Impact of COVID-19, Rapid Growth of Untact Consumption with Increase in Mobile Simple Payments
Gongcha Korea Sees Surge in Sales by Expanding Delivery Service to Over 300 Stores Nationwide
[Asia Economy Reporter Lee Seon-ae] The spread of the novel coronavirus infection (COVID-19) is changing many aspects of our daily lives. Wearing masks and using hand sanitizers have become routine. The government has even launched a ‘social distancing’ campaign. These circumstances are causing significant changes in consumer spending patterns. As consumers refrain from outdoor activities, online shopping and delivery orders have increased, activating untact (non-face-to-face) services. Some analyses suggest that the expansion of untact consumption will not be a temporary phenomenon caused by COVID-19 but a turning point in consumer trend changes.
◆ Food & Beverage and Dining Industries Expanding Delivery Services = According to industry sources on the 27th, a representative example of untact marketing is ‘delivery service.’ Accordingly, the food and beverage industry is leading the expansion of delivery services that were previously implemented only in some stores. The number of ‘home tea enthusiasts’ and ‘home cafe enthusiasts’ enjoying cafe culture with coffee, tea, desserts, etc., at home is increasing.
Gongcha Korea recently expanded delivery services to more than 300 stores nationwide to enhance customer convenience. As consumer demand for delivery services increased, Gongcha partnered with delivery apps ‘Baedal Minjok’ and ‘Yogiyo’ to expand delivery channels. In particular, they extended the service range of Baedal Minjok, the country’s number one delivery app, to strengthen order accessibility. Through this partnership, customers can enjoy major menu items sold at Gongcha, including original tea, milk tea, and best combinations, via delivery apps. Gongcha plans to continue strengthening its delivery services.
Additionally, Gongcha has been operating a kiosk ordering system since 2017, currently available in about 320 stores. Gongcha also offers a membership order service, allowing beverage orders and payments through the membership app. By actively adopting delivery, kiosk orders, and membership order services, Gongcha minimized contact between staff and customers, reducing anxiety and increasing customer satisfaction.
Gongcha Korea stated, “We are experiencing the effects of untact marketing,” adding, “In response to consumption changes caused by COVID-19, we expanded delivery services from some stores to over 300 stores nationwide. Compared to the same period last year, average monthly delivery sales per store increased by 113%, and total sales compared to the previous month rose by 144%.” The official continued, “Untact marketing improves customer convenience and simultaneously expands customer touchpoints from the brand’s perspective, creating a win-win effect. We plan to continue expanding various services so that customers can enjoy Gongcha more conveniently.”
The Venti, a large-capacity coffee franchise, also signed a business agreement with ‘Yogiyo’ to expand delivery-available stores. Through this agreement, The Venti will expand its service from about 100 stores to approximately 300 stores nationwide. Furthermore, The Venti and Yogiyo will conduct joint marketing and events to promote the spread of home cafe culture by leveraging each company’s strengths.
McDonald’s has enabled orders for ‘McMorning’ through Baedal Minjok and Yogiyo as the number of orders via McDelivery increased. To make breakfast more accessible, McDonald’s newly launched the ‘McMorning Combo’ menu, combining McMuffin and premium roast coffee. By offering combo menus in addition to single and set menus, McDonald’s broadened customers’ menu choices.
◆ Homebodies and Housewives Leading Untact Consumption Contribute to Sales Growth = As untact consumption spreads, related sales have noticeably increased. Paris Baguette delivers key products such as cakes, bread, and sandwiches to customers’ desired locations through its ‘Pava Delivery’ service. It was the first bakery franchise to start such a service in September last year. Paris Baguette reported that orders in January increased by 1100% compared to the previous year, and sales surged by 850% during the same period.
With more time spent at home, the number of people seeking convenient meals has increased, boosting sales of ready-to-eat meals. According to TMON, from February 17 to March 18, sales of ready meals such as porridge and fried rice, dumplings and pork cutlets, and ramen increased by 137%, 147%, and 662%, respectively, compared to the previous year. During the same period, meal kit sales rose by up to 1150% year-on-year.
Fresh Market ‘Orga Whole Foods,’ a subsidiary of Pulmuone, also saw its direct-operated store O2O (Online to Offline) service sales increase by about 300% in February alone. Moreover, same-day delivery phone orders through the Orga shopping mall app increased by about 300% year-on-year, and new members surged by 618%. Particularly, at the Banpo branch in Seoul, the number of O2O service users increased about 4.8 times compared to last year, with female housewives playing a key role in sales growth.
◆ Unique Scenes Brought by the Untact Trend = Beyond delivery service apps mainly limited to food, the usage rate of errand apps has recently increased. According to Dallija, which operates the errand app ‘Kim Jipsa,’ errand orders in January and February increased by about 25% compared to November and December 2019. The app handles all errands within legal boundaries, such as disposing of food waste for 1,000 won and sending parcels at the post office for 3,000 won. Especially as the COVID-19 situation worsened, requests to purchase masks on behalf of customers have increased. Before the mask 5-day rotation system was implemented, people had to stand in long lines to obtain masks, leading to more requests for proxy purchases.
Untact medical consultations have also become possible. The simple hospital reservation and registration mobile service ‘Ddokdak’ offers hospital reservation and pre-visit mobile medical questionnaires through its app. This reduces patients’ waiting time at hospitals and helps those hesitant to visit medical facilities due to concerns about secondary infections such as COVID-19 receive safer medical care. In fact, Ddokdak reported that its service users increased about fourfold during the week from January 20 to 26 due to concerns about COVID-19 infection.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
