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McKinsey Survey: Korean consumer sentiment during the coronavirus crisis

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McKinsey Survey: Korean consumer sentiment during the coronavirus crisis

Most Korean consumers expect that normalcy will return to routines only after June 2022, yet there are signs of pre-COVID-19 routines returning.
Korean customers have been less optimistic than those in other countries about the economic recovery. But optimism in Korea is much higher now than two years ago. Half of consumers indicate a desire to splurge, with intent to do so being the strongest in Gen Z and millennials. One-eighth of consumers say they have returned to out-of-home activities.

Most Korean consumers expect that normalcy will return to routines only after June 2022, yet there are signs of pre-COVID-19 routines returning.
Korean customers have been less optimistic than those in other countries about the economic recovery. But optimism in Korea is much higher now than two years ago. Half of consumers indicate a desire to splurge, with intent to do so being the strongest in Gen Z and millennials. One-eighth of consumers say they have returned to out-of-home activities.

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McKinsey Survey: Korean consumer sentiment during the coronavirus crisis

  1. 1. McKinsey & Company 1 Five emerging consumer themes in March 2022 1 2 5 4 3 Optimistic outlook 23% of Korean consumers expect the economy to rebound within two to three months Gen Z and millennials are keen on splurging, with apparel, shoes, and accessories being their biggest spending category Omnichannel is ascendant Omnichannel shopping is the most prevalent channel for 20 out of 23 categories Consumers who use alternatives to normal in-store shopping strongly intend to continue using such alternatives Loyalty shakeup 43% say they’ve tried a new retailer, and 36% tried a new brand in the past three months About half (49%) of consumers facing a stockout report either not making a purchase or waiting for stock at the same retailer Modified return to out-of-home 12% of consumers are engaging in “normal” out-of-home activities More than one-fifth of consumers are engaging in modified behavior Signs of spend recovery Several categories experienced positive net intent1 Travel and out-of-home entertainment ceded recovery to the omicron variant 1. Net intent is calculated by subtracting the % of respondents stating they expect to decrease spending from the % of respondents stating they expect to increase spending.
  2. 2. McKinsey & Company 2 Confidence in own country’s economic recovery after COVID-191, % of respondents 15 15 21 29 32 29 20 29 46 56 51 48 47 59 75 68 38 28 27 23 21 12 5 3 14 63 23 Mixed: The economy will be impacted for 6–12 months or longer and will stagnate or show slow growth thereafter Pessimistic: COVID-19 will have lasting impact on the economy and show regression or fall into lengthy recession Optimistic: The economy will rebound within 2–3 months and grow just as strong as or stronger than before COVID-19 1. Q: What is your overall confidence level surrounding economic conditions after the coronavirus (COVID-19) crisis subsides (ie, once there is herd immunity)? Rated from 1 “very optimistic” to 6 “very pessimistic.” Bars may not sum to 100% due to rounding. Optimistic outlook | Current as of March 2022 Change in optimistic vs last wave survey, percentage points Source: McKinsey & Company COVID-19 Consumer Pulse Survey India 3/11–24 +1 Oct 2021 US 3/1–25 −6 Oct 2021 Japan 3/16–26 −2 Oct 2021 Indonesia 3/16–26 +15 Sept 2020 Australia 3/16–25 −10 Nov 2020 Korea 3/19–26 +15 June 2020 Germany 3/22–28 −10 Oct 2021 France 3/23–28 −9 Oct 2021 UK 3/22–29 −12 Oct 2021 Korean consumers are among the least optimistic of the geographic segments sampled
  3. 3. McKinsey & Company 3 Optimistic outlook | Current as of March 2022 1. Q: What is your overall confidence level surrounding economic conditions after the coronavirus (COVID-19) crisis subsides (ie, once there is herd immunity)? Rated from 1 “very optimistic” to 6 “very pessimistic.” Figures may not sum to 100% because of rounding. 2. Average of weekly pulse surveys shown for Mar and Apr 2020. Optimistic: The economy will rebound within 2–3 months and grow just as strong as or stronger than before COVID-19 Mixed: The economy will be impacted for 6–12 months or longer and will stagnate or show slow growth thereafter Pessimistic: COVID-19 will have lasting impact on the economy and show regression or fall into lengthy recession Optimism in Korean consumers increased greatly since the last pulse survey Confidence in own country’s economic recovery after COVID-19,1 % of respondents 25 28 24 20 20 24 14 62 61 63 66 70 69 63 14 11 13 14 9 8 23 Mar 28–29 2020 Apr 3–6 2020 Apr 10–12 2020 May 1–3 2020 May 22–24 2020 Jun 19–21 2020 Mar 19–26 2022 Source: McKinsey & Company COVID-19 Korea Consumer Pulse Survey 3/19–3/26/2022, n = 1,032; 6/19–6/21/2020, n = 606; 5/22–5/24/2020, n = 606; 5/1–5/3/2020, n = 600; 4/10–4/12/2020, n = 600; 4/3–4/6/2020, n = 596; 3/28–3/29/2020, n = 600, sampled to match South Korea’s general population 18+ years
