The Global Economic Crisis: The Impact On Consumer Attitudes & Behaviors In South Korea

Published by: Datamonitor

Published: Jun. 30, 2009 - 88 Pages

Table of Contents

Overview

Catalyst

Summary

Table of Contents

Table of figures

Table of tables

THE FUTURE DECODED

INTRODUCTION: Understanding how 'recessionary mindsets' influence attitudes towards and actual consumption is vital

The 'recessionary mindset' of South Korean consumers could has passed the low point while many remain skeptical about recovery

The economic downturn has had a more limited discernable impact on the lifestyles of most Korean consumers compared to their global peers

Key takeouts and implications: a 'recessionary mindset' has not yet been fully matched by a recessionary impact on the lifestyles of South Korean consumers

TREND: Stagnating consumer confidence is reflected by a widely-held negative outlook towards the government among South Korean consumers

South Koreans are showing a doubtful attitude about how things are going and this appears to be negatively impacting their perceptions about quality of life

Key takeouts and implications: the pessimism towards the direction of the country has dampened the outlook of South Koreans and satisfaction with their quality of life

TREND: South Korean consumer's low confidence in their financial security has led to a more careful attitude with money

Satisfaction with one's financial situation is low among South Korean consumers

Perceptions about the economy, job security, financial status and the housing market in South Korea have all worsened, but many feel relatively optimistic about the outlook for economic development

South Korean consumers are managing their finances more closely with some struggling to pay the bills

South Korean consumers are making greater efforts to save while negative attitudes towards credit prevail

Key takeouts and implications: South Korean consumers have lost satisfaction in their financial situation but showing optimism of economic improvement coming towards the end of 2009

INSIGHT: The global economic crisis has had a negative impact on the emotional wellbeing of South Korean consumers with levels of stress up and personal happiness down

Stress levels have all been negatively impacted during the financial downturn

Work-life balance has also worsened in combination with the deepening downturn

The happiness levels of South Korean citizens have declined in line with the global economic crisis

Key takeouts and implications: recessionary consumers in South Korea are in greater need of emotional and physical 'pick-me-ups'

INSIGHT: South Korean consumers have become increasingly price and value consciousness following the global economic downturn

South Korean consumers are becoming more value conscious and therefore looking to save money when buying groceries

Price and value consciousness heavily influences where South Korean consumers do their grocery shopping and how they shop but quality still matters too

Key takeouts and implications: the general value consciousness of South Korean consumers has intensified and is reflected by how they determine where to shop

INSIGHT: Brand loyalties are under threat in South Korea, with some shoppers increasingly willing to give up favorite brands and embrace private label alternatives

South Korean consumers are beginning to give up some favorite brands as they make more 'considered' choices

Private labels have yet to become more attractive to South Korean shoppers in the downturn

Key takeouts and implications: the general value consciousness of South Korean shoppers, combined with their current reflective consumption patterns, will create a platform for ongoing private label growth

INSIGHT: South Korean consumers are embracing money saving tactics when it comes to food and non-alcoholic beverage purchases and preparation

South Korean consumers are adopting various responses to cut back on food and beverage expenditures

Many South Koreans consider private label food and non-alcoholic beverages to be of comparable quality to famous branded equivalents

Key takeouts and implications: a resurgent desire to cook more often at home has occurred while private label and market leading brand competition in food and non-alcoholic beverages will intensify

INSIGHT: South Korean consumers have not made significant changes to their personal care regimes or product choices

More than 60% South Korean consumers are committed to looking their best in day-to-day life

Price and value conscious personal care/beauty shoppers in South Korea have not made notable changes to their personal care shopping and usage in order to save money

Private label and personal care/beauty products have a relatively high degree of credibility among South Korean consumers

Key takeouts and implications: South Korean consumers' health and beauty regimes are proving to be largely recession resistant

INSIGHT: Alcoholic drinks' consumption patterns and preferences in South Korea have not changed significantly during this downturn

South Korean consumers do not appear to be attentive on spending on alcohol, nor do they perceive that they have been making significant cut backs in the amount they consume

South Korean drinkers appear to have become less value conscious regarding alcoholic beverage choices for both on-trade and off-trade occasions

Private label alcohol is less developed in South Korea and therefore not yet accepted as an alternative among South Korean drinkers

Key takeouts and implications: there has been little to no change for around seven in ten South Korean drinkers, suggesting that alcohol is largely 'recession resistant'

INSIGHT: South Korean consumers' household care buying preferences are heavily shaped by price consciousness irrespective of an economic downturn

Price led value is still the most influential factor for South Korean household and laundry care purchases but preferences do reflect other important influences

The private label household care market in South Korea is small but potentially lucrative given shoppers' desire for value

Key takeouts and implications: South Korean consumers associate hygiene and cleanliness with wellbeing and this, combined with their inherent dislike of household chores, makes them somewhat quality conscious

ACTION POINTS

ACTION: Adopt a relentless approach to delivering and communicating better value-for-money than the competition

