FUTURE WATCH
UPDATE ON CONSUMER TRENDS AND LIFESTYLES IN JAPANAND SOUTH KOREA IN LIGHT OF THE COVID-19 PANDEMIC
August 2020

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2

Report Outline•

Introduction•

Executive Summary•

COVID-19 Impact on Consumer
Trends in Japan•

COVID-19 Impact on Consumer
Trends in South Korea© Euromonitor International

Introduction•

Research Overview•

Research Methodology© Euromonitor International

INTRODUCTION / EXECUTIVE SUMMARY / TREND OVERVIEW
4RESEARCH OVERVIEW

Project backgroundCoverage
Global Megatrends:• Ethical living• Middle class retreat (Japan)• Loner lifestyles (Japan,
South Korea)• Shopping reinvented (South
Korea)• Connected consumers(South Korea)• Healthy living (South Korea)• New trends (if any)
Geographical Coverage
•
Japan
•
South Korea

Project Background:In 2019, Euromonitor International conducted analysis of consumer trends in Japan and South
Korea for Business Finland. These studies provided Business Finland with an understanding of
the key economic, demographic, social and industry trends that were shaping Japanese andSouth Korean societies.
COVID-19 has become a major disruptor, with an immense impact on consumers, businesses
and governments. Business Finland would like to understand what impact COVID-19 is having
on Japanese and South Korean consumers, what is the “new normal”, and which previously
identified trends may have become more powerful or less relevant due to COVID-19.

Research Objectives:
Business Finland would like to:

Understand the current economic and market environment in Japan and South Korea;
Revise the findings of the previous studies and understand what impact COVID-19 ishaving on trends that were identified in them;
Understand what new trends are emerging in Japan and South Korea in light of COVID-19,
and how these trends are likely to evolve over the next 3-5 years.

Euromonitor Solution:
 Based on internal data, desk research and local know-how, Euromonitor International will
analyse the impact of COVID-19 on specific megatrends in Japan and South Korea.
 Euromonitor International will examine if any new trends emerged as a result of COVID-19.
 Euromonitor International will deliver a comprehensive report detailing the megatrends anddrivers, as well as the opportunities and challenges shaping up in Japan and South Korea.

© Euromonitor International

INTRODUCTION / EXECUTIVE SUMMARY / TREND OVERVIEW
5RESEARCH METHODOLOGYEuromonitor International used in-house information, survey findings and desk research
to analyse consumer trends in Japan and South Korea

Desk Research Euromonitor International’s internalreports and consumer lifestyles
survey data.
 Desk research on national statistics,
online articles and publications tounderstand the consumer trends,
buying behaviour and innovative
products and services in Japan andSouth Korea market.

© Euromonitor International

Analysis
 Triangulation of all sources andinformation gathered to validate anddistil insights on consumer
behaviour, preferences, habits andinterest level in the identified
megatrends.
 Production of final deliverables.

Executive Summary•

Economic Overview•

Industry Overview•

Key Trends•

Challenges•

Opportunities & Recommendations© Euromonitor International

INTRODUCTION / EXECUTIVE SUMMARY / TREND OVERVIEWJapan - economic overview amid COVID-19

Pre-COVID-19: 0.62%
Baseline: -5.84%
Status: 17 July 2020
Total cases: 23,739
Active: 4,025
Recovered: 18,729
Deaths: 985

•

•

•

Japan has so far avoided the devastating public health crises seen in
many other countries, despite no compulsory lockdown, thanks to themany precautionary measures taken by residents and businesses.
The tax rise in October 2019 and the disruption to economic activity
caused by COVID-19 will result in a sharp decline in GDP in 2020. The
economic outlook will depend on the success of the stimulus package
in response to the financial crisis resulting from COVID-19.
Consumer sentiment is weak due to financial insecurity. The poor
economic situation has affected job security, reducing overall
consumer income in the mid term.

COVID-19 impact at a glance•

The COVID-19 pandemic has had a huge impact on
the packaged food market. Due to home seclusion,home cooking is more frequent, leading to robust
growth in time-saving packaged food, such as frozen
food and ready meals. The stockpiling of staple
packaged foods in order to reduce the frequency of
shopping has been widely seen, while online
grocery sales have seen a surge as consumers seek
to avoid the risk of infection.

•

Beauty and personal care has seen a strong negative
impact from COVID-19, due to its heavy reliance on
inbound tourists. Increased working from home has
also reduced the use of make-up items. Beauty andpersonal care players will need to explore newsources of demand among local consumers; forexample, the development of foundation thatprevents dirt from masks is gaining attention.

•

Consumer health has seen a slightly negative impact
from COVID-19 due to less reliance on over-thecounter healthcare products from uncertainty of
COVID-19 symptoms and potential severity ofdiagnosis. On the other hand, dietary supplements
benefited from consumers’ awareness of
preventative health.
© Euromonitor International

Beauty and Personal Care and Packaged Food Scenario Forecast for Japan:
Industry Level Retail Sales 2019-2020, % growth, 2019 constant prices

Beauty andPersonal Care

Packaged Food

Consumer HealthBaseline

-4.0%

10.6%

-1.0%

C19 Pessimistic1

-4.4%

10.2%

-1.6%

C19 Pessimistic2

-5.8%

9.6%

-2.6%

C19 Pessimistic3

-5.9%

8.9%

-3.9%

Pre-C19 Forecasts

1.7%

0.8%

0.5%

Source: Euromonitor COVID-19 Economic Scenario Model, Last updated on 16 July 2020 at 05.39PM GMT

INTRODUCTION / EXECUTIVE SUMMARY / TREND OVERVIEWCOVID-19 brings drastic lifestyle changes in various ways in Japan

1

2

3

Ethical Living
COVID-19 has highlighted the importance of ethicalliving to our society, with strong interest in food waste,
supporting local business etc. People have a desire toshare they value businesses and have empathy with
them.