  4. 4. McKinsey & Company 4 Higher-income consumers are significantly more optimistic than lower-income groups Optimistic outlook | Current as of March 2022 11 12 20 8 23 15 25 0 10 20 5 15 25 30 35 9 Apr 2020 9 4 May 2020 7 June 2020 Mar 2022 13 Low (<30 million won) High (>120 million won) Medium (30 million–120 million won) 31 24 21 20 15 32 19 0 10 20 5 15 25 30 35 Apr 2020 Mar 2022 25 23 May 2020 June 2020 14 27 14 1. Q: What is your overall confidence level surrounding economic conditions after the coronavirus (COVID-19) crisis subsides (ie, once there is herd immunity)? Rated from 1 “very optimistic” to 6 “very pessimistic.” Optimism by income Pessimism by income Confidence in own country’s economic recovery after COVID-19 by income level,1 % of respondents Source: McKinsey & Company COVID-19 Korea Consumer Pulse Survey 3/19–3/26/2022, n = 1,032; 6/19–6/21/2020, n = 606; 5/22–5/24/2020, n = 606; 4/10–4/12/2020, n = 600, sampled to match South Korea’s general population 18+ years
  5. 5. McKinsey & Company 5 Younger and unvaccinated consumers are driving optimism Optimistic outlook | Current as of March 2022 Confidence in own country’s economic recovery after COVID-191 % of respondents 14 24 64 49 22 27 Vaccinated Unvaccinated 1. Q: What is your overall confidence level surrounding economic conditions after the coronavirus (COVID-19) crisis subsides (ie, once there is herd immunity)? Rated from 1 “very optimistic” to 6 “very pessimistic.” 2. Baby boomers includes silent generation. 17 13 16 14 57 61 65 65 26 27 19 21 Gen Z Gen X Millennials Baby boomers2 Optimistic Mixed Pessimistic Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years By generation By vaccination status
  6. 6. McKinsey & Company 6 Optimistic outlook | Current as of March 2022 19 10 8 6 10 4 4 3 71 86 88 91 Millennials Gen Z Gen X Baby boomers3 8 17 4 3 87 79 Vaccinated Unvaccinated 9 4 87 Overall 1. Q: When do you expect your routines will return to normal? Figures may not sum to 100% because of rounding. 2. Q: Which best describes your vaccination status? 3. Baby boomers includes silent generation. Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years After June 2022 By June 2022 Not affected/already returned By generation By vaccination status2 Gen Z are more optimistic about the return, while ~90% of older consumers expect a longer lead time ~17% of unvaccinated consumers are already engaging in normal routines Key findings Most consumers expect their routines will return to ‘normal’ only after June 2022 Expectations for routines returning to normal,1 % of respondents
  7. 7. McKinsey & Company 7 An increasing proportion of consumers report that their income, spending, and savings are stable Optimistic outlook | Current as of March 2022 Source: McKinsey & Company COVID-19 Korea Consumer Pulse Survey 3/19–3/26/2022, n = 1,032; 6/19–6/21/2020, n = 606; 5/22–5/24/2020, n = 606, sampled to match Korea's general population 18+ years 1. Q: How has the coronavirus (COVID-19) crisis affected the following over the past 1 month/2 weeks? Figures may not sum to 100% because of rounding. Household income1 % of respondents Household spending1 % of respondents Household savings1 % of respondents Reduce slightly/reduce a lot About the same Increase slightly/increase a lot 46 1 3 4 51 51 Past 2 weeks 45 Past 2 weeks 56 42 Past 2 weeks 50 45 43 30 33 40 21 22 17 Past 2 weeks Past 2 weeks Past 2 weeks 39 39 37 56 53 57 7 Past 2 weeks Past 2 weeks Past 2 weeks 5 6 May 22–24 2020 June 19–21 2020 Mar 19–26 2022 May 22–24 2020 June 19–21 2020 Mar 19–26 2022 May 22–24 2020 June 19–21 2020 Mar 19–26 2022
  8. 8. McKinsey & Company 8 Only 26 percent of consumers say their finances have returned to ‘normal’; 70 percent say it will take until after June 2022 Optimistic outlook | Current as of March 2022 24 30 26 24 5 71 66 71 73 Millennials Gen Z Gen X 3 Baby boomers3 3 5 26 33 71 66 Vaccinated Unvaccinated 4 2 26 70 Overall 4 1. Q: When do you expect your personal/household finances will return to normal? Figures may not sum to 100% because of rounding. 2. Q: Which best describes your vaccination status? 3. Baby boomers includes silent generation. Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years By generation By vaccination status2 ~30% of millennials and 33% of unvaccinated say their finances either were not affected or are back to normal, reflecting the highest confidence Expectations on personal/household finances returning to ‘normal,’1 % of respondents After June 2022 Not affected/already returned By June 2022
