Non face-to-face service spikes as coronavirus spreads

The COVID-19 outbreak has triggered a big demand on “untact” services, which do not require direct contact between businesses and customers, with large retailers expanding their stock for delivery.

According to big data analysis firm Appminder, users of food delivery and online shopping apps increased significantly since Korea confirmed its first COVID-19 case on Jan. 20.

Before the outbreak in Jan 17-19, about 2.73 million people used food delivery apps including Baedal Minjok and Yogiyo. However, in Jan. 31-Feb.2, the figure saw a 13 percent increase to 3.14 million people. In the same period, the number of users of online shopping apps witnessed a 7 percent increase from 1.14 million to 1.20 million.

In the first two weeks of February NS Home Shopping saw 41.3 percent hike in users propelled by a surging online demand on masks compared to the first three weeks in January.

Following the large online purchase demand, hypermarket chains have been raising their delivery capabilities for their online mall customers to fulfill the soaring demands. The retailers have also announced a discount promotions for daily necessities.

According to Homeplus on Thursday, over 300,000 new members joined its online mall in February alone, and its online purchases jumped by 162 percent between Feb. 20 and Wednesday -- the period when the number of confirmed cases of the new virus surged.

In the cited period, the retailer saw the sales of ramen products go up by 75 percent and water products, by 80 percent, on-year. 

Homeplus said it would increase the volume of goods it can deliver for orders made online by 20 percent as part of its efforts to maintain stability in supply and distribution of the daily commodities. From Thursday to until the end of March, the retail chain will also offer discounts of 2,000 commodities, the company said. They include instant rice and ramen and raw ingredients, to fresh products such as eggs and fruit, at lowered prices.

Lotte Mart also said Thursday it was running a discount promotion for daily necessities until Wednesday. The event dubbed, “Cheer up South Korea,” provides meat products and ready meals at discounted prices of up to 40 percent.

Emart has also started a weeklong sales promotion, lowering the price of some 30 commodities by up to 40 percent.

Shinsegae’s online shopping arm SSG said it would ramp up its delivery capacity for SSG Delivery by as much as 20 percent depending on the region to reduce inconvenience for customers, starting from Thursday.

According to SSG, the number of orders made for SSG delivery -- also covers online purchases from Emart -- recorded an average of 93 percent of its delivery capacity across the country since Jan. 28. On weekends, the delivery orders came up to as high as an average of 99.8 percent.

Meanwhile, offline-centric businesses were suffering, evident in the number of users of mobile applications related to the services.

Before the outbreak in Jan 17-19, about 1.39 million people used movie ticketing apps serviced by movie distributors including CGV, Megabox and Lotte Cinema. But for the Jan. 31-Feb.2 period, the number dived to 1.17 million.

In contrast, Netflix saw a 12.8 percent increase in users in the first and second week of February compared to first, second and third week in January.

Public transportation apps also took a hit as people shunned outdoor activities due to the concerns over the outbreak.

Public transportation apps including Korail Talk, KakaoBus and KakaoSubway saw a 10 percent dive in users from 2.81 million in Jan 17-19 to 2.52 million in Jan. 31-Feb.2.

The outbreak also took a toll on job search activities as users of job information app Albamon fell 12.5 percent from 800,000 to 700,000 in the same period.

By Jo He-rim and Kim Byung-wook (herim@heraldcorp.com) (kbw@heraldcorp.com)