"It's Cheap Indeed".. On-site at the Hypermarket Version of Daiso [Report]

[Financial News] "There's nothing particularly special, but the prices are so cheap that many people buy them."
On the afternoon of the 16th, around 7 PM, I visited the Emart Cheonggyecheon branch in Jung-gu, Seoul. It was bustling with customers shopping for the holidays, and at one corner of the mart, an employee was busy displaying various milk products in the refrigerator. The employee said, "We are restocking because they are selling well." The place where the milk products were displayed was the 'OK Price (5K PRICE)' corner, attracting consumers. Mr. Kim (51), who was examining the low-temperature pasteurized milk, checked the price tag and added another of the same product to his cart. Mr. Kim said, "It's the first time I've seen it, but the price is cheap, and the volume is smaller than 700mL, so I decided to try it." 
Consumers who visited the store that day naturally turned their attention to the OK Price display. Ultra-low price products ranging from processed foods like ramen and sausages to cutlery sets and bathroom supplies, priced between 880 and 4980 won, tempted consumers. Like the name 'OK (5K)', all OK Price products were under 5000 won. Although it resembled Daiso's uniform price strategy, the big difference was that you could get both food and household goods at once. On one side of the snack corner display, there were 'Cup Butter Cookies', 'Choco Cake' resembling Choco Pie, mini wafers, popcorn, and more lined up. In front of the checkout, there were 'OK Price Sodium Percarbonate', 'OK Price Cotton Pads', etc., catching the attention of consumers right before checkout.
Amid Daiso's dominance in the ultra-low price household goods market, Emart launched the ultra-low price private brand (PB) 'OK Price' on the 14th, challenging the sub-5000 won uniform price market. Although it's early, the response is quite good. 
According to Emart on the 18th, about 5.5 tons of OK Price low-temperature pasteurized milk were sold in three days. During the same period, another flagship product, OK Price sausages, sold 7000 units, and imported frozen pork belly sold over 10 tons. At Emart Everyday, it surpassed the sales of existing brands like No Brand, Peacock, and Naturalism, as well as 'Deal of Life' (Everyday's exclusive PB brand). An Emart official said, "Although it's not long since the launch, we are getting a good response due to the affordable prices."



Emart and Emart Everyday reduced the price of OK Price products by up to 70% compared to general brand products through integrated purchasing and global sourcing. Targeting 1-2 person households, the volume was reduced by 20-50% compared to existing main products. While a liter of milk costs around 2970 won, OK Price low-temperature pasteurized milk is 750mL for 1980 won. A customer I met at the Cheonggyecheon branch pointed to OK Price canola oil, which is sold at 3480 won, nearly 2000 won cheaper than regular products, and said, "It's cheap indeed."
Emart initially launched 162 types of OK Price products, and plans to expand to 250 types in the second half. OK Price displays are operated separately by category.

The ultra-low price strategy through OK Price is differentiated from the existing No Brand by putting 'sub-5000 won uniform price' at the forefront. While Daiso created the consumption habit of 'buying because it's cheap', Emart targeted the demand of 'buying cheap daily necessities while shopping at the hypermarket' by combining the hypermarket infrastructure.
As Emart puts Daiso-style ultra-low price strategy at the forefront, the competitive landscape in the distribution industry is entering into infinite competition. An industry official said, "As hypermarkets officially enter the ultra-low price competition, the price front between convenience stores, online, and household goods specialty stores will become more intense."
clean@fnnews.com Lee Jeong-hwa Reporter