4

Connected Consumers

5

Healthy Living

Middle Class Retreat
With deteriorated consumer mood amid COVID-19, theJapanese became further budget minded, which has led
to spending more carefully. On the other hand, theadoption of working from home is accelerating, which
creates new demand for co-living and work space.

Loner Lifestyles
The solo economy became not only for single
people but there is increasing desire to secure timealone amid home seclusion with family members.
Since working from home is becoming morecommon due to COVID-19, people have started toseek more comfortable environments for living andworking.

Digitalisation in Japan is accelerating, with a 94%(Source: Digima-Japan) internet penetration rate in2019. COVID-19 puts further reliance on digitaltechnology across all generations, for example
expanding digital payments, working from home andusage of SNS, e-commerce shopping, online diagnosis
etc.

COVID-19 increased health and hygiene awareness in Japan.
Although the Japanese were already health conscious,
preventative health became top of mind. Apart from wearing
mask and washing hands more frequently, many consumers
are relying on digital self-care solutions and attaching more
importance on boosting immunity, which has positively
impacted demand for immune-boosting foods such as
fermented foods etc.

Challenges© Euromonitor International•

COVID-19 caused a further dip in consumer sentiment in Japan,
making consumers more price conscious. High-price products/
services now find it more difficult to reach a mass consumer
base. Hence, it is essential to accurately identify the target
customer.

•

Since global supply chain risks have been exposed by COVID-19,
people have started to re-consider the importance of local
production for local consumption again in order to maintainlocal businesses, which may result in some obstacles for foreigncompanies to entering the market in the current situation.

•

Ethical consumption is likely to gain more attention in the postCOVID-19 era. However, compared to Finland, Japanese
consumers lag behind in their public awareness ofenvironmental issues, which will take some time to change.

•

Constant aggressive innovation and product development is key
for Japan to sustain and grow businesses. Under such a businessenvironment, Japanese consumers are spoiled for choice andtend to jump on new trends one after another and become boredvery quickly. Brands are required to stay competitive in this fastpaced environment.

Opportunities &Recommendations© Euromonitor International•

COVID-19 has raised the importance of ethical living to support
the society in Japan. Since Scandinavian-made products are
generally well perceived as having better quality and being
ethically manufactured, Finnish brands can take advantage tooffer such products/services with ethical messages and visions.

•With increasing adoption of working from home, there is a strong
desire to create a comfortable living and work space at home.
Finnish brands can tap into this new field to help with
consumers’ needs by offering high-quality items and suggesting
stylish co-living and work spaces (e.g. furnishing goods, furniture,lighting, etc) for both single and family use.

•

With growing interest in food waste and problems associatedwith plastic bags, there is an opportunity to offer innovative
products to tackle this issue.

•

Accelerating digitalisation provides more opportunity topromote Finnish goods/services to target consumers in Japan byutilising social media marketing and effective digital tools.

•

Self-care health solutions gain more attention in Japan. There isan opportunity to provide better solutions for both mental andphysical problems, such as digital health tools, therapeutic
goods/services, immune-boosting foods, dietary supplements,
Finnish saunas, etc.

INTRODUCTION / EXECUTIVE SUMMARY / TREND OVERVIEWSouth Korea - economic overview amid COVID-19
Pre-COVID-19: 2.0%
Baseline: -0.6%

Status: 16 July 2020
Total cases: 13,672
Active: 919
Recovered: 12,640
Deaths: 293•

Due to the government's swift action, South Korea was able to contain theimpact of the COVID-19 outbreak. Infected people were quickly identified,
and those who had been in contact with them were recommended to betested even if they had no symptoms. As a result, the number of infectedcases declined rapidly, and since the beginning of May, it has stood at
approximately 50 cases a day.

•The economy is expected to shrink in 2020 because of the impact of COVID19 on industries and businesses. The total household income is decreasing
due to the higher unemployment rate caused by the pandemic. Manycompanies in travel and hotel start to go bankrupt due to the common
infection concerns amongst consumers.

COVID-19 impact at a glance•

The COVID19 pandemic has had a substantial impact
on the packaged food, consumer health and beautyand personal care industries. As foodservice outlets
have been shut down, occasions for dining out havebeen replaced by dining at home. Due to the lack ofcompetition from consumer foodservice, thepackaged food industry has witnessed significant
growth in sales.

•

South Korean consumers utilize fewer make-up
products in the wake of COVID-19 as they must wear
masks when they need to go out. However,consumers are aware of the importance of
maintaining their personal cleanliness and hygiene
to prevent the spread of the virus, and are washing
their hands more frequently, thus liquid soap(including hand sanitisers) and bar soap have seen
substantial increases in demand.

•

As COVID-19 emerged, immunity enhancement was
re-examined. Therefore, interest in consumer healthproducts has also increased. In particular, products
such as red ginseng are ultimately recognised bycustomers as a means to boost immunity. As a result,the growth of consumer health products is expected
to be positive in 2020.
© Euromonitor International

Packaged Food and Consumer Health Scenario Forecast for South Korea:
Industry Level Retail Sales 2019-2020, % growth, 2019 constant prices

Baseline
C19 Pessimistic1
C19 Pessimistic2
C19 Pessimistic3
Pre-C19 Forecasts

Beauty and Personal Care
0.1%
-0.5%
-1.3%
-2.3%
0.6%

Packaged Food
3.3%
2.8%
2.1%
1.3%
0.3%

Consumer Health
2.9%
1.9%
0.4%
-1.5%
2.9%

Source: Euromonitor COVID-19 Economic Scenario Model, Last updated on 16 July 2020 at 05.39PM GMT

INTRODUCTION / EXECUTIVE SUMMARY / TREND OVERVIEW

Digital lifestyles and more attention to health and wellness are the major changes among
South Korean consumers amid COVID-19

1

2

3

Shopping Reinvented
COVID-19 resulted in a significant surge in thepreference for shopping online. Many companies are
putting more resources in expanding product lines togenerate more growth from e-commerce. Competitive
pricing, contactless and timely delivery, and availabilityof more options are the major drivers for online sales.

