HiteJinro finds breakthrough with merchandise collaborations
HiteJinro's popular Jinro Soju and its brand mascot, a toad / Courtesy of HiteJinro
By Kim Jae-heun
HiteJinro is working on enhancing its brand image in the sluggish liquor market by selling merchandise and collaborating with fashion firms. In the long term, the brewery aims to secure future customers while targeting the global market by increasing overseas sales volume.
The alcoholic beverage market here had already been on a slow decline since 2016, before the COVID-19 pandemic struck and had a major impact.
According to the Korea Agro-Fisheries & Food Trade Corporation, the market volume was at 8.9 trillion won in 2019, down by 4 percent compared to the 2015 volume, when it was at its highest since 2011.
The government's social distancing guidelines, designed to curb the increasing number of new daily cases, have banned gatherings of more than four people. This situation has led to a decline in alcoholic beverage consumption, as well as liquor companies' sales. In the first quarter of this year alone, beer and soju sales declined by 8 percent and 4.4 percent, respectively. Soju is the most popular alcoholic beverage in the country, based on a traditional alcoholic beverage originally made from distilling rice.
HiteJinro's operating profit also saw a 14 percent dive to record 43.9 billion won during the same period, while its sales of 484 billion won showed a decline of 1 percent.
To overcome these difficulties, the brewery giant is investing in marketing to attract future customers while striving to hold onto its current ones. It is focusing on the future demand for beer and soju, which are expected to soar in the post-COVID-19 era.
Last August, HiteJinro launched its first pop-up store in hip Seongsu-dong, selling various kinds of merchandise such as soju glasses, bags and stationery with its brand mascot, a toad. This promotional event ended in April with a total of 10,000 people having visited HiteJinro's “goods stores” across the country, including in Busan, Daegu, Jeonju and Gwangju. Customers were mostly in their early and mid-20s.
“The company's profitability has decreased due to the social distancing guidelines having banned nightclubs and bars, restricted late-night restaurant operations and declining interest in hostess bars in the younger generation. So the channels for promoting our brand image have become restricted. Through our pop-up stores selling our brand merchandise, we are looking forward to attracting new customers while keeping the existing ones,” a HiteJinro official said.
It also collaborated with local convenience store brand CU and food and beverage firm CJ CheilJedang to sell side dishes that go with beer and soju.
HiteJinro revealed recently that it is entering international markets in the United States, Hong Kong and Singapore with its popular beer, Terra. In the case of soju, HiteJinro saw its sales skyrocket in the first quarter of this year by 83.8 percent in China, compared to that of a year ago.