"Cheap but Good" Customers Buy PB and Shop More

Homeplus PB Online Sales Up 27% from January to May
10,000 Units of 1000-Won Noodles Sold in One Week
Sales Increase and Channel Visit Attraction Due to PB Differentiation

As high inflation expands 'frugal consumption,' private brand (PB) products, which are representative cost-effective (price-performance) items, have emerged as cash cows. Large supermarkets, convenience stores, and e-commerce platforms have recently expanded differentiated product development, increasing each company's PB sales contribution. Moreover, PB products are also acting as 'attraction products' that draw customers to visit stores, creating a synergistic effect that boosts sales.

Models are showcasing popular products from Homeplus PB 'Homeplus Signature' at Homeplus Mega Food Market Gangseo branch in Gangseo-gu, Seoul on the 4th.
[Photo by Homeplus].

According to the distribution industry on the 5th, Homeplus's online sales of the PB 'Homeplus Signature' from January to May this year increased by 27% compared to the same period last year. As demand for cost-effective products surged, more than 1.9 million 1,000-won PB products were sold last month. In particular, Homeplus Signature's convenient noodles (Bibim noodles, banquet noodles, clam kalguksu) exceeded 10,000 units in cumulative sales within a week of launch. The Homeplus Signature Choco Balls and Candy, released in April, also sold more than 40,000 units in just three weeks. Homeplus stated, "In addition to the representative PB Homeplus Signature, which currently operates about 3,000 items, we will also focus on strengthening 'Simple Plus,' which handles milk and bean sprouts, and 'Homeplus Signature Home Meal,' which offers convenient meals, this year."

Lotte Mart also saw its overall PB sales growth rate exceed 10% during the same period. In addition to the renewed home meal replacement (HMR) PB 'Yorihada' last year, the grocery PB 'Oneul Joeun,' launched in March, played a key role. Oneul Joeun targeted '3040 working moms who seek efficient and comfortable shopping' by segmenting the target customer base and enhancing quality in collaboration with the central research institute. It also attracted consumer attention by incorporating the latest trends such as 'Healthy Pleasure' (adding joy to health management) and 'Zero.' As a result, Oneul Joeun products have achieved the number one sales volume in major categories. The 'Oneul Joeun Protein Bar' accounted for 20% of total cereal bar sales. The 'Oneul Joeun Black Rice' and 'Oneul Joeun Peach Iced Tea Zero' also recorded sales volumes about twice as high as the second-best-selling products in their respective categories, leading category growth.

A customer is looking at Lotte Mart's grocery private brand 'Oneul Joeun Heukmibap' at Lotte Mart Seoul Station branch.
[Photo by Lotte Mart].

PB fever is also sweeping through e-commerce. Kurly's PB sales, including Curly's, Kurly Fresh 365 (KF365), and Kurly Safe 365 (KS365), increased by 12% year-on-year from January to May this year. Curly's top-selling items included animal welfare eggs, domestic soybean tofu, daily wet wipes, and Yuringi (fried chicken). KF365's best sellers included 1+ grade antibiotic-free special eggs, 1+ Korean beef soup cuts, potatoes, and toilet paper. Coupang also saw a 36% increase in sales from small and medium-sized partner companies as PB sales grew as of March. Riding the PB popularity, 11st expanded its brand 'All Standard,' launched this month in collaboration with small and medium manufacturers, into a PB and released its first PB product. They plan to expand PB products starting with frozen HMR items such as rice tteokbokki and dakgalbi.

The industry plans to actively utilize PB products to enhance channel competitiveness by presenting PB items as reasons for customers to visit each channel. Since consumers tend to carefully consider the cost-effectiveness of essential goods, especially amid growing concerns about an economic downturn, the popularity of PB products is expected to continue for the time being. A distribution industry official said, "If existing products focused only on cost-effectiveness, now we will add clear concepts reflecting global trends and differentiated strategies that can be recognized in overseas markets, as well as attractive pricing."