  9. 9. McKinsey & Company 9 Optimistic outlook | Current as of March 2022 Around half of consumers want to ‘splurge,’ with intent to do so being the strongest for Gen Z and millennials 1. Q: With regard to products and services you will spend money on, do you plan to splurge/treat yourself in 2022? For example, are there categories of products or services you have spent less on over the last year and a half which you feel you will spend more on in next 3 months? 2. Baby Boomers includes silent generation. Plan on splurging 49 51 Mar 2022 Do not plan on splurging Millennials Gen X Baby boomers2 65 61 Gen Z 100 58 67 57 27 36 41 30 48 69 Generation Respondents who plan/do not plan to ‘splurge’ or ‘treat themselves’ in 20221 % of respondents Low (<30M won) Middle (30M–120M won) High (>120M won) >70% <30% 50–70% 30–50% Respondents who plan to splurge, by household income, % Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years
  10. 10. McKinsey & Company 10 Younger consumers have a strong desire to splurge on apparel and cosmetics, while older consumers desire tourism Optimistic outlook | Current as of March 2022 Categories where consumers intend to treat themselves1 % of all respondents with intent to splurge 1. Q: You mentioned that you plan to splurge/treat yourself in next 3 months. Which categories do you intend to treat yourself to? Please select all that apply. 2. Baby boomers includes silent generation. 55 47 39 24 21 19 18 17 12 10 10 9 3 Fitness Sports apparel and equipment Pets Apparel, shoes, accessories Travel, lodging, vacation Out-of-home entertainment Electronics Personal services Restaurants, dining out, bars Makeup, skin care products Items for your home Household essentials Outdoor living Millennials Gen X Gen Z Baby boomers2 18 8 −5 −18 −9 −5 −1 16 4 −6 −2 10 −6 2 3 −4 −3 0 −1 4 −4 −2 4 1 3 −3 1 0 17 2 −4 −10 −6 −1 −1 7 Generational cut 5 1 −1 −4 8 3 −4 −5 −1 −2 4 −2 −2 2 0 −2 Between −3 and +3 < −3 > +3 Categories Difference from all respondents, percentage points Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years
  11. 11. McKinsey & Company 11 Omnichannel shopping is prevalent across most categories Omnichannel is ascendant | Current as of March 2022 1. Q: Which best describes how you have researched the following categories over the last 3 months? 2. Q: Which best describes how you have purchased the following categories over the last 3 months? 12 51 35 46 53 10 18 6 27 Personal-care products 10 47 28 67 Tobacco products and smoking supplies 17 Groceries/food for home 13 60 4 41 7 13 Alcoholic beverages 36 Vehicles 56 31 60 27 Fitness and wellness services 53 19 57 24 Home decoration and furniture 63 Jewelry 22 Home improvement and gardening supplies 10 70 52 20 12 Food takeout/delivery 32 60 11 Sports and outdoors equipment and supplies 16 Household supplies 35 Pet food and supplies 13 Books, magazines, newspapers 41 26 53 11 57 10 Kitchen and dining 31 58 11 Apparel 34 55 28 50 Skin care and makeup 37 Footwear 28 64 8 Toys and baby supplies 30 62 40 Accessories 30 63 Consumer electronics Pet care services Vitamins, supplements, and over-the-counter medicine 20 18 50 32 8 Research and purchase only in stores Omnichannel Research and purchase only online Product searches1 and purchases2 by channel % of respondents who purchased and searched in these categories in the last 3 months Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years
  12. 12. McKinsey & Company 12 In 13 of 16 categories, more than four in ten consumers were influenced by social media while making purchases Omnichannel is ascendant | Current as of March 2022 1. Q: Think about the purchases you have made in the following categories over the past 3 months. Were you influenced toward a certain brand by a post on social media in the following categories? 2. Baby boomers includes silent generation. Millennials Gen X Gen Z Baby boomers2 7 −7 −9 2 −1 1 −2 −5 −1 8 −40 16 8 −5 −10 11 −8 14 −11 14 10 −9 −9 16 5 −5 −9 −7 −3 3 3 −12 4 0 0 Generational cut 11 −6 −2 7 1 3 −2 −1 −9 5 2 −3 16 3 −4 −1 Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years Between −3 and +3 < −3 > +3 Categories Categories where respondents were influenced by social media1 % of all respondents 9 4 4 3 12 3 5 −4 −2 −1 −10 −2 −5 Difference from all respondents, percentage points 64 59 58 56 55 54 50 47 47 47 46 42 41 39 36 32 Home decoration and furniture Apparel Accessories Consumer electronics Sports and outdoors equipment and supplies Skin care and makeup Jewelry Footwear Fitness and wellness services Pet food and supplies Vitamins, supplements, and over-the-counter medicine Home improvement and garden supplies Kitchen and dining Groceries/food for home Personal-care products Household supplies
  13. 13. McKinsey & Company 13 Most Korean consumers (97 percent) engage in social media at least once a week Frequency of engagement with social-media platforms1 % of all respondents 1. Q: What social-media platforms do you engage with, and if so, how frequently? Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years 97 94 61 50 30 20 11 7 7 7 32 6 39 50 70 80 89 93 93 93 68 TikTok 3 Overall Twitter YouTube Facebook Insta- gram Pinterest Reddit LinkedIn Snapchat Others Never/less than weekly Weekly or more Omnichannel is ascendant | Current as of March 2022
