Korea Sale Festa fails to excite shoppers

Trade Minister Sung Yun-mo, left, speaks at the opening ceremony for Korea Sale Festa in Myeongdong, Seoul, Oct. 31. / Yonhap

By Kwak Yeon-soo

Korea Sale Festa, a three-week sales campaign supported by the government to boost sluggish domestic demand, is receiving a lukewarm response from both retailers and consumers.

The annual nationwide sales event, which will run until Nov. 22, was “joined” by more than 600 online and offline retailers and manufacturers this year, according to its organizing committee.

However, consumers say they cannot feel the festive mood of the government-led sales event, adding the range of products and discount rates are not attractive enough for them to open their wallets.

“Unlike in the past, fewer people tend to fall into the temptation trap of big sales events like Korea Sale Festa,” said Roh Kyung-soo. “We are smart enough to know that annual sales events are for the benefit of profit-starved stores rather than price-sensitive customers.”

Another shopper surnamed Lee said “I noticed nothing special about Korea Sale Festa this weekend. I wouldn't go shopping because I have a feeling that I can get the same item at the same discount later.”

Many retailers said their promotional events and discount offerings both offline and online are part of their internal planning instead of government-led calls.

The Ministry of Trade, Industry and Energy had been organizing the event until 2018, but then handed it over to a private committee, which is under the Korea Chamber of Commerce and Industry.

The ministry still oversees the committee's budget, but lost the right to call on retailers to join the event, according to retail industry officials.

“We will be providing discounts through Nov. 27 to celebrate the store's 26th anniversary,” an E-mart official said. “Part of the promotion is aimed to coincide with China's Singles Day and Black Friday.”

Lotte Group is holding Lotte Black Festa, and putting products on sale at up to 50 percent off until Nov. 7. The promotion is being run at 10 Lotte Group subsidiaries, including Lotte Department Store and Lotte Mart, it said.

The company said it will focus more on offering gifts and rather than discounts to avoid losses.

“A 50 percent discount means 50 percent off the original price not the price right before sale,” a Lotte Department Store official said.

Meanwhile, this year's event stirred controversy as department stores were considering boycotting the event, citing government pressure to offer huge discount rates.

The Fair Trade Commission (FTC) said it would implement a new regulation, obliging department stores to pay half of the discounted amount to the manufacturers of products. For example, when a department store sells a $100 product at $70, it has to pay $15 to the manufacturer.

Department stores and manufacturers feared that the new rule would lower their revenue during the sales period.