July, Sales Volume Surges Compared to Previous Month
Demand for Non-Face-to-Face Online and Home Shopping Investments Rises
Some Accessory Brands Introduce New Pure Gold Products
'Silver' Gains More Popularity as Next Investment Destination
SSG.com Best Seller in the Pure Gold Category 'Hanguk Geum Georaeso Monkey-Shaped Gold Bar 3.75g [Pure Gold 24k]'
[Asia Economy Reporter Cha Min-young] Amid recent increased volatility, demand for contactless (untact) 'Geumtech' (a compound word of gold and financial technology) has surged. The landscape of the gold trading market, which was traditionally centered around physical gold shops, is changing. This also implies that trust in online purchases has increased as people have become more reluctant to go out and have face-to-face contact due to the COVID-19 pandemic.
According to the industry on the 1st, SSG.com, Shinsegae's integrated online mall, saw a 53.5% increase in sales of pure gold products from June 28 to July 27 compared to the previous month. Sales of high-weight pure gold products weighing over 100g, mainly from the reputable Korea Gold Exchange, surged. Additionally, accessory brands such as 'Lloyd' and 'Golden Dew,' which previously did not handle pure gold products, recently introduced new pure gold accessories. This is interpreted as being closely related to the recent popularity trend of gold accessories.
At another online mall, 11st, demand for gold and silver products also surged. Between June 28 and July 27, sales of pure gold, gold bars, and stone rings increased by 13%, 89%, and 7% respectively compared to the previous month. Pure silver, which became an alternative to skyrocketing gold prices, increased by 345%, and silver bars rose by 347%, showing nearly a fourfold increase.
In the home shopping industry, which has relatively handled many gold products among contactless channels in the past, mixed trends were observed. Reflecting recent Geumtech demand, CJ O Shopping's T-commerce channel, CJ O Shopping Plus, doubled its gold product sales programming in July compared to the previous year. The main products are 'Samsung Gold Exchange 24K Necklace' and 'Gold Bars.' Although CJ O Shopping had fewer programs in June, it quickly reflected the trend and increased programming. In fact, orders for pure gold and gold bars on CJ O Shopping from July 1 to 28 increased about 2.5 times compared to the previous month.
Conversely, some home shopping channels reduced programming, judging that broadcasting was impossible due to the soaring gold prices. A home shopping company, A Home Shopping, which has handled gold products for several years, recently cut TV broadcast programming to less than half of the previous year. It is expected that the number of programs will remain at a similar level in the second half of the year. A representative of the home shopping company said, "As gold prices have risen too much recently, selling at the existing prices would result in losses, so we had no choice but to reduce programming."
An industry insider said, "It seems that the demand for safe assets has increased due to the COVID-19 issue," adding, "Also, the gold genre is becoming more popular, and demand for low-weight products under 100,000 won is increasing among younger generations, whereas it was previously mainly targeted at middle-aged groups."
Meanwhile, international gold prices, which soared to record highs, have recently turned downward over the past ten days. On the 30th (local time), August delivery gold on the New York Mercantile Exchange closed at $1,942.30 per ounce, down 0.6% ($11.10) from the previous day. Until the previous day, gold prices had broken record highs for four consecutive trading days, surpassing the $1,900 level. Gold prices surged 10.3% in July, marking the largest monthly increase since February 2016.
Joo Kyung-won, a trend general merchandise merchandiser (MD) at 11st, analyzed, "Interest in Geumtech has been hot recently as international gold prices hit record highs. Within 11st, sales of gold bars and pure gold, as well as silver products, are increasing, especially with purchases rising compared to the previous month."
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