[Jihye Choi's Trend 2023] Practical Consumers 'Cherry-sumers' Overcoming the Recession

A Harsh Economic Downturn Predicted This Year
Emergence of "Cherry-sumers," an Advanced Form of "Cherry Pickers"
Frugal Consumption Strategies to Maximize Limited Resources

There is a prevailing forecast that a severe economic recession will occur in 2023. Various indicators are signaling a recession, such as the U.S. economy recording consecutive negative growth in both the first and second quarters, and the U.S. consumer price inflation rate reaching its highest level in 41 years. The situation in South Korea is even more challenging. Considering South Korea's high dependence on external factors and the fact that its economy generally lags behind the U.S. economy by about one to two quarters, it is possible to predict that difficult conditions will persist in 2023. In this context, consumers employing various frugal consumption strategies to maximize limited resources are emerging. Consumers who typically do not make purchases but only take advantage of benefits are called ‘cherry pickers,’ and an advanced form of these ‘recession-management type’ consumers is named ‘cherry-sumers.’

The most representative phenomenon is the increase in consumption of small-sized and small-packaged products. For example, ‘convenience store shopping’ is becoming popular. A quarter head of cabbage costs 900 won, and two bundles of perilla leaves cost 1,000 won, with a noticeable rise in people buying groceries for just a day or two at convenience stores. Convenience store chains have started displaying various fresh foods in small packages. CU launched the ‘Singsing Saengsaeng’ series, which offers small portions of vegetables most frequently found on Korean tables?such as assorted wraps, cabbage, and potatoes?in 1 to 2 meal sizes, and began selling pork belly and pork jowl in 200g packages. Seven-Eleven also introduced the fresh food brand ‘Seven Farm,’ offering 1 to 2 person portions at prices comparable to large supermarkets.

Small-sized alcoholic beverages such as beer and wine are also popular. Consumers who find 500ml somewhat burdensome purchase 250ml or 355ml bottles, which are suitable for a light drink alone. Lotte Chilsung Beverage’s ‘Cheoeum Cheoreom’ 250ml product steadily increased sales mainly at convenience stores, selling about 700 million bottles within three months of launch and establishing itself in the market. Small-sized wines under 375ml also saw rapid growth, with about 200,000 bottles sold by September 2021. ‘Bottle Bunker,’ operated by Lotte Shopping, has received great response with its paid wine tasting tab service, allowing customers to pay for and sample a glass of various wines by theme.

The MZ generation (Millennials + Generation Z) extends their love for small sizes to ‘group buying.’ On social networking services (SNS) or secondhand trading apps, they resell bulk products divided into smaller portions or purchase already divided products. The items traded vary widely, including memo pads, perfumes, and detergents. In fact, selling divided cosmetics, food, and health supplements on secondhand trading platforms is prohibited by current law. Nevertheless, related posts continue to increase. Divided trading is a saving method to endure the high inflation era and is close to a form of play that provides fun and a sense of accomplishment.

To reflect these consumer needs, Danggeun Market launched the ‘Let’s Buy Together’ service in July 2022, where neighborhood neighbors gather to buy and share items together. When neighbors want to buy or use a service together, they can post messages like “Anyone want to buy and share a box of apples together?” and gather up to four people. This service is currently implemented in some areas such as Gwanak-gu and Gangdong-gu in Seoul, with plans to gradually expand to other regions.

In Japan, even rent is shared with others. The shared housing brand ‘Rirent Residence Shibuya’ attracted attention with a service that discounts rent for the days the room is vacant. Located three minutes from Shibuya Station in Tokyo, the rent for an 11-pyeong (approximately 36.4 square meters) room fully furnished with appliances is about 2 million won. It is by no means a cheap room. However, this room has a very special secret: “If you stay out overnight, your rent is discounted.” If tenants apply for an overnight stay three days in advance through a dedicated app, the vacant room is rented out to the public as a hotel, generating profit, part of which is returned to the resident. Rent is discounted by about 6,000 yen (approximately 60,000 won) per day, and overnight stays are allowed for up to 15 days.

According to the ‘Economic Pain Index by Generation’ analysis released by the Korea Economic Research Institute in 2021, the economic pain index felt by youths aged 15 to 29 was the highest among all age groups. This was the highest level since domestic statistics began. It can be interpreted that the economic pain felt by domestic youths aged 15 to 29 has intensified due to soaring unemployment rates and rapidly rising consumer prices. The MZ generation, who previously shouted ‘YOLO (You Only Live Once)’ and ‘flex (showing off),’ has shifted their interest to practical consumption. Interestingly, unlike previous generations, the current MZ generation does not regard unconditional saving as a virtue. Instead of suppressing desires, they find ways to efficiently fulfill their desires with limited resources. Therefore, companies need to consider various ways for consumers to achieve their desires during a recession. Especially in 2023, when an unprecedented economic downturn is expected, more meticulous strategies must be prepared in advance to open the wallets of closed consumers.

Choi Ji-hye, Research Fellow, Consumer Trend Analysis Center, Seoul National University