Abstract
This study examines changes in the online food market in South Korea, identifies this market’s potential for sustainable growth, and analyzes the causal relationships between media channels (mobile and PC-based devices) and product groups (fresh food, processed food, and food service). Whereas prior research has mainly focused on PC-based online shopping, this study analyzes the market for different media and product groups using Statistics Korea’s monthly time series data and the vector error correction model. The results reveal that PC-based online shopping has a long-term equilibrium relationship with mobile shopping in the online food market. However, in the short term, the mobile fresh food and food service transaction amounts are in a feedback relationship, while mobile processed food transaction amounts have a negative effect on other variables. In turn, PC-based online shopping has a positive effect on mobile shopping. In addition, consumer preference is shifting from PC-based devices to mobile devices, and demand is expanding from processed food to fresh food and food service. The results imply that marketers should both prepare for the emergence of new media and expand their product groups—their focus should be on expanding services rather than goods. In conclusion, for the sustainable growth of the online food market, it is essential for the market participants to cope actively with the new environment surrounding the online food market, and enhance their sustainability to minimize the negative effects from technological advances as consumer preference is continuously changing and information technology and online media continue to develop.
Highlights
An increasing number of consumers are purchasing food online via PC-based devices and mobile devices— in South Korea, which has one of the highest Internet and smartphone penetration rates in the world
This study analyzed the causal relationships of time series data using the vector error correction (VEC) model to gauge the sustainable growth potential of the South Korean online food market with advanced information and communication technologies (ICT) services
The causal relationships between media devices and product groups of online food shopping were examined using data published by Statistics Korea
Summary
An increasing number of consumers are purchasing food online via PC-based devices (personal computers and laptops) and mobile devices— in South Korea, which has one of the highest Internet and smartphone penetration rates in the world. Approximately 12.3% of Korean retail food is purchased online [1], compared to an average of 3.4%, 1.5%, and 1.8% in the Asia-Pacific region, North America, and Europe, respectively [2]; as retail food is traded through various retail channels, this is not a small proportion. This growing trend of online food shopping is primarily due to the emergence of mobile shopping and the diversification of services. The delivery of prepared food has flourished, and numerous food delivery services, such as Baedal Minjok and Yogiyo, are currently in operation in South Korea [7]
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