Grab the 2 Trillion Won Convenience Store Coffee Market... Free Marketing Emerges

A customer is purchasing an 'Espresso Hot Americano' at an Emart24 store in Seoul. (Photo by Emart24)

[Asia Economy Reporter Seungjin Lee] The marketing competition among convenience store chains surrounding the coffee market, which is approaching the 2 trillion KRW mark, is intensifying. Especially in October, as the weather turned chilly, the number of customers seeking hot coffee at convenience stores surged, leading to the emergence of free marketing promotions.

According to the convenience store industry on the 19th, Emart24 is running a sensational event until the end of this month where customers can enjoy Emart24’s signature instant coffee brand, ‘Ifresso Hot Americano,’ for 500 KRW daily.

Currently, Emart24 is offering a discount event where customers can purchase a Hot Americano (normally 1000 KRW) for 500 KRW when paying with SSG Pay. In addition, they have added an event that gives customers a 1000 KRW coupon via the mobile app when purchasing a Hot Americano.

In other words, customers buying a Hot Americano can get a 500 KRW discount when paying with SSG Pay plus receive a 1000 KRW coupon, effectively allowing them to enjoy a Hot Americano for 500 KRW. To receive the benefits, customers must access the Emart24 mobile app, scan the integrated barcode, and pay with SSG Pay when purchasing a Hot Americano.

Emart24 is conducting this event because the number of customers seeking Hot Americano sharply increases from October as the weather gets colder. In fact, an analysis of Emart24’s Hot Americano sales in 2019 showed that October sales were 61.2% higher than those in September. The quarterly sales composition ratio was also highest in the fourth quarter (35.1%).

Meanwhile, consumers seeking convenience store coffee have been increasing year by year. Recently, due to the COVID-19 pandemic and the resulting restrictions on gatherings at cafes, convenience store coffee sales surged dramatically.

In early last month, when social distancing level 2.5 was implemented, GS25’s pouch coffee showed a 37.1% growth compared to the same period last year. During the same period, CU’s instant ground coffee sales increased by 38.1%, and pouch coffee sales rose by 19.9%. Seven Eleven saw a 5.9% increase in ground coffee sales and an 11.5% increase in pouch coffee sales, while Emart24 recorded high sales growth rates of 47% for ground coffee and 57.6% for pouch coffee.

According to market research firm Euromonitor, ready-to-drink coffee in cans and PET bottles sold at convenience stores grew from 1.32 trillion KRW in 2016 to 1.59 trillion KRW last year. The convenience store coffee market brewed using instant ground coffee machines also grew to 300 billion KRW last year, and the total convenience store coffee market is expected to exceed 2 trillion KRW. As the convenience store coffee market continues to grow, competition within the industry is expected to become increasingly fierce.

Previously, GS25 launched ‘The Pop Plus Cafe25,’ a coffee subscription service where customers pay a monthly fee of 2500 KRW to receive up to 60 discounts of 25% on their coffee brand ‘Cafe25’ products per month. Following this, Seven Eleven also engaged in aggressive marketing by selling a two-month (August-September) subscription for their ‘Seven Cafe’ monthly pass at a 50% discount for 10,000 KRW.

A convenience store industry official explained, "Convenience store coffee is competitively priced and its quality has greatly improved, so the number of customers choosing convenience store coffee over cafes is steadily increasing. As the weather gets colder, convenience store coffee sales rise, and the industry will become even more aggressive in securing customers."