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Press Releases

K-Sale Discovers Potential for Moving Towards A Digital Economy

Division
Ministry of SMEs and Startups
Date
2020.10.07
Writer
MSS
File
Hit
42
Headline
- Minister Park Young-sun announces progress results for K-Sale(6.26~7.22)

- “We saw potential for digital innovation for small business owners, self-employed, traditional markets.”

- Participation of popular celebrities including soccer player Park Ji-sung, Jung Dong-won, NCT Dream, etc. After visit by NCT Dream, fans ordered the store products in bulk, in Seomun Market, Daegu.

□ Positive effect on the recovery of consumer sentiment which had been slowed down by COVID-19

   * Untact sales of 25.9 billion won, sales of traditional markets increased by 10.7 percent, and that of local markets increased by 7 percent

   * 7.3 percent increase of payments made with Zero Pay, sales of department stores rose by 4 percent, sales decline of large supermarkets slows down

   * Credit and check card transactions increased by 4.6 percent to 38.3 trillion won (from the same period last year of 36.6 trillion won)

□ From the second half of this year, "Focus on accelerating transitions to a digital economy where even stores in remote areas can go to global market"

  * ❶ Realize “Smart Korea” through intensive fostering of smart stores and smart commercial areas

    ❷ Strengthen support for online untact sales such as live commerce of small business owners

    ❸ In December, maximize the scope of K-sale through nationwide expansion of the “Christmas Market”
K-Sale(also known as Korean Donghaeng Sale), held from June 26 with the aim to stimulate domestic demand that has stagnated due to the COVID-19 pandemic, successfully ended on July 12.
 
On July 15, six government ministries* including the Ministry of SMEs and Startups, jointly announced results of the 17-day event, K-Sale (Briefer: Minister of SMEs and Startups, Park Young-sun).
*Ministry of Economy and Finance, Ministry of Culture, Sports and Tourism, Ministry of Agriculture, Food and Rural Affairs, Ministry of Trade, Industry and Energy, Ministry of Oceans and Fisheries, Ministry of SMEs and Startups
 

A total of 10,597 products were sold through untact distribution channels such as online promotions, TV home shopping, live commerce, etc. reaching 25.94 billion won in sales.
 
In case of K-Sale online promotions, a total of 10,296 products were sold through four types of distribution channels – private shopping malls (16*), Dongbanmall platform, online promotion pages specially arranged for young business owners (11Street), online promotion pages for traditional markets, etc. resulting in total sales of 8.1 billion won.
*(Participating shopping malls) We Make Price, Tmon, Gmarket, Auction, 11Street, Lotte On, CJ Mall, Half Club, Boribori, Oasis, G9, SSG.com, Interpark, G-Fresh, Farmer Story, and Coupang
 
Seven TV home shopping companies including Lotte, Gongyoung, CJ, Hyundai, GS, NS, and Home and Shopping sold 98 types of products, resulting in total sales of 16.74 billion won. Especially, Gongyong Home Shopping achieved positive results by selling out 30 of its 39 products.
 
K-Sale also served as a good opportunity to test a new form of sales promotion, live commerce, in the rapidly changing consumer economy amid COVID-19 pandemic.
 
During K-Sale period, consumers were able to see and purchase a total of 203 types of products across 7 event sessions – 6 local on-site events and the Special Event live commerce (July 1~July 3) – of them, 39 products were sold out.
 
Live commerce has opened a new chapter of “K-Sale,” by combining K-quarantine – a successful model developed for combating the COVID-19 pandemic – and other K-brand. From July 10 to 12, popular Chinese influencers (Wanghong) were invited and live commerce sessions were held in three locations, Seoul, Changwon and Chengdu in China, which had a cumulative audience of 1.75 million viewers.
 
For MNK Korea and Mahanaim Co., Ltd., companies that have participated in the live commerce, negotiations are underway for their products to be supplied to Wanghong and be sold regularly.
 

 
Company Name
Main Items
Main Details
Image
MNK Korea
Skincare products
· Founded in 2015
· Located in Yeonsu-gu, Incheon
· Uses "supercritical fluid" which has advantages of both liquid and gas; can deliver and spread product quickly
Mahanaim
Food
· Founded in 2014
· Located in Jung-gu, Seoul
· Manufactures convenience food made from 30 raw materials including grains, vegetables, fruits, seaweeds, mushrooms, etc.
 
Offline distribution channels such as traditional markets also recorded rise in sales when compared to pre K-Sale.
 
Sales of traditional markets increased by a daily average of 10.7 percent when compared to pre K-Sale (June 19~June 25) and the number of visitors rose by 12.1 percent. After K-Sale, figures for both sales and visitors of traditional markets have shown solid growth, especially during the last weekend (Friday, Saturday and Sunday) by more than 15 percent.
 
As part of K-Sale, more than 4,000 “Good Supermarkets (good-super.com)” located across the nation have also seen meaningful results.
 
The Ministry of SMEs and Startups, Ministry of Agriculture, Food and Rural Affairs, and Korea Agro-Fisheries & Food Trade Coporation (aT) held hands to directly purchase 287 tons of goods including onions, potatoes, etc. that are struggling in sales due to COVID-19 outbreak. They were sold at low prices at Good Supermarkets and sales of participating stores increased by 7 percent YoY.
 
The amount of payments made with Zero Pay increased by a daily average of 7.28 percent (242 million won) when compared to pre K-Sale (June 19~June 25). This shows the effect of K-Sale’s payback event where for Zero Pay purchases of more than 5,000 won, 5 percent of the payment amount were refunded.
 
Sales of three major department store brands rose by 4.0 percent YoY and that of three major large supermarket brands continued to decline since February 2020 but the decline significantly slowed down to 1.4 percent YoY, analyzed as effects of K-Sale.
 