  14. 14. McKinsey & Company 14 More than 60 percent of consumers engage with an entertainment platform at least once a week 64 44 38 22 21 36 56 62 78 79 Wave Overall Kakao Page NAVER Webtoon Tving Never/less than weekly Weekly or more Omnichannel is ascendant | Current as of March 2022 Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years 1. Q: What entertainment platforms do you engage with, and if so, how frequently? Frequency of engagement with entertainment platforms1 % of all respondents
  15. 15. McKinsey & Company 15 58 60 4 5 6 11 56 68 70 62 64 9 84 66 14 10 72 78 80 96 82 8 13 86 12 88 90 92 7 94 0 1 2 3 Self-checkout or scan-and-go at a physical store Drive-thru lane Grocery delivery Downloaded/used deal-finding plug-ins Buy online, pick up in store Purchased from social media Restaurant food delivery Used an app for 2-hour or 1-hour delivery Meal kit delivery Curbside pickup Curbside delivery New store/restaurant app Purchased pre-owned product Used an app for same-day delivery Omnichannel is ascendant | Current as of March 2022 Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years Intent to use when the COVID-19 crisis subsides2 % of new or increased users who intend to keep doing activity User growth since COVID-19 1 1. User growth is calculated as % of respondents who replied that they are new users over % of respondents who replied that they were using the product/service pre-COVID-19 (using more, using the same or using less) on Q: Which best describes when you have done or used each of these items? 2. Q: Compared to now, will you do or use the following more, less, or not at all, once the coronavirus (COVID-19) crisis subsides (ie, once there is herd immunity)? Possible answers: “will stop this”; ”will reduce this”; “will keep doing what I am doing now”; “will increase this.” Number indicates percent who chose “will keep doing what I am doing now” and “will increase this” among new or increased users. Consumer loyalty and shopping behavior have shifted, and consumers intend to maintain the shifts when the COVID-19 crisis subsides.
  16. 16. McKinsey & Company 16 Omnichannel is ascendant | Current as of March 2022 Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years 83 63 43 42 24 86 49 75 0 1 41 76 77 44 45 68 46 47 27 15 66 87 48 50 80 9 51 71 52 53 55 54 70 56 57 59 58 60 84 82 61 62 64 65 78 67 69 85 72 73 12 74 18 79 81 88 0 3 6 21 Online fitness TikTok Telemedicine: physical health Playing online games Watching e-sports Personal care/grooming at home Video conferencing: professional use Virtual hangouts and video chats Telemedicine: mental health Remote learning: myself Remote learning: my children NFTs Augmented or virtual reality Wellness app Intent to use when the COVID-19 crisis subsides2 % of new or increased users who intend to keep doing activity User growth since COVID-19 1 1. User growth is calculated as % of respondents who replied that they are new users over % of respondents who replied that they were using the product/service pre-COVID-19 (using more, using the same, or using less) on Q: Which best describes when you have done or used each of these items? 2. Q: Compared to now, will you do or use the following more, less, or not at all, once the coronavirus (COVID-19) ) crisis subsides (ie, once there is herd immunity)? Possible answers: “will stop this”; ”will reduce this”; “will keep doing what I am doing now”; “will increase this.” Number indicates respondents who chose “will keep doing what I am doing now” and “will increase this” among new or increased users. Intent to use digital services after the COVID-19 crisis subsides remains high, with strong user growth in new tech, such as wellness apps and NFTs
  17. 17. McKinsey & Company 17 9 Self-checkout or scan-and-go at a physical store 3 A drive-thru line for a fast-food restaurant 8 34 9 33 11 7 Curbside pickup from a restaurant 4 Curbside delivery at a store 8 Purchased secondhand products online Buy online, pick up in store 2 17 10 Downloaded/used deal-finding plug-ins 3 Downloaded/used a new store/restaurant app 9 Used an app/website for delivery within 2 hours Used an app/website for same-day delivery 9 Changed my primary grocery store 25 Shopped at a store I had not shopped at before for groceries Cooked regularly for myself/my family 9 Personal care/grooming at home 12 Tried making something myself/DIY project 5 5 10 43 3 1 1 6 3 4 5 9 5 1 1 2 49 50 51 52 45 57 51 44 44 Purchased directly from social media 56 39 34 63 36 43 43 39 35 49 44 32 43 43 36 33 35 36 53 37 1. Q: And have you used or done any of the following in the last 3 months? If yes, Q: Which best describes when you have done or used each of these items? Possible answers: “just started using since COVID-19 started”; “I have not used in the last 3 months”; “I have used in the last 3 months at the same rate as before”; “I have used this more in the past 3 month than before”; “I have used this less in the past 3 months than before.” 2. Q: Compared to now, will you do or use the following more, less, or not at all, once the coronavirus (COVID-19) ) crisis subsides (ie, once there is herd immunity)? Possible answers: “will stop this”; ”will reduce this”; “will keep doing what I am doing now”; “will increase this.” Number indicates respondents who chose “will keep doing what I am doing now” and “will increase this” among new or increased users. Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years Intent to continue2 Consumers who use alternatives to normal in-store shopping report using alternatives as often or more frequently in the last three months Omnichannel is ascendant | Current as of March 2022 78 70 94 85 69 72 83 63 72 78 76 73 67 82 76 94 Which best describes when you have done or used each of these items?1 % of respondents who have used in the last three months Just started using Using Same Using less Using more
