Duty-Free Shops and Department Stores Sales Declined
Jeongmol and Home Shopping Sales Up Over 160% YoY
"Steady Trend Expected Even After COVID-19 Stabilization"
[Asia Economy Reporter Choi Saeng-hye] As the spread of the novel coronavirus infection (COVID-19) continues, face-to-face channel consumption at KGC Ginseng Corporation has been declining, but the number of people purchasing red ginseng through home shopping and online channels has surged. Accordingly, KGC's domestic sales revenue is expected to record a level similar to that of the previous year.
According to KT&G and Hi Investment & Securities on the 5th, KGC Ginseng Corporation, which sells red ginseng products under the CheongKwanJang brand, is expected to record domestic sales revenue in the ginseng sector for the first quarter at 367.9 billion KRW, up 0.8% compared to the same period last year. First-quarter export revenue is also estimated to grow 0.5% year-on-year to 33.9 billion KRW.
Although overall consumption in face-to-face channels such as duty-free shops, department stores, and large supermarkets has decreased, sales through home shopping and online channels are experiencing high growth. This is because, as the spread of COVID-19 continues, consumers purchasing red ginseng related to immunity through contactless methods have surged.
In fact, according to KGC Ginseng Corporation, an analysis of channel-specific sales from February to March, when COVID-19 began to have a significant impact, showed a sharp increase in sales through online and home shopping channels. During this period, sales of 'Jeongmol,' the online shopping mall operated by KGC Ginseng Corporation, and home shopping channels both grew by more than 160% compared to the same period last year.
Lee Kyung-shin, a researcher at Hi Investment & Securities, stated, "Considering that despite the lull in the Middle East Respiratory Syndrome (MERS) issue in 2015, the expanded interest in immunity led to a steady increase in demand even after the issue, a solid performance trend (for KGC Ginseng Corporation) is expected even after COVID-19 stabilizes."
Meanwhile, consumers searching for red ginseng and health supplements on open markets are steadily increasing. On 11st, red ginseng sales from January to March increased by 14%, 56%, and 12% respectively compared to the same period last year. For health supplements, sales increased by 13%, 36%, and 34% during the same period. On Gmarket, red ginseng and ginseng sales in February increased by 75% compared to the previous year. Sales from March 1 to 30 also rose by 33% year-on-year. Total health supplement sales increased by 27% and 37% during the same period, respectively.
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