4

Healthy Living

5

Ethical Living

Loner Lifestyles
Product innovation to cater to loner consumers has
accelerated. Many food companies are launching
ready-to-eat, easy-to-cook single-serving foodproducts. Due to COVID-19, loner living, loner
camping and loner trips are expected to grow more.

Connected Consumers
The lines between home, work and leisure areblurring. Due to COVID-19, there is a significant
decline in new physical foodservice outlets opening.
Rather than physical restaurants, consumers preferto order their daily food via delivery food apps. As aresult, companies are now focusing more on
delivering greater convenience with digitaldevelopment and a better shopping experiencethrough online platforms.

People are paying more attention to their health after
the outbreak of COVID-19. With growing awarenessand concerns, demand for health supplements andhealth hygiene products has grown significantly. Due
to COVID-19 preventative health and herbal products
such as red ginseng, which is well known for its
immunity-boosting properties, have become widely
popular among all age groups as health supplements.

Pre-COVID-19, ethical living was more focused towards
environmental issues. However, after the outbreak of
COVID-19, South Koreans are more concerned about society
and focusing on how to solve social issues together byprioritising certain actions. Although the environment
remains a priority, at the same time, with social distancing
the sharing economy is not appropriate in this situation.
Thus, it is expected that the question about how to live
responsibly will be the main theme in the near future.

•Even if South Korea’s COVID-19 situation stabilises, recovery oftravel industry-related businesses such as hospitality, travel
and tourism is expected to take time due to uncertain
conditions across the globe.

•

In addition, it is expected that the negative impact will continue
to persist in the duty-free retailing market including luxury
goods, cosmetics and alcoholic drinks, which generate sales via
tourists.

•

In order to maintain local businesses and to foster economic
recovery, the government has highlighted the importance of
local production for local consumption, which means it may bedifficult for overseas businesses to expand or enter the market
in this situation.

•

The prospects for the events industry are not promising. South
Korea is a country with high internet and smartphone usage,
and as an alternative option, fairs and events, which wereformerly held at physical locations, are now being held online todemonstrate new products conveniently via online platforms.

Challenges© Euromonitor International

Opportunities &Recommendations© Euromonitor International•

Compared to neighbouring countries, South Korea is expected
to experience a faster rebound in terms of its economy. At thenational level, attempting to deal with the COVID-19 outbreakbecame a major task, and through the aid of national emergency
relief funds, it promoted an early return to daily life. The fasterrecovery is a positive sign for Finnish brands to put more focus
on South Korea in the region.

•

Grocery, packaged food, and beauty and personal care products
companies had already created user-friendly online websites
and apps, so they have managed to retain their sales following
the COVID-19 outbreak. Finnish brands can leverage online
platforms to promote their products.

•

Furthermore, the mobile games industry is also expected tocontinue to grow. With the high penetration of smartphones, it
is anticipated to maintain gradual growth due to the influx of
new user groups with growing interest in online games due tothe COVID-19 lockdown situation. Finnish companies canpromote their gaming products via various social media
platforms.

•

A positive outlook is also expected for health and hygiene
product businesses. Personal hygiene related products, such as
hand sanitisers, become daily necessities and are seeing big
potential. Moreover, as the interest in boosting immune systemis growing, consumer health-related products are expected towitness strong growth.

COVID-19 IMPACT ON
CONSUMER TRENDS IN
JAPAN

•

Ethical Living•

Loner Lifestyles•

Middle Class Retreat•

Connected Consumers•

Healthy Living© Euromonitor International

INTRODUCTION / EXECUTIVE SUMMARY / TREND OVERVIEW

MEGATRENDS AND SUBTRENDS IDENTIFIED FOR BUSINESS FINLAND

Japan - Megatrends and sub-trends impacted by COVID-19
Ethical Living

Middle Class
RetreatLoner Lifestyles

Connected
Consumers

Healthy Living

Sub-trend

Sub-trend

Sub-trend

Sub-trend

Sub-trend• “Mottainai”• Ethical spending• Increasing
publicawareness• Saving money• Thoughtful
consumption• Living first• Spending timealone
• Solo economy• Lifestyle change• Digital life
• Shift to workfrom home• Digital
payment• Mental
wellbeing• Boostimmunity• Digital healthCOVID-19 IMPACT• Mutual support: More consumers

WIP

started to re-consider the importance of
ethical living to support local society• Interest in social contribution:
Many local businesses impacted by COVID19 are supported by crowd funding• Concern about food waste:

ETHICAL LIVING

Increasing interest in reduction of foodwaste among business operators andconsumers

DATA INDICATORS

52.2%

Of survey respondents in Japan reduce plastic
use in 2020

52.5%

Of survey respondents in Japan reduce foodwaste in 2020

17.7%

Of Japanese consumers make their purchasing
decisions based on brands/companies socialand political beliefs in 2020

Mindful consumption brings happiness to consumers who share the same values
Many manufacturers who relied on global supply chains have suddenly been forced into unprecedented crisis. Given ethical living, the current situation
may provide a valuable opportunity to reset or slow down societies’ excessive consumption. Given the insecure outlook and potential hardships ahead,
there is growing interest in mindful consumption to support and revitalise local economies. Consumers are placing more importance on spending
money on something to share the same value and to show empathy with their vision and the message offered, which gives them a sense offulfilment. Amid COVID-19, many businesses facing crisis have been supported by crowd funding, including foodservice, entertainment, arts and culturalvenues, local businesses, etc. The issue of food waste is also highlighted due to supply chain blockages and food often wasted due to cancellation of events,
etc. Many consumers are now happy to support by purchasing products directly via online platforms to maintain domestic businesses.