(Unit: %)

 
The amount of approved credit & check card transactions in Korea, indicators of the overall consumption flow during the K-Sale period, reached a total of approximately 38.25 trillion won, up 4.56 percent from the same period last year.
 

(Unit: 100 million won, %)
Period of K-Sale
(6.26~7.11)
Same Period in the Previous Year
(’19.6.28~’19.7.13)
Approved Amount
Percentage Change
382,524
365,834
4.56
*Considering that days of the week act as an important variables when it comes to consumers' credit and check card use patterns, same days of the week were set for comparison
 
Along with K-Sale, the Korean government's continuous efforts for the revitalization of domestic demand continued and they can be seen in many areas. Among them, Korea Gourmet Week (July 3~July 30) and Food Festa (July 1~September 17) are held in connection to promote dining out.
 
The Ministry of Culture, Sports and Tourism launched “2020 Special Travel Week” which runs from July 1 to July 19 and plans to promote safe domestic tourism with prevention and safety as top priority.
 

K-Sale was arranged to introduce products of small and medium-sized companies as well as small business owners to the global market and also, to motivate them embrace and get used to the digital economy through online untact sales such as live commerce, QR codes, etc.
 
There have been remarks that a new field of “K-Sale” – a combination of K-pop and K-brand –has been created amid thorough preventive measures. Following the emergency disaster relief funds issued out from May, K-Sale is a continuation of the many efforts taken to stimulate domestic demand.
 
With massive discount and promotion events across online and offline distribution channels, K-Sale – which has brought in participation of all economic units from traditional markets, small businesses, to large conglomerates – provided consumers with opportunities of rational consumption as well as time for relaxation and comfort in order to overcome COVID-19.
 
Discounts and promotional events were held in 633 traditional markets, approximately 4,000 local grocery stores, around 550,000 Zero Pay-affiliated stores, large distribution and manufacturing industries, agriculture, livestock, and fishing industries, travel industry, restaurants, etc.
 
Starting with Busan and Daegu on June 26, on-site events were consecutively held for a total of three sessions across six regions* nationwide. *Busan, Daegu (6.26~6.28) → Jeonju, Cheongju (7.3~7.5) → Changwon, Seoul (7.10~7.12)
 
In particular, the Special Event with untact live streaming was held from July 1 to 3, confirming the possibility of success for K-Sale, a combination of K-pop and K-live commerce.
 
On July 3, the K-Sale Sungnyemun Special Event in collaboration with K-pop, was broadcasted live throughout the nation and worldwide via YouTube and Naver VLIVE. It recorded a total of 840,000 viewers, 45 million likes and 150,000 real-time comments, and received fervent responses.
 
The “Donghaeng Butterfly Challenge”*, a digital campaign aimed to stimulate nationwide participation for K-Sale, was also a great success. Along with Brand K’s PR ambassador, soccer player Park Ji-sung, baseball player Park Chan-ho delivered a video message supporting small business owners and traditional markets.
*Upload on TikTok, videos of challenge participants doing the “Butterfly Dance” (which represents K-Sale’s main logo image) to “Trot Prince” Jung Dong-won's song “Donghaeng”
 
As of July 16, a total of 4,160 TikTok Challenge videos have been uploaded with 9 million views, and 4.21 million views on YouTube.
 
In addition, seven ministers including the Minister of Economy and Finance, Minister of SMEs and Startups, etc. participated in the live commerce sessions, core of a digital consumption economy, and accomplished significant results of products selling out.

The appearance of Minister of Economy and Finance was also a popular topic, with maximum number of concurrent users reaching approximately 7,300 people.
 
Meanwhile, the total number of viewers for live commerce broadcasts during the K-Sale period reached about 430,000 viewers.
*Ministry of SMEs and Startups (6.26) → Ministry of Oceans and Fisheries, Ministry of Gender Equality and Family (7.1) → Ministry of Economy and Finance (7.2) → Ministry of Trade, Industry and Energy, Ministry of Agriculture, Food and Rural Affairs (7.3) → Ministry of Environment (7.10)
 
On June 28, PR ambassadors NCT Dream visited Seomun Market in Daegu to support small business owners. After their visit, there have been bulk orders from fan clubs, increase of visits by younger customers, etc. NCT Dream has successfully carried out their roles as PR ambassadors.
 
◾ Sungwonsa (Apparel): Sales and inquiries for purchased goods by NCT increased by more than 30 percent, bulk orders from fan clubs, etc.
◾ Little Bean (Coffee): Daily sales rose by 50,000 won following an increase of younger visitors
◾ Gold Bold (Arts and Crafts): 10 percent rise in sales after increase of visits by fans in Korea
 
The 17-day journey was completed with “K-Sale with MiniCon,” held at COEX in Samsung-dong, Seoul from July 10 to 12. Online and offline sales of products by small and medium-sized businesses, Brand K, etc. were promoted through live commerce sessions and offline sales zone in Dongmun Plaza. Messages of hope and comfort were sent to the public and small business owners by holding concerts centered around three different themes* (300 heroes who have helped overcome the COVID-19 crisis were invited to the concerts)
* Public concert (7.10) → Healing concert (7.11) → K-Pop concert (7.12)
 

“Based on our achievements and experiences of K-Sale, we will focus on fostering smart stores and smart commercial districts starting from the second half of this year to bring about ‘Smart Korea’. Also, we will support online untact sales such as live commerce for small business owners and focus on accelerating transitions to a digital economy where stores in remote areas can go to global market. In December, we will expand participating areas of culture-infused K-sale through nationwide expansion of ‘Christmas Market for small business owners’,” said Park Young-sun, Minister of SMEs and Startups.