  18. 18. McKinsey & Company 18 Consumers are using digital services more frequently and with strong intent to continue 1. Q: Have you used or done any of the following since the coronavirus (COVID-19) crisis started? If yes, Q: Which best describes when you have done or used each of these items? Possible answers: “just started using since COVID-19 started”; “using more since COVID-19 started”; “using about the same since COVID-19 started”; “using less since COVID-19 started.” 2. Q: Compared to now, will you do or use the following more, less, or not at all, once the coronavirus (COVID-19) crisis subsides (ie, once there is herd immunity)? Possible answers: “will stop this”; ”will reduce this”; “will keep doing what I am doing now”; “will increase this.” Number indicates respondents who chose “will keep doing what I am doing now” and “will increase this” among new or increased users. Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years Omnichannel is ascendant | Current as of March 2022 42 10 33 64 23 11 14 22 46 2 Used TikTok 2 Online personal training, fitness 23 62 Wellness app 12 Watching online gaming 51 49 18 Online streaming 67 18 Virtual hangouts and video chats for personal use 2 13 24 Meal kit delivery 69 23 5 3 Restaurant food delivery 18 28 37 69 3 6 5 Grocery delivery 68 17 2 73 2 3 12 Video conferencing for professional use 35 Telemedicine for physical health care 3 33 13 Telemedicine for mental health care 43 5 6 53 Playing online gaming 57 30 0 13 Remote learning for myself 74 12 4 5 Remote learning for my kids 45 43 3 9 46 3 2 Used social media 10 81 83 68 59 72 81 62 42 60 68 60 83 63 79 70 86 Intent to continue2 Which best describes when you have done or used each of these items?1 % of respondents who have used in the last three months Just started using Using less Using same Using more
  19. 19. McKinsey & Company 19 0 −60 −80 −70 −50 −30 −40 −20 −10 10 −90 20 30 40 50 60 Mar 2022 Mar 2020 Apr 2020 May 2020 June 2020 Expected spending per category over the next 2–3 months vs usual1 Net intent2 Groceries Household supplies At-home entertainment Fitness and wellness Consumer electronics Meals at restaurants Apparel Domestic flights International flights Out-of-home entertainment 1. Q: Over the next 2–3 months, do you expect that you will spend more, about the same, or less money on these categories than usual? Figures may not sum to 100% because of rounding. 2. Net intent is calculated by subtracting the % of respondents stating they expect to decrease spending from the % of respondents stating they expect to increase spending. Signs of spend recovery | Current as of March 2022 Source: McKinsey & Company COVID-19 Korea Consumer Pulse Survey 3/19–3/26/2022, n = 1,032; 6/19–6/21/2020, n = 606; 5/22–5/24/2020, n = 606; 4/10–4/12/2020, n = 600; 3/28–3/29/2020, n = 600, sampled to match South Korea’s general population 18+ years Spending net intent is increasing in all categories except groceries, where it has stabilized
  20. 20. McKinsey & Company 20 Consumers report positive net intent to spend for a few categories Signs of spend recovery | Current as of March 2022 Net intent >1 Net intent −15 to 0 Net intent < −15 Source: McKinsey & Company COVID-19 Korea Consumer Pulse Survey 3/19–3/26/2022, n = 1,032; 6/19–6/21/2020, n = 606, sampled to match Korea's general population 18+ years 6 15 20 28 30 37 32 32 39 33 20 9 8 22 30 25 30 19 22 12 30 16 15 22 14 17 8 33 13 15 12 14 23 23 13 Food takeout and delivery Apparel Groceries Footwear Quick-service restaurant Tobacco products Alcohol Restaurant 10 Household supplies Jewelry Accessories Toys and baby supplies Personal-care products Skin care and makeup Home and furniture Sports and outdoors Home improvement, garden Kitchen and dining Decrease Stay the same Increase 8 12 16 34 28 12 19 20 18 49 29 24 36 30 36 33 37 11 32 25 17 25 11 20 31 22 23 35 25 34 21 30 25 Pet food and supplies Entertainment at home Gasoline Vitamins and OTC medicine Pet care services Out-of-home entertainment Books/magazines/newspapers Consumer electronics Fitness and wellness 10 Personal-care services Vehicles Short-term home rentals Travel by car 10 Cruises Adventures and tours International flights Hotel/resort stays Domestic flights 10 Net intent2 13 −6 −18 −3 −2 1 −10 13 −6 10 −11 4 −16 −3 22 −27 1. Q: Over the next 2–3 months, do you expect that you will spend more, about the same, or less money on these categories than usual? Figures may not sum to 100% because of rounding. 2. Net intent is calculated by subtracting the % of respondents stating they expect to decrease spending from the % of respondents stating they expect to increase spending. 3. Data not available or insufficient sample (n < 50) in June 2020 survey. 14 3 8 9 40 52 18 28 21 33 7 −1 −6 21 15 N/A3 N/A3 N/A3 Change since June 2020 Change since June 2020 2 N/A3 N/A3 −29 −11 20 65 14 45 34 35 6 20 59 N/A3 72 73 56 −12 58 Net intent2 −29 16 13 4 −17 −3 10 −12 −15 −15 −18 −14 −25 8 −10 −2 −8 −6 Expected spending per category over the next 2-3 months vs usual1 % of respondents