INTRODUCTION / EXECUTIVE SUMMARY / TREND OVERVIEWSupporting together became key to overcome the crisis amid COVID-19

WIP

Mottainai
Amid COVID-19, there is increased food waste stemmingfrom the cancellation of school lunches, banquets and events
etc and the lockdown period impacting the foodservice
sector etc, which has required emergency measures toreduce food waste. Many web-based platform apps (e.g.
Savejploss, #sosmapjapan, Wakeari etc) were introduced toconnect producers/food operators with consumers directly,
which helped farmers and local businesses. According toConsumer affair agency, Japan had over 6 million tonnes offood waste in 2018. The government has set the target to
reduce food waste to 4.9 million tonnes (half of the amountof food waste in 2000) by 2030.

Ethical spending

Increasing public awareness

There is growing interest in ethical consumption withJapan faces large-scale natural disasters each year. Ongoing
consumers spending money to show support for or empathy climate change sees people increase their awareness ofwith people, services, shops, companies and regions etc
environmental issues. COVID-19 has also highlighted theamid the COVID-19 hardship. Many of them are highly
importance of life on earth in terms of people’s lives. Whilesatisfied with their spending due to helping and empathising seeking convenience, people/ industries have started towith someone/something. For example, total amount oftackle the issues of food waste and plastic pollution etc. For
crowd funding support by Campfire (major crowd funding
example, there will be a charge for plastic bags in stores incompany) increased 5.9 times more in May 2020, compared Japan from July 2020.
to May 2019, with over 2,800 projects related to COVID-19.

COVID-19 IMPACTDATA INDICATORS• Falling household budgets amid
COVID-19: COVID-19 has resulted in job

23.1%

insecurity and losses, thus reducing
consumer income• Selecting products carefully: With
low consumer sentiment, consumption
behaviour became more selective andcareful

MIDDLE CLASS RETREAT• Increasing adoption of working
from home: The government is
promoting the adoption of working from
home, resulting in new lifestyles

Of Japanese consumers would like to findbargains in 2020

17.7%

Of Japan consumers prefer to buy fewer, buthigher quality things in 2020, which isdecreased by 3.6% from 2019 (21.3%)

5.5%

Of Japanese consumers regularly seek strong
or well-known brands in 2020, which decreaseby 0.3% from 2019 (5.8%)

COVID-19 brings more price-conscious mindset and new lifestyles
Since more people are experiencing a decline in income and saving amid COVID-19, consumer confidence has fallen to its lowest level.
While consumers are becoming more careful in their spending, they also seek small indulgences to enjoy at home and make their living
more comfortable, at least, and for relieving stress. For example, sales of luxury food (e.g. high-end confectionery, premium branded beefetc.) are popular. Demand for functional air cleaners is high. COVID-19 also brings new lifestyles by promoting working from home inJapan. Many people, especially those who live in urban areas, are struggling to create living and workspaces in small housing units. They
therefore seek more comfortable living and workspaces, which is likely to create new demand in the post-COVID19 period (e.g. houserenovations, functional furniture, moving to more spacious houses in suburban areas, etc).

INTRODUCTION / EXECUTIVE SUMMARY / TREND OVERVIEW

Middle class consumers are more careful when spending, but find fun in a restricted world

Saving money
Japanese consumer sentiment had already hit a low pointdue to the tax hike in October 2019. COVID-19 further
affected the dip in consumer mood. More people are trying
to reduce unnecessary expenditure while their spending
increases to purchase food, daily essential items and utilities,
impacted by COVID-19. Many household budgets are
becoming tight and many are saving money as much as
possible given the uncertain future outlook.

Thoughtful consumption

Living first

Since consumer sentiment has deteriorated amid COVID-19, The increasing adoption of working from home encourages
people to consider improving their living and working
consumers are choosing products more carefully. For
example, many consumers are price sensitive and seek value environments at home. Many people are struggling to secure
their living and working spaces in small houses in urban
for money, although they are also happy to spend extra if
areas during home seclusion with family members. Morethey feel it is worth it. Amid COVID-19, they try to makepeople have started to prioritise more space, the surrounding
astute decisions and spend extra for products that offer
small indulgences (e.g. delicious confectionery and premium environment and floor plans to seek more comfortable living
than worrying about the distance to the office. For example,
branded meat, etc.), which add spice to tedious lives in
Nitori (major furniture, household goods retailer) increased
quarantine and at least be able to enjoy home life.
its net profit by 25% in Mar-May 2020 compared to Mar-May
2019.

