisine, there appears to be a relative shortfall in efforts to transform food into a purchasable and marketable souvenir,” said Lee Hoon, a professor at the Graduate School of International Tourism at Hanyang University.

“In Japan's case, the long-standing activation of domestic tourism has led to the creation of region-specific products available only in certain areas,” Lee said. “It is imperative for Korea to brand and commercialize each region's distinctive foods, thereby enhancing the allure associated with each city and region.”

Solo tourists boost sales

In recent times, there has been a noticeable surge in foreign visitors opting for individual travel experiences rather than traditional group tours with fixed itineraries. This shift has created a favorable environment for retail, particularly at department and convenience stores.

“The shift from organized group tours with set itineraries to individually tailored travel experiences has led to a more liberal approach to shopping among foreign visitors,” according to a spokesperson from CU.

“Convenience stores, in particular, have witnessed an increase in foreign customers, with the concept of a shopping list at these stores gaining popularity and attention.”

During the launch event of 'Seoul Gift Box' in Myeong-dong, central Seoul, on Nov. 1, CU reported a swift sellout with all available stock gone in just over an hour as a crowd of local and international consumers flocked to the event. [BGF RETAIL]

Examining the year-on-year growth rates of CU's international payment transactions revealed a decline of 40.1 percent in 2020 when the country was hit by the Covid-19 wave, a trend that persisted with a 32.9 percent reduction in 2021. However, a turnaround occurred in 2022, with a resurgence of 37.5 percent, continuing into this year with a 134.8 percent surge through October.

Lotte Department Store's main branch located in the iconic tourist district of Myeong-dong also reported a staggering growth in sales from foreign tourists, soaring nearly 370 percent from January to September compared to the previous year. This surge, coupled with an 80 percent recovery, relative to pre-Covid levels in 2019, underscores the resilience of the retail sector amid the pandemic.

Global guests flock in, local shoppers step back

In stark contrast, the situation is quite different in the domestic market. Major local department stores like Lotte, Shinsegae, and Hyundai faced a decline in sales in the third quarter. Moreover, despite weathering the challenging waves of the pandemic, the convenience store sector also saw a deceleration in its growth.

In the face of a sluggish domestic market, the retail industry is focusing on creating distinctive products, including souvenirs, to attract a greater number of foreign tourists.

“While each region possesses the ability to create exceptional foods, the transformation of these products into marketable souvenirs requires expertise from established companies or support at the government level,” Prof. Lee said. “If leading companies or the government support the creation of souvenirs with unique characteristics and appeal, it could lead to the birth of attractive specialty items.”

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]