YONO: Retailers shift as consumers go from flashy to frugal

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YONO: Retailers shift as consumers go from flashy to frugal

Published: 19 Aug. 2024, 17:16 Updated: 20 Aug. 2024, 11:49

A customer picks a pack of Orion's Poca Chips, which sell for 1,000 won (75 cents). [ORION]

To cater to a growing spending trend in Korea, retailers are rolling out a wave of ultracheap, downsized products, often priced at just 1,000 won (75 cents). Everyday items like beer and snacks are shrinking in size and cost as part of this new marketing strategy.

This new "YONO" trend — short for "You Only Need One" — reflects a shift in spending habits among consumers in their 20s and 30s who are trying to tighten their belts and prioritize essential purchases; a stark departure from the previous "YOLO" or "You Only Live Once" era.

In line with the new spending trend, the young demographic has tightened their purse strings, particularly on luxury goods like accessories and watches, during the first half of the year compared to the same period last year, according to a trend report released by NH NongHyup Bank. As per the report, spending on coffee has seen a notable decline. Young consumers reduced spending on high-end coffee brands like Starbucks and Hollys by 13 percent, while increasingly opting for budget-friendly options such as Mega Coffee, Paikdabang and Compose Coffee by 12 percent.

An employee holds two cans of Homeplus's ultra-cheap beer brand, Titan. [HOMEPLUS]

To attract cost-conscious consumers, retailers are introducing a wide range of ultra-low-priced products. For instance, Orion has reduced the prices of seven popular snacks, including Poca Chips, Swing Chips and Kkobuk Chips, to a uniform 1,000 won by decreasing the product quantity. This marks the first time the food company has offered its snacks at such a low price point.

“This is not a case of 'shrinkflation,' where companies intentionally reduce product sizes to maintain or lower prices, but rather an effort to provide relief to consumers facing rising costs,” explained an Orion official.

Once-trendy 1,000 won beers are making a comeback just in time for the popular beer-drinking months of August and September.

Convenience store chain 7-Eleven is reintroducing Burge Meester from Spain and Praga Fresh from Denmark at the budget-friendly price. These beers previously proved wildly popular, selling out within five days of their respective launches in April and June, when an impressive 200,000 and 250,000 cans were snapped up. Supermarket chain Homeplus has also entered the affordable beer market with its Titan brand, which sold a remarkable 70,000 cans within just three days of its debut.

In the fresh food sector, the number of 1,000 won products for essential ingredients is increasing.

SSG.com, an e-commerce unit under local retail giant Shinsegae, is offering a variety of vegetables, including garlic, green onions and mushrooms, for 1,000 won. Convenience stores are no exception, with the nation’s top chains rolling out private brand products like CU’s ultracheap tofu item.

The trend of price-conscious spending among YONO consumers is not unique to Korea, as reported by CNN in June, but rather is a global phenomenon. In its coverage, the news outlet said that the "YOLO economy" has given way to the "YONO economy," with consumers around the world becoming more cautious with their spending. The media reported even high-income U.S. consumers are turning to discount stores like Walmart, while retailers like Target are lowering prices to attract budget-conscious shoppers.

BY LEE SU-JEONG [yoon.seungjin@joongang.co.kr]