Shoppers turn to e-coupons as prices rise

A shopper looks around the fresh produce corner at a supermarket in Seoul in December. [YONHAP]

With lingering economic slump and high consumer prices, more Koreans are turning to e-coupons and open-box goods to cut down on costs.

People in their 50s and 60s are scouring for and using e-coupons, which can be exchanged for goods and services at some 30 percent discounted prices.

That demographic purchased 296 percent more e-coupons in the movie category last year through the end of September than they did in the same period of the previous year, according to e-commerce platform Gmarket.

People in their 20s and 30s bought 182 percent more e-coupons than they did last year.

E-coupon purchases by people in the 50s and 60s age group also grew by 101 percent in the hair and beauty sector, 88 percent for use in convenience stores and 60 percent for restaurants and eating out over the same time period, while purchases from people in their 20s and 30s grew 62 percent, 64 percent and 30 percent, respectively.

Gmarket's e-coupon gifting function is not widely used, indicating that customers are largely buying these coupons for themselves.

“People in their 50s and 60s, who have become accustomed to making digital [purchases] after going through the Covid-19 pandemic, seem to be looking to make reasonable consumption choices in response to high consumer prices,” said Yoo Han-jin, manager of Gmarket’s life business team.

The market for refurbished and open-box products is also growing in line with consumer demand for cost-efficient goods. Coupang’s market for returns has also become popular due to its discount prices, which can knock up to 92 percent off an item's Manufacturer's Suggested Retail Price (MSRP). People search for not only expensive home appliances such as smartphones, kitchen appliances and vacuums, but also household goods such as laundry detergent, toilet rolls and children’s toys.

TMON’s Refurb Market, which specializes in the sale of refurbished goods, also saw an 80 percent on-year increase in sales made over the January to November period in 2023.

“Retailers are investing in reverse logistics as the consumer trend of trying to buy already cheap products at even lower prices becomes stronger,” an insider in the retail industry said. “Since all [returned] items must be individually inspected before they get sold, companies’ competitiveness will come from how quickly they can develop technology to sort goods.”

Cost-efficient goods are also on the rise. 11Street’s “9,900 Won Shop” saw its December 2023 sales grow by 276 percent from its opening October sales. “As high consumer prices persist, low-cost consumption has become the defining [consumer] trend,” Dankook University business professor Jung Yeon-sung said. “This is because the more the recession becomes severe, the stronger the people’s want to clearly determine value for price becomes.”

Weaker consumer sentiment means customers are more reluctant to open their wallets outside of discount events, prompting retailers to strategize on how to better attract customers.

Shinsegae Group launched a weeklong integrated discount event on Saturday, only a month after its SSG day, the company’s largest annual event. Shinsegae emphasized that many of its affiliates are joining in the event and that it is centered around the sale of items used in “daily life.”

The e-commerce sector is also increasing discounts pertaining to days of the week as well as year-end and new year promotion events.

“We are considering a wide range of strategies in line with the [currently persistent] consumer behavior of only opening wallets at large-scale sales events and flash sales,” said an industry insider.

BY CHOI SUN-EUL [kim.juyeon2@joongang.co.kr]