Actively demonstrate value-for-money by re-appraising marketing initiatives, including slogans

Ensure that the value gains for shoppers are instantaneous

Focus on quality to maintain differentiation and prove to consumers that quality really matters

Evaluate and adapt cost structures so that it is feasible to offer value-for-money solutions

APPENDIX

Methodology

Further reading and references

Ask the analyst

Datamonitor consulting

Disclaimer

List of Tables

Table 1: Consumer survey: level of satisfaction with the general direction of how things are going and quality of life, in South Korea and globally, 2009

Table 2: Consumer survey: satisfaction with current financial situation and importance attached to wealth/ income and having finances in good order, in South Korea and globally, 2008 and 2009

Table 3: Consumer survey: perceptions of whether broader economic conditions, financial situation, job security/confidence and housing market confidence had improved or worsened in the six month previous and how each might change in the proceeding six months, in South Korea, 2009

Table 4: Consumer survey: propensity to feel tense and the extent to which perceived levels of stress have changed in the last six months and are expected to change in the next six months, in South Korea

Table 5: Consumer survey: propensity to feel very tired and the extent to which perceived work-life balance has changed in the last six months and are expected to change in the next six months, in South Korea

Table 6: Consumer survey: happiness levels and the extent to which perceived happiness has changed in the last six months and are expected to change in the next six months, in South Korea

Table 7: Consumer survey: changing value-consciousness and desire to save money when buying groceries among South Korean shoppers, 2009

Table 8: Consumer survey: changing efforts being made to use coupons, change grocery store choice to save money, embrace more disciplined shopping and gather and utilize store price information, among South Korean shoppers, April 2008-April 2009

Table 9: Consumer survey: the relative cost/value and quality consciousness of South Korea and global consumers overall when purchasing food and beverage products in 2008

Table 10: Consumer survey: the extent to which consumers are making effort to save money by adopting various food and drinks consumption and preparation approaches, in South Korea, 2009

Table 11: Consumer survey: perception about the relative superiority or inferiority of private labels versus well known or market leading famous brands in food, soft drinks and hot drinks, in South Korea, 2009

Table 12: Private label food penetration and spend (US$ millions) in South Korea, 2002-2012

Table 13: Private label non-alcoholic beverage penetration and spend (US$ millions) in South Korea, 2002-2012

Table 14: Consumer survey: the importance attached to looking one's best in day-to-day life, the pressure to look good, and satisfaction with physical attractiveness/ appearance, among South Korean consumers, 2008 and 2009

Table 15: Consumer survey: the extent to which consumers are making an effort to save money by using spas or salons less often, in South Korea, 2008-09

Table 16: Consumer survey: attempts made by South Korean consumers to change their personal care/beauty habits in order to save money, by product category, 2008-09

Table 17: Total private label personal care penetration and spend (US$ millions) in the South Korea, 2002-2012

Table 18: Consumer survey: perception about the relative superiority or inferiority of private labels versus well known or market leading famous brands for grooming/ beauty products, and agreement that such products are good alternatives to well known or market leading famous brands, in South Korea, 2009

Table 19: Consumer survey: attentiveness towards the amount of money spent on alcohol and the degree to which alcoholic beverage consumers in South Korea have cut down on the overall amount of alcohol bought/consumed in 2008-09

Table 20: Total private label alcoholic beverage penetration and spend ($ millions) in South Korea, 2002-2012

Table 21: Consumer survey: the changing degree to which household and laundry care consumers in South Korea made product choices with value or cost in mind, 2008

Table 22: Consumer survey: attitudes towards doing housework in South Korea and globally, 2008

Table 23: Private label household care penetration and spend (US$ millions) in South Korea, 2002-2012

Table 24: Consumer survey: perception about the relative superiority or inferiority of private labels versus well known or market leading famous brands for household cleaning/laundry products, and how often such products are purchased to save money, in South Korea, 2009

List of Figures

Figure 1: Datamonitor's Recession and Recovery portal will allow industry players to continually identify emerging opportunities and track what is happening in the UK economy as it develops

Figure 2: More than half of South Korea's consumers 'tend to' believe the country is in recession, which is indicative of a 'recessionary mindset' among them

Figure 3: 30% of Korean consumers feel that their lifestyle has not changed in light of the downturn

Figure 4: South Korean consumers are showing a comparatively neutral attitude about how things are going in their country and their satisfaction of their quality of life

Figure 5: Nearly half of South Korean consumers are currently dissatisfied with their financial situation and the majority associate a good income and having their finances in good order with a sense of wellbeing

Figure 6: Negativity about the economy at large influences how South Korean consumers perceive about their personal situation

Figure 7: 37% of South Korean consumers expect economic conditions to improve in the period April 2009 through to October 2009 and 27% think the same about the housing market

Figure 8: South Korean consumers are managing their finances more closely while 25% report difficulties in paying all the bills at the end of the month

