06 Nov 2020
Posted in Consumer
South Korea’s hot drinks market to register CAGR of 5.7% during 2019–2024, says GlobalData
The make-up sector in South Korea is expected to increase from ₩2.56 trillion (US$2.2bn) in 2019 to ₩3.38 trillion (US$2.9bn) by 2024, with a compounded annual growth rate (CAGR) of 5.7% over the forecast period of 2019-2024, says GlobalData, a leading data and analytics company.
GlobalData’s report, ‘South Korea Hot Drinks- Market Assessment and Forecasts to 2024’ reveals that ‘hot coffee’ was the largest category with value sales of ₩2.24 trillion (US$1.9bn) in 2019. The category is also projected to witness the fastest value growth at a CAGR of 5.8% over the forecast period 2019–2024, followed by hot tea and other hot drinks categories with CAGRs of 5.0% and 3.4%, respectively.
Anchal Bisht, Consumer Analyst at GlobalData, says: “An ever-rising number of coffee aficionados in the country is lending enough traction for category growth, as international brands are perceived to render unique coffee drinking experiences in addition to myriad of flavors. The ubiquitous coffee shops are lending their support in driving category growth by expanding consumer knowledge of coffees and introducing new varieties, which are resulting in growing consumer preference for high quality coffee.”
The per capita expenditure on hot drinks in South Korea stood at US$42.3 in 2019 which was significantly higher than the global per capita expenditure of US$30.1 and regional per capita expenditure which stood at US$19.8 in the same year.
Ajinomoto Group, Namyang Dairy Products Co and Nestle SA are the top three players in the South Korean hot drinks sector. Maxim and Osulloc are the most popular coffee and tea brands respectively.
Convenience stores registered a value share of 47.3% and emerged as the largest distribution channel in 2019 in the South Korea hot drinks sector, followed by hypermarkets & supermarkets. while on-trade transactions held just 8.2% share in the same year.
Ms Anchal concludes: “Significant rise in café culture in South Korea has increased millennials’ inclination towards specialty coffee which will drive sector growth further. South Korean consumers view coffee as a source of energy and thus, follow its consumption as a daily ritual which will have a positive impact on the category growth going forward.”