[The Editors' Verdict] How to Open Consumers' Wallets in an Era of Low Growth

Dubai Chocolate Takes the World by Storm
Imitation Products Fly Off Shelves at Local Convenience Stores
Innovative Products Needed to Revive Consumer Sentiment

Last year, the hit product at convenience stores in South Korea was undoubtedly 'Dubai Chocolate.' This chocolate, made by fix chocolatier, a dessert manufacturer in Dubai, United Arab Emirates (UAE), contains a spread made by mixing Middle Eastern kadayif noodles and pistachios. The chocolate went viral worldwide after a Dubai-based Instagram influencer posted a mukbang video featuring it.

The chocolate became so popular that it was hard to find even locally in Dubai, partly due to its unique sales method. Dubai Chocolate has no physical stores and can only be ordered twice daily through delivery applications. Missing the order time means you cannot get it, a kind of 'hunger marketing' strategy that stimulates consumers' desire by selling limited quantities. A 210g chocolate costs around 20,000 KRW. An acquaintance who purchased this chocolate via overseas direct purchase as a birthday gift for his daughter said he spent over 100,000 KRW.

The domestic convenience store industry contributed to popularizing the rare Dubai Chocolate. The four major convenience store chains (CU, GS25, 7-Eleven, and Emart24) started producing and selling Dubai Chocolate in collaboration with local small and medium manufacturers when the Dubai Chocolate mukbang video swept the world last summer. Instead of the hard-to-get Turkish kadayif noodles, they used domestically produced dried noodles to replicate a similar taste.

As a result, Dubai Chocolate ranked as the most purchased product by foreign tourists at CU, operated by BGF Retail, last year. Since its launch in July last year, it sold about 20 billion KRW worth by the end of the year. This performance surpassed that of banana-flavored milk, the top product purchased by foreign tourists. The chocolate, hard to find even in Dubai, became easily accessible at convenience stores everywhere, and its selling price was around 5,000 KRW, more than four times cheaper than the original.

The popularity of Dubai Chocolate is not limited to foreign tourists. Domestic consumers, captivated by the exotic Middle Eastern flavor, flocked not only to convenience stores but also to domestic department store pop-up stores and dessert cafes showcasing this chocolate.

The domestic dessert market has a short trend cycle. Most products, like tanghulu or yoajeong (yogurt ice cream), gain brief popularity through word of mouth on social networking services (SNS) and then disappear. Dubai Chocolate could also lose its throne to new desserts as part of 'Ditto' (consumers purchasing products or services by following celebrities' consumption preferences). However, what is clear is that fast-following imitation products have stimulated curiosity even among consumers who do not usually enjoy chocolate, creating new demand.

Samyang Foods' Buldak Bokkeum Myun (Hot Chicken Flavor Ramen) is similar. Inspired by customers sweating profusely while eating spicy chicken at a restaurant in Myeongdong, Buldak Bokkeum Myun pioneered the spicy ramen market and is making new history in the domestic food industry. Notably, Buldak Bokkeum Myun is not taking market share from competing ramen but creating new demand.

This year, the Year of the Blue Snake, gloomy news has continued since the beginning of the year. Following last year's internal conflict and aircraft crash, consumer sentiment has frozen solid. Moreover, the world's fastest aging population is leading to structural low growth, solidifying sluggish domestic demand. Since the transition to the COVID-19 endemic phase, 'frugal consumption' and 'no-spending challenges' have emerged as new consumption trends, reflecting tight household finances. In this low-growth era, brilliant ideas that can generate new demand are desperately needed.