COVID-19 IMPACTDATA INDICATORS

18.7%• Home seclusion with quarantine:
People are requested to stay at home tominimise the risk of infection under thestate of emergency

Of Japanese survey participants mentionedthat time with partner or spouse is important
for their happiness in 2020

10.3%

• Digitalisation: The use of social media,
online games, video streaming services etc
supports their solo lifestyles amid COVID19

Of Japanese survey participants mentionedthat they would like to have a strict boundary
between work and personal life in 2020

• Growing single household group:

LONER LIFESTYLES

Products/services for single users continue
to see high demand

38.6%

Of Japanese survey participants mentionedthat time for themselves is important forhappiness in 2020

Solo economy remains active as singles will continue to be a large consumer group in JapanThe COVID-19 pandemic has forced singles to be self-isolated at home. While singles feel further alone due to working from home and avoiding nonessential outings, many of them appear to feel good about staying at home alone due to lower risk of infection, less stress and secure free timealone. Many of them try to find enjoyment via digital connection, which offers various forms of hometainment (online games, video streaming services,
SNS etc). The solo economy became not only for single people but there is increasing desire to secure time alone amid home seclusion with family
members. Since working from home is becoming more common due to COVID-19, people have started to seek more comfortable environments for living
and working. For example, there are new developments of residences with shared offices and co-living sharing service platforms across Japan. PostCOVID-19, single’s lifestyles may become more flexible for living and working.

INTRODUCTION / EXECUTIVE SUMMARY / TREND OVERVIEWJapan offers various solutions for single consumers

Spending time alone

Solo economy

The solo economy remains active amid COVID-19. Not
In quarantine under the state of emergency in Japan,
only for single people, but products/services for single
singles spend much time alone watching movies via
use have also received attention due to the desire tovideo streaming services such as Amazon Prime,
secure free time alone amid home seclusion and
Netflix, Hulu etc. and playing video games. For example, reduce the risk from infection. For example, playing
Animal Crossing: New Horizon video game bygolf for singles, various kitchen appliances (riceNintendo recorded the fastest sales growth since its
cookers etc.) for singles by Village Vanguard, Bocchi
launch in March 2020, with its popularity underpinned indoor home tent (personal workstation tent) by
Bauhutte, meal kit service for single servings by
by the game having a soothing effect and allowing
Yoshikei etc., have gained attention.
players to interact with other players.

Lifestyle change
The COVID-19 pandemic is encouraging companies toadopt working from home practices. A study by
Biglobe reported that 80% think that working fromhome will take hold in Japan post-pandemic. Over 50%
are considering moving house due to working fromhome to seek more comfortable and wider space.
Single households tend to live in small home units inurban areas.

COVID-19 IMPACTDATA INDICATORS• Growing ownership ofsmartphones: Smartphone ownership

6.6%

reached 90% in Japan as of January 2020

• Digitalisation: With government
initiatives, the penetration of working
from home and digital payment isaccelerating• Hometainment: Home has become theConnected Consumers

hub for everything (working, living,socialising) via online amid COVID-19

Of survey participants in Japan do not own or
have access to any of the consumer appliancesin 2020

71.1%

Of survey participants in Japan browse theinternet almost every day in 2020

17.9%

Of survey, respondents use communication ormessaging applications in 2020

The move towards digitalisation is accelerating in Japan
In order to promote a contactless society amid COVID-19, digital life is accelerating in Japan. Although prior to COVID-19 working from home was notcommon in Japan, the government started to encourage many offices to offer working from home, which rapidly changed working and living
environments. With the spread of working from home, many offices managed to leverage digital technology, which increased the usage of web
conferencing, groupware, cloud storage and remote access systems. The government is supporting further penetration of working from home,
especially for small and medium-sized firms by offering subsidies. Cashless payment is also driven by the contactless mindset, despite cash payment
remaining strong in Japan. COVID-19 has further enhanced the move towards digitalisation, which will create new opportunities in Japan.

INTRODUCTION / EXECUTIVE SUMMARY / TREND OVERVIEWCOVID-19 forces reliance on digital life

Digital life
According to the Digital report in 2019 by We Are Social, theinternet penetration rate in Japan was 94% in 2019. Amid
COVID-19, over 80% of consumers used the internet everyday. Under home seclusion, people rely on digital life, these
digital platforms offer every solution, including work,
drinking occasions, medical diagnosis, lessons forhobbies, entertainment (games, live streaming of concerts)
etc. On the other hand, despite closures of school, thepenetration rate of online lessons at public schools remains
low due to non- availability of laptops and poor connectivity,
which can be a challenging issue in Japan.

Shift to working from home

Digital payment

In order to reduce the risk of infection from COVID-19, theWhile cash remains the leading payment mode in Japan, thegovernment promoted working from home amid thegovernment has set a target to increase the share of cashlesspandemic. Although working from home was not common in payment to 40% by 2025, by giving reward points to people
Japan, the penetration rate has increased from 17% inusing cashless payment from October 2019. In addition to theNovember 2019 to 47% in April 2020 based on a survey by rewards programme, COVID-19 spurred an increase in the
Recruit. The usage rate for web conferencing systems also
cashless payment share, mainly due to the reduced risk ofincreased from 44% in December 2019 to 63% in April
infection and increased online shopping. For example, users
2020. Zoom accounted for 35%, which was the leadingof Pay Pay, the QR code payment app, now exceed 30 million,
share in web conferencing, according to research by MMRI. up from 20 million in October 2019. The number of
The government is further promoting working from home
payments is 8.6 times higher in Q1 2020, compared to Q1
by offering subsidies.
2019. Digital payment is likely to gain further share in Japan.