Figure 9: Reluctance about using credit to maintain their lifestyles and an increasing desire to save money has become more apparent among South Korean consumers throughout 2008 and 2009

Figure 10: The economic downturn has also been accompanied by additional levels of stress in South Korea

Figure 11: South Korean consumers are prone to fatigue while more than one in third has experienced a worsening work-life balance in the period October 2008 to April 2009

Figure 12: One in three South Korean citizens has become less happy following during the period October 2008 to April 2009

Figure 13: The majority of South Korean consumers are more value conscious following the downturn

Figure 14: Quality of products sold has more influence than lower prices or habit over where people in South Korea, which is indicative of a 'want-it-all' value-for-money shopper mentality

Figure 15: Price and value consciousness is influencing where South Korea consumers do their grocery shopping and how they shop

Figure 16: As the downturn has intensified, so to has the extent to which South Korean consumers have been forced to sacrifice some of their favorite brands

Figure 17: 21% South Korean shoppers are routinely buying private label/store branded products in order to save money

Figure 18: Private label range plays a role in where people shop, not just in South Korea, but globally

Figure 19: The private label market is impacted by a broad range of drivers and inhibitors

Figure 20: South Korean consumers became increasingly value conscious in their food and beverage choices in 2008, but that was not reflected by a substantial quality compromise

Figure 21: The attributes deemed most influential in what food and beverages South Korean consumers buy highlight the price consciousness and quality focus shaping the choices they make

Figure 22: South Korean consumers are adopting various responses to cut back on food and beverage expenditures

Figure 23: There has been significant change in the propensity for South Korean consumers to cook an evening meal at home from scratch

Figure 24: There has been little change in the propensity for South Korean consumers to have a takeaway meal at home

Figure 25: The majority of South Korean consumers perceive the quality of private label products as identical to famous branded food products across food products, soft drinks and hot drinks

Figure 26: South Korean consumers are appearance conscious and this makes them less willing to trade-down when making personal care choices

Figure 27: South Korean personal care/beauty shoppers became more price and value conscious in 2008 but showed little desire to sacrifice on quality

Figure 28: Personal care/beauty shoppers in South Korea are less price conscious compared with their global counterparts

Figure 29: Over 40% of South Korean consumers consider private label beauty products to be good alternatives to well known or market leading brands

Figure 30: South Korean consumers are not paying much attention to how much they spend on alcohol, and at the same time they do not perceive that they have been making significant cut backs in the amount they consume

Figure 31: The indifferent attitude towards price on alcoholic drinks are obvious among South Korean drinkers, both on-trade and off-trade, in 2008-09

Figure 32: South Korean drinkers, perhaps influenced a sense of entitlement, are reluctant to opt for cheaper brands and formats of alcoholic beverages

Figure 33: South Korean drinkers are less influenced by promotional offers than consumers from other countries

Figure 34: Over half of South Korean drinkers showed a neutral attitude regarding whether private label alcoholic drinks are good alternatives to market leading or famous brands

Figure 35: Private label alcoholic drinks have the least credibility among South Korean consumers in the wine category

Figure 36: Although the influence of price increased in 2009, brand is a more influential factor on South Korean drinkers' preferences

Figure 37: Price led value is still the most influential factor for South Korean consumers' household and laundry care purchases

Figure 38: In 2008, South Korean household and laundry care choices were made with greater consideration for cost/ value but consumers showed an ongoing desire for efficacy led quality

Figure 39: South Korean citizens value cleanliness, inherently dislike household tasks and seek to minimize the amount of time they spend on such tasks

Figure 40: More than half of South Korean consumers are 'frequent' purchasers of household care products on the basis of value-for-money

Figure 41: Nearly 30% of South Korean shoppers regularly purchases private label household care products to save money

Figure 42: Although a small proportion of South Korean consumers consider private label household and laundry products to be superior to branded equivalents, the majority perceive no difference

Figure 43: The Feed Your Family For a Fiver campaign reflects a shift in communication tact for the number three retailer Sainsbury's

Figure 44: Manufacturers and retailers looking to deliver value-for-money must in the provision of factors associated with the PPI, but while also offering consumers lower than expected prices

Abstract

• Detailed analysis documenting South Korean consumers' 'recessionary mindset' and how this influences perceptions about current and future prospects
• Insights highlighting how the economic downturn has affected perceived quality of life, emotional wellbeing and financial security in South Korea
• In-depth analysis of South Korean shoppers' changing value consciousness and attitudes towards private label across four major FMCG sectors
• Countries and categories covered: South Korea; food and non-alcoholic beverages, alcoholic beverages, personal care and household care

• Gain a detailed understanding of changing consumer attitudes and behaviors amid the downturn in order to determine appropriate recessionary strategies
• Obtain country and sector specific insight about pertinent recessionary themes such as private label and consumers' value consciousness
• Assist consumer segmentation and targeting efforts by accessing data from two waves of primary research conducted in August 2008 and April 2009

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