Blog 6: Road Shops in Korea

There is war in cosmetic market of Korea. Not only expensive foreign brands, but domestic brands are also popular in Korea. Korean called cheap domestic cosmetic brands as ‘Road shop (Roadside shop)’ because almost every cheap brand shops are located easy place to reach. There are many Road shops in Korea and they also entered in foreign market too. Tourists from Japan, China and other countries visit Road shop, and they buy a lot of cosmetic products in there. There was one survey in Korean women who is 20’s or 30’s.(Open Survey. Co.) 95.2% of respondents answered that they have used road shop brands, and 41.6% said that they use road shop brands regularly. It showed road shop brands are very popular in Korea.

41.9% answered that they use road shops because of reasonable price, 33.5% answered that they used that because of brands’ fame, and 12.8% answered that because of accessibility. Road shops have really reasonable price and many sale seasons. Almost every brand has one sale promotion per one month, and they called ‘brand day’. Top 5 brands have had 250 sale days in last year. And not only price promotion, they do product promotion; buy one, get one free (1+1). In this war, one of brands has sticked to non-sale promotion, but they decided to be adapted, so they did sale promotion too.

And also each road shop brands use customer reward system for their customer value. Some brands have reward system which customers who signed up membership can get discount off certain percent. Other brands have reward system which provides differentiated service to their loyal customers. For example, ‘Innisfree (Top 1 road shop brand to 20’s)’ has 3 loyal customer levels, VIP, VVIP and GREEN TEA. VIPs are customers who bought 50,000 won (about $50) for 6 months, VVIPs are customers who bought 10,000 won, and GREEN TEAs are who 300,000 won for 6 months. VIP can get 10% discount in brand membership day, VVIP can get 20%, and 30% to GREEN TEA. Moreover, they provide customer’s birthday gift and special kits 4 times per a year to VVIP and GREEN TEA.

Road shop 'brand days' on September, 2014

Lastly, road shop brands use K-pop idol celebrities as their model. The first reason is that their majority customers are teenager and 20’s women so they can get more loyal customers through idol model. The second reason is that they can enter foreign market easily by using K-pop idol model. For example, ‘Nature Republic’ chose Tae Yeon from Girl’s generation and EXO as their model. They already entered 12 foreign countries’ cosmetic markets by TaeYeon, but they want to maximize synergy effect in Asian market through EXO. ‘Nature Republic’ gives their models’ photo card to customers who buy certain products, and sometimes provide autograph events in Korea or other countries for their customers.

Tae Yeon

EXO

There are more factors in Road shops’ popularity. Road shop brands focus not only on promotion, place and price, they also focus on product. They provide good quality product, so many customers use road shops because they satisfy with their product’s quality. In Korea, the war in cosmetic road shops is ongoing. 

Road shops in Foreign country

Photos from : http://www.dailycosmetic.com/news/articleView.html?idxno=165522

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