Sales Platform Changed 家電

Expansion of Contactless Purchases Due to COVID-19
Shift in Strategy Focused on Experiential Stores

[Asia Economy Reporter Dongwoo Lee] Due to the spread of the novel coronavirus infection (COVID-19), the proportion of online sales for major home appliances is increasing. It is analyzed that e-commerce and other online non-face-to-face purchases are expanding as telecommuting increases and 'social distancing' is implemented to refrain from going out.

According to the electronics and distribution industry on the 31st, Emart's online subsidiary SSG.com saw its TV product sales growth rate this year rise by 160% in January, 110% in February, and 144% up to the 23rd of this month compared to the same period last year. Refrigerator items also increased by 73%, 30%, and 54%, respectively.

During the same period, Hyundai Home Shopping's sales growth rate for major home appliances such as TVs, refrigerators, and washing machines also rose by 46% (January) and 45% (February) compared to the same period last year. Considering that the average sales growth rate of home appliances sold on home shopping is about 25%, the industry explains that this is a very unusual figure.

On the other hand, the sales growth rate of offline stores for electronic products is decreasing. According to Emart, the TV sales growth rate at offline stores in January this year increased by 20.7% compared to the same period last year, but after COVID-19 rapidly spread, the growth rate dropped to 10.6% in February and shrank to 0.6% this month.

During the same period, the refrigerator sales growth rate also decreased from 39.7% (January) to 8.3% (February) and 2.1% this month, and washing machines sharply declined from 64.5% (January) to 17.4% this month.

As consumers' purchasing platforms change due to the spread of COVID-19, the electronics industry's marketing strategy, which centered on premium experiential stores, is also shifting to non-face-to-face methods. Samsung Electronics and LG Electronics are reducing the proportion of experiential marketing through premium offline stores such as 'Mega Store' and 'LG Signature Exclusive Hall' and strengthening online promotion using YouTube and SNS.

An electronics industry official said, "The offline sales proportion of major electronic products decreased last month, while online sales increased," adding, "If this trend continues long-term, it could negatively affect the performance improvement of offline stores."