COVID-19 IMPACT• Increased health/hygieneawareness: People became more
health/hygiene conscious amid COVID-19• Lack of exercise during home
seclusion: People relied on online home
exercise due to restricted outings• Growing interest in fermented
food: Fermented food gains more

Healthy Living

attention for preventative health benefits

DATA INDICATORS

1.9%
Of survey participants in Japan exercise at thegym almost every day in 2020

5.5%

Of survey participants in Japan run or jog
almost every day in 2020

17.9%

Of survey participants in Japan do yoga asstress reduction activity in 2020

Self-care solutions gain importance in healthy living
The majority of Japanese consumers are very health conscious with higher life expectancy. Consumers have become more aware of health andhygiene issues amid COVID-19 by taking precautionary measures such as wearing facial masks, washing hands etc. In the early stages, mask shortages
were evident in Japan. Since then, people have started to make masks themselves. Many manufacturers (non-mask manufacturers) have also started tomake masks, offering more functional masks (e.g. use of swimsuit fabric by Mizuno, AIRism underwear fabric by Uniqlo etc.). Home seclusion has also hada negative impact on both body and mind. Many consumers are relying on digital self-care solutions, which have gained importance in terms of
preventative health. As part of self-care, consumers have realised the importance of boosting immunity, which has positively impacted demand for
immune-boosting foods such as fermented foods etc.

INTRODUCTION / EXECUTIVE SUMMARY / TREND OVERVIEWPreventive health became top of mind amid COVID-19

Mental wellbeing

Immune boosting

Digital healthWith increasing stress levels stemming from anxiety anddepression amid COVID-19, people have tried to overcome
this stress using various methods. Self-care solutions torelieve stress have gained importance in maintaining mental
health such as digital connection with friends/family andonline lessons (yoga, meditation , stretching etc), and taking
dietary supplements to relieve stress and improve sleep etc.

Boosting immunity is considered important to protect
oneself from infection. It is widely recognised that intestinalbacteria activate the immune system, so it is important tomaintain good gut microbiome health, which is related towhat we eat. Foods to boost immunity such as mushrooms,
garlic, fermented foods (natto, yoghurt, cheese, miso etc)
have gained attention. In particular, mushrooms, natto andyoghurt continued to be in short supply and saw increased
sales in Japan amid COVID-19.

There were increasing numbers of infections found at sports
gyms in the early stages of the pandemic. To avoid infection,
the home has become the health hub, which sees consumers
relying on digital fitness solutions. Hence, online exercise
programmes (fitness, dance, yoga etc) increased in demandfor consumers to maintain their health. For example, theinteractive live streaming fitness service, SOELU, became oneof the largest online fitness services in Japan, with more than
100,000 attendees . The government also eased theregulation and broadly allows online diagnosis to prevent therisk of infection at hospitals amid COVID-19.

COVID-19 IMPACT ON
CONSUMER TRENDS IN
SOUTH KOREA•

Shopping Reinvented•

Loner Lifestyles•

Connected Consumers•

Healthy Living•

Ethical Living© Euromonitor International

INTRODUCTION / EXECUTIVE SUMMARY / TREND OVERVIEW

MEGATRENDS AND SUBTRENDS IDENTIFIED FOR BUSINESS FINLAND

South Korea - Megatrends emerging during COVID-19
Shopping
Reinvented

Loner Lifestyles

Connected
Consumers

Healthy Living

Ethical Living

Sub-trend

Sub-trend

Sub-trend

Sub-trend

Sub-trend• Booming
onlinegrocery
shopping• Convenient
dining• Experiential
shopping• Popularisationof single
servings• Being myself• Spending timealone

• “Un-tact”
mental care
• Digital life
• New ways ofworking• Changes inlifestyles• Selfhealthcare• Hometraining• Return todisposable
products• Popularisationof online fairs• Ethical
consumption

COVID-19 IMPACT• Digitalisation: With high internet and••

SHOPPING REINVENTED

smartphone penetration, consumers havea chance to be familiar with online
shopping in this pandemic situation
Government recommendation: To
prevent the spread of COVID-19, thegovernment recommends staying at home,which leads to reduced footfall at offline
shopping malls
Consumer sentiment: With increased
unemployment, people are more cautious
about their spending

DATA INDICATORS

43.7%

Of South Korean consumers make orders at
any time from anywhere in 2020

22.1%

Of South Korean consumers think online
shopping is easy and has extensive reach in
2020

27.9%

Of South Korean consumers would like to visit
shopping malls, which decreased by 5% from2019( 32.9%)

Social distancing and digitalisation have changed South Korean retailing
Digitalisation has changed the way consumers browse and purchase, causing the South Korean retailing industry to experience significant shifts in recent
years. Efforts to constrain the spread of COVID-19 have centred on controlling public gatherings, from encouraging consumers to practice “social
distancing” all the way to non-prioritised businesses being requested to close down for weeks or more. Grocery businesses remained open, as they are
essential, but still suffered from the fact that South Korean consumers were reluctant to visit physical stores due to the virus. Consequently, online
shopping businesses had the opportunity to expand. Online shopping has become the major channel to purchase products across many categories, asSouth Korean consumers increasingly appreciate the convenience of e-commerce, along with the quality of the service.

INTRODUCTION / EXECUTIVE SUMMARY / TREND OVERVIEW

Korean consumers crave a more convenient and safe life during COVID-19

Boom in online grocery shopping

Convenient dining

COVID-19 has contributed to the growth of home
Since the outbreak of COVID-19 in the country, sales
dining, leading to a rapid rise in the use of foodfor online grocery platforms, such as Coupang andMarket Kurly, have increased by approximately 92.5% delivery services. Baemin, a food order app company,
stated the cumulative transaction volume of thecompared to Q1 2019, according to the Ministry ofcompany rose by 270% between November 2019 andTrade. Since these companies provide delivery services March 2020, to two million transactions.
from dawn, consumers who make an order by around22.00-23.00hrs on the previous day will receive their In addition, hotel buffets, such as JW Marriott, Lotteand Westin Chosun, which did not provide delivery or
daily food necessities early in the morning, without
lunch-type services previously, have begun to offer ahaving to visit grocery stores physically.
“to-go” service option, which enables ordered food tobe picked up at the front of the hotel.