  21. 21. McKinsey & Company 21 Spending expectations are similar across vaccinated and unvaccinated people for most of the categories Signs of spend recovery | Current as of March 2022 Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years 1. Net intent is calculated by subtracting the % of respondents stating they expect to decrease spending from the % of respondents stating they expect to increase spending. 2. Q: Over the next 2–3 months, do you expect that you will spend more, about the same, or less money on these categories than usual? Selected categories Net intent1 to spend per category over the next 2–3 months vs usual2 Unlikely Cautious Interested Vaccinated Groceries Food takeout and delivery Restaurant Quick-service restaurant Home decor Home and garden Personal-care items Fitness and wellness Out-of-home entertainment International flights 23 13 −26 −4 −7 0 12 28 −21 0 16 −10 −23 −25 −50 0 5 16 32 0 38 35 −70 −14 0 0 −8 0 −47 −46 16 10 −14 −16 −16 −8 8 0 −2 −14 Between −3 and +3 < −3 > +3
  22. 22. McKinsey & Company 22 Enhancing quantity and shift to premiumization have led to increases in spending across several categories 2 3 3 1 8 7 3 1 53 53 48 46 40 49 49 45 59 32 23 17 7 19 23 42 24 37 3 4 10 14 22 15 19 33 16 47 55 47 53 18 30 30 40 21 43 41 41 41 36 36 31 19 23 20 22 36 32 63 41 25 35 42 Pet food and supplies Apparel Meals at restaurant Kitchen and dining Household supplies Personal-care products 1 Meals at quick-serve rest. Groceries Food takeout/delivery Pet care services Vitamins and supplements 0 Footwear Accessories Consumer electronics Vehicles Skin care and makeup Home and decoration Personal-care services Larger quantity Increase in income Increase in price Premium brands/products 1. Q: Please indicate the main reason for planning to spend more on the following categories. Reasons for increase in spend1 % of respondents who increased spend Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years Signs of spend recovery | Current as of March 2022
  23. 23. McKinsey & Company 23 Decreases in income and purchases of smaller quantities to offset price increases have led to a decrease in spending 24 15 18 15 13 13 14 21 23 17 19 25 5 17 12 14 24 31 45 31 32 4 35 30 42 25 22 23 25 19 32 30 20 28 19 25 10 12 9 32 22 23 6 19 19 21 18 9 14 8 38 22 18 20 28 36 43 54 25 32 31 31 33 36 33 44 49 41 21 32 35 2 3 1 10 6 1 7 4 3 2 5 3 4 9 3 4 Household supplies Groceries Food takeout/delivery Meals at restaurant Pet food and supplies Meals at quick-serve rest. 0 Vehicles Personal-care products Pet care services Vitamins and supplements Apparel Footwear Accessories Consumer electronics Home and decoration Kitchen and dining Skin care and makeup Personal-care services Decrease in income Smaller quantity Switch to less expensive Spend more on other categories Reduced price 1. Q: Please indicate the main reason for planning to spend less on the following categories. Reasons for decrease in spend1 % of respondents who decreased spend Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years Signs of spend recovery | Current as of March 2022
  24. 24. McKinsey & Company 24 Modified return to out-of-home | Current as of March 2022 12 4 6 June 2020 May 2020 Mar 2022 Overall 12 Vaccinated Unvaccinated 9 11 Gen Z Baby boomers3 Millennials Gen X 8 20 13 High (>120M won) Low (<30M won) Medium (30M– 120M won) 15 10 19 1. Q: Which best describes when you will regularly return to stores, restaurants, and other out-of-home activities? Chart shows those already participating in these activities. 2. Gen Z are people under 26 years old, millennials are 26–41 years old, Gen X are people 42–57 years old, baby boomers are 58 years old and above. 3. Baby boomers includes silent generation. By generation2 By vaccination adoption By income ~20% of Gen Z are doing out- of-home activities ~19% of high-income households are doing out-of-home activities ~12% of people who are vaccinated are doing out-of-home activities Consumers engaging in out-of-home activities,1 % of respondents About one-eighth of consumers say they are engaging in out-of- home activities Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years
