From knockoff Dubai chocolate to cheap champagne, convenience stores cash in on viral foods

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From knockoff Dubai chocolate to cheap champagne, convenience stores cash in on viral foods

Published: 09 Jul. 2024, 07:00 Updated: 09 Jul. 2024, 18:54

KIM JU-YEON
kim.juyeon2@joongang.co.kr

Convenient store chain CU's ″Dubai Style Chocolate″ [NEWS1]

From the craze over Dubai chocolate to champagne, Korean convenience store chains are cashing in on viral food trends.

Convenience stores have been releasing their own products similar to those of brands that are going sensational on social media and by importing and selling goods that have a strong word-of-mouth backing at considerably cheaper prices.

They have continued to increase their revenue on year — unlike department stores and large supermarkets, currently in slump due to high inflation — and they are on track to further expand, or possibly even lead, the offline retail sector this year.

Convenience stores expanding into fresh produce and foreign delicacies

Dubai chocolate, now in Korea

Convenience store chain CU said Monday that its initial supply of 200,000 “Dubai Style Chocolate” bars had sold out within two days since the product hit shelves on Saturday.

The treat was made in imitation of the globally sensational pistachio knafeh chocolate bar, dubbed “Dubai chocolate” on social media and originally created by Fix Dessert Chocolatier in Dubai in the United Arab Emirates (UAE).

The Dubai-based Fix Dessert Chocolatier's “Can’t Get Khanafed Of It” chocolate bar is filled with pistachio cream and knafeh [FIX DESSERT CHOCOLATIER]

The product became well known on social media after a UAE content creator filmed themselves eating the chocolate in an ASMR video. It is recognizable by its colorful chocolate casing that looks splashed by paint and for its crunchy texture that lends every bite a satisfying crackling sound. The chocolate confection is filled with a pistachio cream mixed with strips of crispy toasted knafeh pastry, which creates the signature crunch.

The original product is notoriously difficult to get. Only a limited amount is sold at 5 p.m. every day and delivers only to Dubai. Customers have to buy the treat online, and an employee of the chocolatier personally delivers it. At 65 dirham ($18) per bar, the chocolate is on the pricey side; and yet, it sells outs within a minute.

Popular Korean content creators started uploading their own reviews of the product, and videos featuring the chocolate — including those showing influencers creating their own versions of the treat — have become widely popular, especially among the younger generation.

Korean content creators' Dubai chocolate related content on YouTube [SCREEN CAPTURE]

The convenience store sector has quickly caught on to the trend and is introducing similar products in the domestic market. CU created its “Dubai Style Chocolate,” launched last Thursday, in collaboration with a domestic food manufacturing company. It retails at 4,000 won ($3) per box and uses dry noodles instead of knafeh to imitate the crunchy texture.

Industry insiders say the manufacturing facilities for the chocolate have been operating overnight as production struggles to meet demand and sales volume.

“The products have become incredibly popular since it became known that Dubai chocolates, only seen on social media, are now available at convenience stores,” said a spokesperson from CU’s operator, BGF Retail.

“Six out of 10 search words on our mobile app [Pocket CU] is about Dubai chocolate,” BGF Retail added.

7-Eleven's "Dubai Kadaif Chocolate" [7-ELEVEN]

Rival convenience store chains 7-Eleven and GS25 will also launch their own similar chocolate products within the month. Starting Tuesday, 7-Eleven will sell 1,200 bars of its “Dubai Kadaif Chocolate” in advance via its mobile app, prior to the product’s official launch. Customers will be able to buy up to four units per person, with one priced in the 6,000 won range. GS25 is also preparing to sell a brand of chocolate that contains knafeh as well as a private brand (PB) product and will open advance sales prior to launch.

“There is a lot of interest in products that are popular and trending overseas, especially from younger customers who are active on social media,” said Oh Da-yeon, a merchandiser on the snack division of Lotte’s Korea Seven, the operator of 7-Eleven convenience stores in Korea.

“As the millennial and Z generations have emerged as the main customer base of convenience stores, we are trying to introduce popular products as fast as we can.”

Spearheading the “Charles champagne” craze

Convenience stores have also been quick adapters to changing trends in alcohol consumption, such as the increase in people who drink alone following the Covid-19 pandemic.

GS25 is holding a promotional discount event for select French and U.S. wines in July. [GS25]

Around 82.2 percent of those born from 1980 to 2000, including millennials and Gen Z, said they bought their alcoholic drinks from convenience stores, according to a Korea Agro-Fisheries & Food Trade Corporation survey. Having seen a rise in alcohol revenue, convenience stores have been introducing promotional strategies such as limited-edition merchandise, PB products and discount events to attract more customers.

GS25 recently kicked off a craze over Charles Heidsieck, a champagne famous among wine enthusiasts, by selling bottles at cheaper prices. The bottle, which sits in the 100,000 won range at department stores, will sell for closer to 70,000 won at GS25 in July only — and payment rewards, such as those Samsung Card or Naver Pay, cloud bring it closer to 50,000 won. The product attracted massive attention, and almost every store is facing supply issues.

CU, meanwhile, has been selling NED Australian Whiskey at around 50 percent of the price it sells for in its country of origin. Emart24 has brought in the Thai whiskey Tendo, a popular souvenir among tourists coming from the Southeast Asian country, while 7-Eleven is selling overseas beers, such as Spain’s Burge Meester and Denmark’s Praga Fresh, at 1,000 won per can.

Convenience stores saw the most on-year growth in the offline retail sector in 2023. [LEE JEONG-MIN]

Convenience stores eye No.1 retail spot

Convenience stores have continued to record increased revenue, a scarce feat in a retail industry plagued by the continued recession. Large supermarkets, in total, saw a 3.1 percent drop in revenue in May compared to last year, while that of department stores decreased 0.1 percent, according to the Ministry of Trade, Industry and Energy. On the other hand, the revenue of convenience stores jumped 4.1 percent, while that of hypermarkets — commonly called super supermarkets, or SSMs, in Korea — rose 4.8 percent over the same period.

The convenience store industry has recorded the largest growth rate in the offline retail sector and is closely trailing behind department stores in terms of revenue. Some 17.4 percent of the retail sector's total revenue in 2023 came from department stores, 16.7 percent from convenience stores and 12.7 percent from large supermarkets. Convenience stores led the way in on-year sales growth, recording 8.1 percent, while department stores and large supermarkets logged 2.2 percent and 0.5 percent, respectively.

“With consumer prices staying high, revenue for the relatively more expensive department stores has stalled, while revenue for convenience stores, which have low unit prices, continues to grow,” a retail industry insider said.

“The rise in one-person households has made convenience stores a viable short-distance shopping channel; add the fact that large chains are coming up with competitive products, and there’s a high chance that convenience stores will surpass department stores in revenue this year.”

BY KIM KYUNG-MI, KIM JU-YEON [kim.juyeon2@joongang.co.kr]