Experiential shopping
South Korean consumers expected product and brandexperiences at physical stores, but due to COVID-19,
this expectation was effectively blocked. However,thanks to technology, consumers can experiencesomething similar via virtual reality (VR) or
augmented reality (AR), which shifts the shopping
experience out of a physical location. For example,
according to Lotte Home Shopping recently launched a‘real fitting’ service that allows users to experience
fashion goods in a virtual condition with a smartphone
application.

SCENARIO DRIVERS• Online socialising: To reduce the••

LONER LIFESTYLES

chance of infection, people prefer toconnect with their friends and family
members on online platforms
More time at home: With social
distancing regulations, people are
spending the majority of their time athome
Use of streaming platforms: As thetime spent at home has increased, people
are tending to spend free time streaming
video content

DATA INDICATORS

27.6%

Of South Koreans want to spend time bythemselves in 2020

12.5%

Of South Koreans want to spend their timewith partner or spouse in 2020, decreased by
3.5% from 2019 (16%)

19.3%

Of South Koreans want to spend time for theirfavorite activities in 2020, increased by 0.5%
from 2019 (18.8%)

Due to COVID-19, more South Koreans are leading loner/single lifestyles
In South Korea, the number of people enjoying single lifestyles in their 20s and 40s has increased, which has created a trend to eat and enjoy time alone.
However, following the outbreak of COVID-19, it was essential to self-isolate. In order to reduce the rate of infection, people curtailed unnecessary
appointments and, after spending considerable time at home, started to establish a loner lifestyle. Major South Korean food companies such as Dongwon
and CJ have launched a variety of home meal replacement (HMR) foods to deal with the situation where consumers have to eat all of their meals at
home. Single people spending more time at home has also benefited the mobile games industry, as mobile games can help to relieve stress and boredom.

INTRODUCTION / EXECUTIVE SUMMARY / TREND OVERVIEW

People are used to spending time alone - from eating meals to entertainment

Popularisation of single servings
Since the outbreak of COVID-19, the burden on those
who cook at the home has increased, as office workers
and students have to stay at home. Therefore, large
domestic food companies, such as CJ Bibigo andDongwon, have provided a variety of food products
offering convenient meals at home, ranging fromfamily packages to single-person packages.

Source: https://blog.cj.net/2242

Being myself

Spending time alone

As single consumers have more time to develop their Due to social distancing guidance, the phenomenon of
own identities, they are interested in what makes
spending time alone and finding enjoyment in this has
themselves happier. At the same time, COVID-19
become more prominent. In spring, the number ofaccelerated people to re-consider how to maintaingaming users typically declines, as outdoor activities
relationships in a virtual context. By utilising socialincrease; however, in spring 2020, the number of users
media, South Koreans have made a new culture, which playing mobile games increased by 84% compared tois activity sharing associated with a “challenge”. As
the spring season 2019, according to Unity
one of the prominent examples, the “Dalgona coffee
Technologies’s corporate report.
challenge” enjoyed a boom in South Korea and spreadto other countries via social media channels.

SCENARIO DRIVERS• High penetration rate of digital
devices: According to KBS (Korea
Broadcasting System), South Korea is an IT
powerhouse, and more than 95% of its
citizens have smartphones• Working from home becomes
new normal: As a result of COVID-19,
working from home became far morecommonCONNECTED CONSUMERS• Advent of “hometainment”: The
home is now being used as a space forwork and study, as well as a residence

DATA INDICATORS

11%Of South Koreans mentioned they use an app
to track their health or fitness in 2020

10.1%

Of South Koreans take part in online video
gaming almost everyday in 2020

21.9%

Of South Koreans survey participants said theybought something via a social media platform
in 2020

Digitalisation is essential for South Korean consumers
In order to limit the spread of COVID-19 in South Korea, the government strongly recommended an “un-tact” environment. Un-tact means avoiding
human contact as much as possible. This not only affects individuals, but also companies. Working from home was previously not common in South
Korea, but many companies have started to use it for all employees, which has created a need for a suitable digital environment. Companies haveintroduced cloud services to facilitate the process of working from home, and have also enhanced the video/audio conferencing environment, so
multiple users can enter a virtual room at the same time to hold a meeting. This has led the function of a home to extend beyond being a residence tobeing a work environment and a school. This change may well have an impact on how dwellings are designed and furnished in the future.

INTRODUCTION / EXECUTIVE SUMMARY / TREND OVERVIEW

Thanks to the digital environment, a house is more than just a residence“Un-tact” mental care

Digital life

New ways of working

With the spread of COVID-19, many people lost their jobs,
leading to mental distress and depression. As a way to
overcome depression, Trost - a non-face-to-face
psychological counselling service - proved very appealing tothem. More than 139,000 South Koreans utilise this app for
their mental health, as the service is readily accessible andaffordable.

In the wake of COVID-19, the home is no longer just a
residence. It is now an office, a school, a restaurant and aplace where people can relax. For this reason, interest ininterior products has increased significantly, and suchproducts (desks, chairs, etc) can now be purchased throughmobile apps. Today's House is a platform that provides avariety of interior products at affordable prices. Also,
through active social media promotions such as hashtagging and operating online showroom accounts, the app
increased its awareness.

In South Korea, working from home was not common until
COVID-19 arrived; however, due to the government’s strict
recommendations, companies from large enterprises to small
and medium-sized enterprises began to introduce working
from home. To aid working at home, SK Telecom developed
and provided a platform to make simultaneous calls to 100
people, and also offers a cloud system to allow call centre
employees to work from home.