  25. 25. McKinsey & Company 25 Modified return to out-of-home | Current as of March 2022 Source: McKinsey & Company COVID-19 Korea Consumer Pulse Survey 3/19–3/26/2022, n = 1,032; 6/19–6/21/2020, n = 606, sampled to match Korea's general population 18+ years Social Personal care Entertain- ment 88 72 60 52 71 90 70 89 82 Go to the gym or fitness studio Attend an outdoor event Attend an indoor cultural event Visit a crowded outdoor public place Dine indoors at a restaurant or bar Go to a hair or nail salon Go out for family entertainment Get together with family Get together with friends 81 98 98 90 86 73 75 51 69 77 72 Use public transportation Work outside my home Shop for non-necessities Shop for groceries/necessities Use a ride-sharing service Go to a shopping mall Travel more than 2 hours by car Travel by airplane Travel by train Stay in a hotel Rent a short-term home Work Shopping Transport/ travel 6 64 5 N/A2 56 60 47 N/A2 N/A2 56 59 18 36 51 56 46 35 50% and above Less than 50% Change >10 pp Change from June 2020, percentage points Change from June 2020, percentage points Consumers have increased all out-of-home activities since June 2020; shopping increased the most N/A2 N/A2 N/A2 Out-of-home activities currently engaged in1 % of respondents who said they are doing this in the same or a modified way 1. Q: Which best describes how you are engaging in each of these activities? ? Possible answers: “Not doing this all”; “Doing this in the same way as pre-COVID-19 but less often”; “Doing this in a modified way vs pre-COVID-19”; “Doing this just as much and in the same way as I did pre-COVID-19.” 2. Not available in 2020.
  26. 26. McKinsey & Company 26 1. Q: With the rise of the omicron variant of COVID-19, how, if at all, has your out-of-home behavior changed? Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years 10 10 7 18 22 32 71 68 60 1 2 Medium (30M– 120M won) Low (<30M won) High (>120M won) Modified return to out-of-home | Current as of March 2022 9 14 22 14 68 70 Vaccinated Unvaccinated 2 10 21 68 Overall Engage with adjusted behavior 1 Engage same as before omicron Engage less Engage more By income By vaccination status Higher-income consumers are more open to engaging in out-of-home activities, with adjusted behavior Vaccinated consumers are more likely than unvaccinated consumers to adjust behavior when engaging in out-of- home activities Key findings Adjustments to out-of-home behavior due to prevalence of omicron variant,1 % of respondents Roughly 70 percent of consumers say they engaged less in out-of-home activities because of the omicron variant
  27. 27. McKinsey & Company 27 Modified return to out-of-home | Current as of March 2022 Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years 1. Q: Which best describes how you are engaging in each of these activities? Possible answers: “Not doing this at all”; “Doing this in the same way as pre-COVID-19 but less often”; “Doing this in a modified way vs pre-COVID-19”; “Doing this just as much and in the same way as I did pre-COVID-19.” Work Shopping Transport/ travel Social Personal care Entertain- ment 10 90 89 Dine indoors at a restaurant or bar 11 Go out for family entertainment 7 93 Attend an indoor cultural event 10 Get together with family 90 Attend an outdoor event 10 80 90 Visit a crowded outdoor public place 20 Go to a hair or nail salon 18 82 Go to the gym or fitness studio 10 90 8 92 Get together with friends 10 15 30 Shop for groceries/necessities 28 70 72 90 Work outside my home 86 14 Shop for non-necessities 32 68 15 85 Go to a shopping mall Travel more than 2 hours by car Rent a short-term home 14 86 Use public transportation 32 68 Use a ride-sharing service 12 88 Travel by airplane 85 Travel by train Stay in a hotel 12 88 Doing less, doing in a modified way Doing as much as and in the same way as pre-COVID-19 Out-of-home activities engagement,1 % of respondents having engaged in activity pre-COVID-19 Korean consumers modified out-of-home behavior across all categories
  28. 28. McKinsey & Company 28 Main life events done in the last 12 months as a result of COVID,1 % of respondents Modified return to out-of-home | Current as of March 2022 27 10 5 7 5 14 3 4 3 2 4 Moved into a bigger home Set up a specific work-from-home space Started homeschooling children Worked more from home Decided to change jobs Set up a gym at home Renovated/remodeled my home Got a new pet at home (eg, dog, cat) Moved into a smaller home Bought a property Sold a property Work/study change Mar 2022 Pet adoption House move Home renovation Investments/ divestments Total,2 % 3 35 7 22 6 1. Q: Which of the following have you done in the last 12 months as a result of the COVID-19 crisis? 2. Total percentage of people who choose option(s) in the category. Consumers continue to invest in their home environment as a result of the COVID-19 pandemic Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years
