Fast Food Industry in Korea

In recent years, the fast food industry in Korea has undergone significant changes, driven by cultural shifts, economic factors, and evolving lifestyles. The proliferation of international and local fast food outlets can be attributed to the increasing demand for convenience and quick meal options, particularly in urban areas. For instance, a survey conducted in 2013 revealed that 12% of middle school students were purchasing fast food three or more times a week, up from 11.2% in 2010. This trend reflects a broader societal shift toward fast dining solutions.

The Evolution of Fast Food in Korea

Traditionally viewed as unhealthy and inexpensive, fast food in Korea has transformed into a more appealing choice with healthier ingredients. Fast food chains have actively worked to improve their image and product offerings. The South Korean foodservice market is now dominated by fast food operators who consistently launch set meal menus at competitive prices and offer diverse promotional discounts throughout the year. Consequently, the full-service restaurant market is experiencing a decline as inflation and economic downturns make consumers less willing to spend on dining out.

Market Dynamics and Consumer Trends

As of 2017, independent restaurants in Korea have seen growth in terms of value sales and outlet numbers, although chain restaurants continue to perform better overall. The success of chain restaurants can be attributed to their affiliation with large global brands, which provide them with more resources to adapt to new technologies and consumer preferences. The influence of Western culture has significantly impacted the foodservice landscape in Korea, leading to a rise in the popularity of burger-serving restaurants.

Fast food has recorded solid current value growth, particularly due to the increasing number of single-person households in South Korea. This demographic shift has created a growing demand for simple meal solutions such as fast food or home delivery. The fast food restaurant has become a standard component of the global dining scene, and Korea has embraced this trend, with the number of fast food outlets rising rapidly since the 1988 Seoul Olympic Games. Currently, there are around 1,500 fast food restaurants operating in Korea.

Consumer Benefits and Preferences

A study conducted to explore the relationship between consumer benefits of eating out and the significance of fast food restaurant attributes in Korea utilized a survey of 279 fast food patrons. The findings indicated that consumer benefits could be categorized into two dimensions: hedonic and utilitarian. Hedonic benefits, which include mood enhancement, fast service, cleanliness, taste, staff friendliness, and facilities, showed a positive correlation with consumer satisfaction. Conversely, utilitarian value focused on reasonable pricing, quick service, and promotional incentives.

Moreover, hedonic value had a more significant impact on purchasing frequency than utilitarian value. This evidence suggests that Korean consumers are more inclined to choose fast food restaurants based on hedonic benefits rather than utilitarian ones. As a result, marketers in the fast food sector should prioritize hedonic factors to attract customers effectively.

Demographic Insights into Fast Food Consumption

The consumption of fast food products in Korea has surged over the past decade, prompting an investigation into the frequency of consumption among South Koreans for various Western-style and Korean-style fast food items. Data were collected from 1,745 individuals aged 12 to 64, encompassing both urban and rural areas. The study revealed that fast food consumption is predominantly among individuals under 30, particularly single females residing in Seoul, many of whom are students or young adults with only elementary school education. However, consumption patterns were found to span all income levels.

Case Study: Mom's Touch

For our marketing project, we focused on the Mom's Touch chain of restaurants, a South Korean chicken burger brand that has gained significant popularity. As of 2015, Mom's Touch operated over 650 retail locations across South Korea, with its name reflecting the idea that their food is made with the care and attention of a mother preparing meals for her family.

The core offerings of Mom's Touch include chicken burgers, chicken wings, and traditional hamburgers. What sets Mom's Touch apart is its introduction of Korean-style burgers, such as the bulgogi burger and spicy bulgogi burger, tailored to local tastes. The brand's marketing strategy has primarily relied on comedic television advertisements, highlighting the larger portion sizes compared to competitors.

Mom's Touch has also made strides in the United States, becoming the first Korean burger brand to enter the American market. The company opened its first North American branch in Concord, California, on January 1. The restaurant, which occupies approximately 130 square meters, can accommodate around 40 customers and features an outdoor patio to take advantage of the warm Californian climate. Additionally, it offers customizable sauces for discerning diners.

Currently, Mom's Touch has successfully expanded its operations internationally, with establishments in Taiwan, Vietnam, and the United States. The brand has five operational locations in Taiwan, with plans for further expansion in Vietnam. The company's entry into the American market is noteworthy, as it marks a significant milestone for a homegrown Korean burger brand. The organization aims to continue expanding its global presence while maintaining its success in the domestic market.

Conclusion

The fast food industry in Korea is evolving rapidly, driven by changing consumer preferences and economic factors. As the demand for convenient dining options grows, fast food chains are adapting to meet these needs while also working to enhance their image and product offerings. Understanding the dynamics of consumer behavior, particularly the hedonic and utilitarian benefits, will be crucial for the industry's future growth. With successful brands like Mom's Touch leading the way, the fast food landscape in Korea is set to continue its trajectory of expansion and innovation.

References

• Statista. (2021). Fast Food Industry in South Korea.
• Euromonitor International. (2018). Foodservice in South Korea.
• Kim, S. (2019). The Rise of Fast Food Consumption in Korea.
• Mom's Touch Official Website. (2021). Company Overview.