Rising Prices Bring 'This' Instead of 'New Items'... The 'Jjantech' Trend Blows

Rising Prices Continue... Electricity and Gas Rates Also Increase
More 'Jjantech' Shoppers Buying Near-Expiry, Overstock Items
High Dining and Delivery Costs Lead to Reduced Delivery App Use
Price Increases Expected to Persist... Experts Say "Jjantech Will Also Continue"

As high inflation continues, the number of 'Jjantech' people who save on living expenses by purchasing affordable products is increasing. [Image source=Yonhap News]

[Asia Economy Reporter Kang Woo-seok] #. A housewife in her 50s, Ms. A, has recently decided to embark on 'Jjantech' (a combination of 'Jjandori' meaning frugal person + 'Jae-tech' meaning financial technology) amid soaring inflation. Her chosen method is to buy 'off-season' products. For groceries, she purchases items with slight defects. Although these are not top-quality products, their relatively low prices help save on living expenses. She stated, "These days, with rising living costs and electricity bills, I feel the need to be more frugal. I plan to maintain this consumption habit for the time being."

The recent inflation situation is at an emergency level. According to Statistics Korea and others, the consumer price inflation rate has been rising for five consecutive months this year. In particular, the May inflation rate was 5.4%, the highest since August 2008 (5.6%) during the global financial crisis. The economic hardship index, calculated by adding the consumer price inflation rate and the unemployment rate, was 8.4 (consumer price inflation rate 5.4%, unemployment rate 3.0%), the highest since May 2001 (9.0).

Public utility fees such as electricity and gas are also being raised one after another. On the 27th, Korea Electric Power Corporation and the Ministry of Trade, Industry and Energy announced that the third-quarter electricity rates, effective next month, will increase by 5 KRW per kWh (kilowatt-hour). Originally, the maximum quarterly increase was 3 KRW per kWh, but due to the surge in international energy prices and KEPCO's deficit, the system was revised to raise the price to the maximum annual increase limit of 5 KRW. Residential and general-use city gas rates will also increase by 1.11 KRW per MJ (megajoule) starting in July.

As prices rise across the board, consumers are increasingly distressed, while on the other hand, more consumers are trying to overcome the high inflation phase through 'Jjantech.' Instead of new products, they purchase relatively inexpensive items such as products nearing their expiration date, stock, and clearance items to save on living expenses. Some are tightening their belts by reducing the use of delivery services that incur delivery fees. These consumers are called 'Jjantech-jok' (Jjantech tribe).

BGF Retail's convenience store CU is targeting these consumers by operating the 'Green Save' service. 'Green Save' offers products nearing their expiration date, mainly food and beverages, at discounts of up to 70%. On average, 2,000 to 3,000 items per store are subject to discounts.

Convenience store chains Seven Eleven and Emart24 have also partnered with the startup 'Miro Company' to sell products nearing their expiration date through the 'Last Order' application (app) at an average discount rate of 30%.

These services are rapidly increasing in usage amid rising prices.

Tmon's ultra-cost-effective product planning section 'Altteul Shopping' saw sales in May increase by 279% compared to the previous month, growing about threefold. Especially with rising living costs, sales surged mainly in food, living goods, and other daily necessities. 'Altteul Shopping' sells various products that cannot be sold at normal prices, such as items nearing their sales deadline, clearance and stock items, products returned due to buyer's remorse, and sample or trial products.

Lotte Homeshopping is also operating a 'Refurbished Section' on its homepage, selling a variety of products from electronics and furniture to daily necessities, aiming to capture the 'Jjantech-jok' market.

Along with delivery fees, dining-out expenses are also rising, leading to an increase in the number of people reducing their use of delivery services. [Image source=Yonhap News]

Meanwhile, the number of people reducing their use of delivery apps, which they frequently used during the COVID-19 spread phase, is also increasing. According to IGAWorks' proprietary data analysis solution 'Mobile Index,' the number of users of delivery apps 'Baedal Minjok,' 'Yogiyo,' and 'Coupang Eats' in the fourth week of May decreased by 8.2%, 17.2%, and 25.2%, respectively, compared to the first week of March.

The rise in delivery fees and dining-out prices is a major factor. According to Statistics Korea, the dining-out price index last month rose 7.4% compared to the previous year, marking the highest increase since March 1998 (7.6%).

On the other hand, the inflation trend is not expected to subside easily. On the 26th, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho appeared on 'KBS Sunday Diagnosis Live' and said, "International oil prices, raw material prices, and international grain prices have surged, and we are inevitably affected by this," adding, "We can expect an inflation rate in the 6% range in June or July to August."

Experts believe that the 'Jjantech' trend will not fade quickly amid ongoing inflation. Professor Lee Eun-hee of Inha University's Department of Consumer Studies said, "(The recent inflation situation) forces individual consumers to tighten their budgets," adding, "This (Jjantech consumption) is expected to continue, especially among younger generations who face greater economic difficulties, who are likely to participate more actively."

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