Source: https://trost.co.kr/

Source:https://www.dailian.co.kr/news/view/893689?sc=Naver

Source: https://zdnet.co.kr/view/?no=20200302105333

SCENARIO DRIVERSDATA INDICATORS• Habitual use of hygiene products:

43.9%

To reduce the chance of infection, sanitary
products have become a necessity of dailylife• Boom in home training: As people
were banned from going out, the numberof people exercising at home increased• Interest in increasing immunity:

HEALTHY LIVING

Consumers want to protect themselvesfrom viruses by strengthening theirimmune systems

Of South Koreans actively monitor what theyeat in order to manage their weight in 2020

42.5%

Of South Koreans look for healthy ingredientsin food and beverages in 2020

45.1%

Of South Koreans take healthsupplements/vitamins in 2020

South Korean consumers reconsider how to maintain healthier lives from a fundamental standpoint
With COVID-19, consumers became more sensitive about health issues, and this influenced their choice of clothes, food and even how to exercise. The
masks used to protect against micro-dust have become the most basic means to protect oneself and others from viruses. Health supplements whichcontain ingredients claimed to improve immunity are increasingly being consumed. People who are anxious about exercising at sports centres, such as
gyms, have devised ways to exercise at home. As a result, the number of users who watch exercise videos or use apps related to home training has
increased, and sales of home training products have also risen significantly. Due to COVID-19, the concept of a healthy lifestyle, which was previously often
limited to personal appearance or eating healthy foods, has expanded to encompass considerations of how to achieve a healthy life in terms of clothes,
food and living conditions.

INTRODUCTION / EXECUTIVE SUMMARY / TREND OVERVIEW

With COVID-19, Koreans began to look for ways to protect themselves

Changing lifestyles

Self-healthcare

Home training

Facial masks have become an essential item to minimise
infection, and it is now not possible to board any public
transportation without a facial mask. Consequently, maskrelated products that did not exist before COVID-19 arecontinuously being released. Filter products that leave lessmake-up on disposable masks and functional masks that
focus on ventilation in summer are currently trending.

The COVID-19 outbreak highlighted the need to boost
immunity. After the virus began to spread, sales of healthsupplements increased rapidly, as consumers sought toprotect themselves from the virus by boosting their immune
systems. Antlers, one of consumer health products, saw its
sales in April 2020 increase by 135% compared to the samemonth in 2019 on e-commerce site, G-market.

Since one of the COVID-19 “super spreader” cases was linked
to a Zumba class, people now rarely go to sports centres foryoga, Pilates, gym, CrossFit, etc. One of the alternatives is toturn to home training videos on YouTube or exercise apps.
According to Garmin Connect app From Jan to Mar 2020,
home education app downloads is increased by 80%
compared to the same period in 2019 in South Korea. In
addition, yoga was the most used workout type.

Soucre:https://smartstore.naver.com/hanapick/products/4931270010

SCENARIO DRIVERSDATA INDICATORS• Growing preference for digital events:

12.6%

Events such as fairs were held online due toreports of high infection rates in crowded areas• Care for society: The concept of ethicalliving is no longer limited to environmentallyfriendly behaviour; it is more about living
happily together• Mutual support: As the economy

ETHICAL LIVING

contracted, consumption behaviour began todevelop that helped the local economy

Of South Koreans believe they can make apositive impact on the environment via theireveryday actions in 2020

64.6%

Of South Koreans try to reduce plastic usage in
2020

15.6%

Of South Koreans are worried about climatechange in 2020

Ethical consumption concepts have changed with COVID-19
As part of the trend towards ethical consumption, South Korean consumers have devised ways to reduce the use of disposable products as much as possible.
For example, some companies gave their employees a personal tumbler each to reduce the usage of disposable items. From the individual customer
perspective, personal tumblers are taken to cafés for takeaway beverages to reduce the usage of disposable cups. Due to COVID-19, the fear of sharing
reusable products has increased, causing people to turn to disposable products again. A new perspective has thus emerged that ethical consumption could
actually, in some cases, be harmful. Another aspect of ethical consumption is supporting farmers who have faced challenges due to their sales channels
being blocked by COVID-19. South Korean consumers are buying local goods using drive-throughs in traditional markets to support these farmers.

INTRODUCTION / EXECUTIVE SUMMARY / TREND OVERVIEWCOVID-19 has changed the concept of ethical consumption as well as lifestyles

Return to disposable products

Popularisation of online fair

Ethical consumption

Many consumers have sought to use fewer disposable
products in order to be more environmentally
responsible. Similarly, many companies haverecommended their employees to use their own
personal tumblers rather than disposable cups.
However, due to COVID-19, there is a trend to increase
the use of disposable products rather than personal
tumblers, as hygiene is an important factor inpreventing the spread of the virus.

As COVID-19 continues, physical events that attract
many people have been cancelled due to social
distancing measures. As an alternative, eBay Korea G9held an online pet fair with an event that provided
discounted prices of pet products from LG Life &Health. In households that have pets, owners could
buy the products that they needed online, while
listening to new product launches, in the comfort oftheir own home.

COVID-19 caused many farms to struggle as exports ofproduction were halted. In order to assist farmers,
South Korean consumers are purchasing agricultural
products directly from farms. Despite being able toshop conveniently on the internet, consumers arechoosing to purchase products from traditional
markets as part of an ethical consumption campaign:
highlighting the effects of individual consumption
behaviour on neighbours, society, and even theenvironment, through a pick-up service in order tohelp farmers in need.

Source: https://www.etnews.com/20200330000223?m=1

Suvi Sundquist
Business Finland
Seoul, South Korea

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Business FinlandTokyo, Japan

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