Growth rate of drugstores in Korea slows

The number of newly opened health-and-beauty shops in Korea increased 7.7 percent on-year in 2018, a much slower pace than that of recent years, according to data compiled by industry insiders.

The number of newly opened drugstores in Korea had surged between 30 and 40 percent yearly from 2015 to 2017. However, last year’s single-digit growth appears to indicate that the market has reached saturation, industry insiders said. 

The number of Lalavla stores operated by GS Retail even decreased by 18 shops last year. GS acquired Korean business operations of Hong Kong retailer Watsons in 2017, and rebranded the stores as Lalavla.

The data was based on the number of new shops opened by three major retailers -- CJ Olive Network, GS Retail and Lotte Shopping.

CJ’s Olive Young is the largest drugstore chain in Korea, followed by Lotte’s LOHB’s and GS’ Lalavla.

Rather than seeking market expansion, retailers are likely to focus on strengthening the sales capacity of existing shops this year, said an industry insider.

By Kim Hye-soo (clairek@heraldcorp.com)