  29. 29. McKinsey & Company 29 Milestones for the Korea population not yet engaging with out-of-home activities1 % of respondents awaiting each milestone before engaging 15 48 7 30 Vaccination coverage Government lifts restrictions Government lifts restrictions and other requirements COVID-19 no longer spreading 88% of people are not currently engaging in ‘normal’ out-of- home activities Vaccination coverage Government lifts restrictions and … 1. Q: Which best describes when you will regularly return to stores, restaurants, and other out-of-home activities? Chart rebased to exclude those already participating in these activities and those who do not deem any of these items important. Figures may not sum to 100% because of rounding. 28% Medical authorities deem safe 12% Stores, restaurants, and other indoor places start taking safety measures 8% I see other people returning 2% Vaccine is widely distributed 4% I have been vaccinated 1% Family member(s) vaccinated Cautious consumers cite restrictions by government and medical authorities as primary reasons for not yet returning to out-of-home activities Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years Modified return to out-of-home | Current as of March 2022
  30. 30. McKinsey & Company 30 74 43 36 31 28 23 Any new shopping behavior Different retailer/store/website New digital shopping method Different brand Private label/store brand New shopping method3 Loyalty shakeup | Current as of March 2022 Source: McKinsey & Company COVID-19 Korea Consumer Pulse Survey 3/19–3/26/2022, n = 1,032; 6/19–6/21/2020, n = 606, sampled to match Korea's general population 18+ years 86 67 91 53 85 71 83 56 High (>120M won) Gen Z Millennials 80 78 82 55 87 60 42 46 44 43 45 40 35 42 36 20 32 29 33 30 Income cut Generational cut All consumers % of respondents Change from June 2020, percentage points Intent to continue behavior2 Between −3 and +3 < −3 > +3 1. Q: Over the past 3 months, which of the following have you done? 26% replied, “None of these.” 2. Q: Which best describes whether or not you plan to continue with these shopping changes? Possible answers: “will go back to what I did before 3 months ago”; ”will keep doing both this and what I did before 3 months ago”; ”will keep doing this and NOT go back to what I did before 3 months ago.” Intent to continue includes respondents who selected “will keep doing both this and what I did before 3 months ago” and “will keep doing this and NOT go back to what I did before 3 months ago.” 3. “New shopping method” includes curbside pickup and delivery apps. Behaviors since COVID-19 started1 % of respondents Changes in consumer behavior have been more extensive among younger and higher-income consumers Difference from all respondents, percentage points
  31. 31. McKinsey & Company 31 When facing a stockout of a planned purchase, consumers are most likely to not buy anything, followed by buying at different retailer Loyalty shakeup | Current as of March 2022 1. Q: Over the last 3 months, have you wanted to buy something and not been able to purchase it because it was out of stock or otherwise not available? 2. Q: The most recent time this happened (when you wanted to buy something and it was not available), what did you do? Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years 63 37 Mar 2022 Could not purchase at least 1 item Able to purchase all items Respondents who planned to purchase something but could not, due to unavailability1 % of respondents 27 26 22 15 10 Did not buy anything Bought a different brand or similar product at a different retailer Bought the product at a different retailer Bought a different product at the same retailer Waited until product was available at the same retailer All consumers who could not make a planned purchase2 % of respondents
  32. 32. McKinsey & Company 32 Reason for trying a new brand since COVID-19 began1 % of respondents selecting reason in top 3 Loyalty shakeup | Current as of March 2022 1. Q: You mentioned you tried a new/different brand than what you normally buy. What were the main reasons that drove this decision? Select up to 3 relevant reasons. “Brand” includes different brand, new private label/store brand. Overarching reason based on % of individual respondents responding to at least one reason in the group. 2. Baby boomers includes silent generation. Source: McKinsey & Company COVID-19 Korea Consumer Pulse 3/19–3/26/2022, n = 1,032, sampled to match Korea's general population 18+ years Between −3 and +3 < −3 > +3 Value was the primary reason for switching brands, particularly for older consumers; personal choice was key for younger consumers Difference from all respondents, percentage points 19 Better shipping, delivery cost Wanted to treat myself Better value Wanted to try a type of product I’ve never tried before Larger package sizes 19 Better prices, promotions Better quality 7 7 Wanted to try a new brand I found Is natural/ organic 23 Wanted variety/a change from my normal routine Supporting local businesses 5 More sustainable, better for the environment Using recyclable packing materials Shares my values The company treats its employees well Is cleaner/safer 50 Products are in stock 49 14 3 20 6 6 3 11 7 14 2 Is available where I’m shopping (ie, in-store or online) Novelty Personal choice Purpose-driven Quality/organic Convenience Health/hygiene Availability 5 Value 75 25 25 37 14 7 25 Gen Z/ millennials Gen X 37 64 52 41 65 48 14 12 15 3 1 5 21 19 17 27 17 21 15 27 19 7 7 4 11 2 5 25 15 15 5 1 3 4 5 11 9 14 12 9 1 9 4 0 1 12 17 13 8 2 10 All consumers x Net % of respondents per category 5 7 4 Baby boomers2

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