If None, Then With Gums... SMEs Seek Survival Through Online Channels

Consumers are using smartphones to search for kitchenware products on the online shopping mall 'Glasslock Official Mall'. Photo by Samkwang Glass

[Asia Economy Reporter Moon Hyewon] Small and medium-sized enterprises (SMEs) and mid-sized companies, which were on the verge of facing a 'peak season disappearance' crisis during the spring new semester and wedding season, are being revived thanks to 'online' sales. They are overcoming the difficult period by compensating for poor offline store performance caused by the spread of the novel coronavirus infection (COVID-19) with increased online sales.

According to the related industry on the 16th, furniture company Hanssem's online distribution sales in February this year increased by about 17% compared to the same month last year. This is because the sales volume of new semester and wedding products sold on open markets as well as their self-operated 'Hanssem Mall' increased.

In particular, sales of daily necessities such as dish racks and cooking utensils surged by 34% compared to the same month last year. Various marketing activities through Hanssem Mall, such as '100% gift for new membership registration' until the end of this month, are being carried out to promote sales.

Samkwang Glass, a company specializing in daily containers, also saw the sales volume of 'Range Cook for Steamed Eggs' and 'Range Cook for Noodles' products sold on the 'Glasslock official mall' triple on average compared to the same month last year. Morning Glory, a comprehensive stationery manufacturing and distribution company, was worried about disruptions to new semester marketing in February and March this year due to COVID-19, but is relieved as the number of customers using the online mall has increased.

A Morning Glory official said, "Although the start of school and university was delayed, online sales are increasing as more students purchase stationery items such as pencils and erasers online."

On the other hand, offline store sales are declining as the floating population sharply decreases due to the spread of COVID-19. A Hanssem official said, "In January, before the spread of COVID-19, the number of contracts from customers visiting dealerships to purchase children's room furniture products increased by about 20% compared to the same month last year due to the new semester effect, but it has been showing a decreasing trend since mid-February."

Typically, March to May is classified as the peak season when sales of new semester and wedding supplies surge. It is a period when furniture, stationery, side dish containers, and small home appliance companies enjoy special demand. However, due to the COVID-19 impact, with school entrance ceremonies and weddings being postponed one after another, offline sales in related industries are expected to continue declining despite it being the peak season.

In fact, as consumers reduce outings due to COVID-19 concerns, department stores and large marts are experiencing sales declines. According to the Ministry of Economy and Finance, as of the end of last month, nationwide department store sales dropped sharply by 30.6% compared to the previous year. During the same period, sales at discount stores such as large marts also decreased by 19.6%. Sales of furniture, daily necessities, and home appliances also fell. According to Lotte Department Store, sales of these product groups from the 19th of last month to the 8th of this month fell by 27.4% compared to the same period last year.

An industry official said, "Although offline sales decreased due to reduced population movement caused by the spread of COVID-19 during the spring new semester and wedding season, online sales have increased, so some small and mid-sized companies are expected to have overall sales volumes similar to or even higher than last year."

This content was produced with the assistance of AI translation services.