SEOUL: Amid persistently high inflation rates and economic uncertainty brought about by the ongoing war in the Middle East, a frugality movement has seen low-cost consumption surge in popularity in South Korea.
Record sales at discount store chain Daiso Korea have prompted other major retailers to roll out their own ultra-low-priced product lines, while community chat groups sharing tips on saving money are proliferating.
Daiso Korea, which bills itself as “the people’s store” with items priced at no more than 5,000 won (S$4.30), reported record sales of 4.54 trillion won in 2025, up 14 per cent from a year earlier, when it had already set a record of 3.97 trillion won.
Its sales surpassed even Lotte Mart, one of the country’s top three supermarket chains, which reported 4.5 trillion won in sales in 2025.
Daiso Korea has been a separate entity from Daiso Japan since 2023, when it acquired the remaining stake held by its former Japanese partner, Daiso Sangyo, ending a 22-year joint venture.
Consumer economics professor Ok Kyung-young at Seoul’s Sookmyung Women’s University told The Straits Times that Daiso Korea’s success is “driven primarily by its ultra-low pricing strategy amid a market environment characterised by high interest rates, high inflation and a high exchange rate”.
Bank of Korea (BOK) governor Rhee Chang-yong warned in a press statement on April 10 that South Korea’s consumer price inflation rate is set to rise higher than expected due to the global oil price surge caused by the Middle East war.
On April 22, the BOK raised its full-year inflation forecast to 2.9 per cent, up 0.2 percentage points from its March projection, citing energy supply disruptions and heightened uncertainty in both domestic and global conditions.
South Korea is among the worst-hit economies amid the ongoing energy supply crisis, as it imports 70 per cent of its crude oil needs from the Gulf for key export industries such as semiconductors, petrochemicals and cars.
The South Korean won has also faced sustained volatility since late 2025, hit by a strong US dollar, capital outflows, and then the current oil price shocks. It slid to a 17-year low of 1,500 won to the US dollar in late March.
The South Korean government unveiled a 26.2 trillion won supplementary budget on April 10 to cushion the economic fallout, out of which 6.1 trillion won has been earmarked for cash handouts to the bottom 70 per cent of income earners.
This means about 36 million of South Korea’s 51.7 million people are eligible, with one-off payouts ranging from 100,000 won to 600,000 won per person, depending on income level and region.
A survey conducted by South Korean newspaper Chosun Daily in November 2025 showed that nearly 70 per cent of 600 respondents aged 20 to 30 said that they have been trying to reduce unnecessary expenditure in the past six months, triggered by economic factors such as inflation and level of savings.
Daiso, which began rolling out “dupe” cosmetics – low-priced alternatives to luxury brands – in 2024, targeted that group directly, meeting the needs of consumers in their 20s and 30s and recording a 240 per cent surge in cosmetics sales that year.
It has since stepped up collaborations with established beauty brands to roll out cheaper product ranges, including one with celebrated South Korean make-up artist Jung Saem Mool in early 2026 that sold out in its initial run.
“As more value-conscious consumers enter the market, Daiso’s trendy products, wide range and strong value-for-money appeal meet their needs at affordable price points, keeping them coming back,” said Prof Ok.
South Korean office worker Jessica Lee told ST that she has been shopping at Daiso more often in recent years, as it allows her to indulge her shopping habits at low cost.
The 39-year-old visits Daiso at least once a week and regularly checks its shopping app for new releases and trending items.
She buys skincare products such as sunscreen there, and her most recent purchase on April 22 was a foldable cart to transport heavy groceries, priced at 5,000 won.
“It was a new release and incredibly useful at such a low cost. When I score purchases like that, it makes me feel ‘rich’,” Lee said with a laugh.
Daiso’s success has pushed other retailers to double down on their budget offerings too.
Hypermarket chain Emart rolled out a “5K price” product line in August 2025 featuring grocery items such as instant noodles and instant rice priced at no more than 5,000 won in a strategy mirroring Daiso’s.
The line proved so popular that Emart expanded the range in March to include household appliances such as steam irons and hairdryers – priced at roughly the cost of a bowl of ramyeon at a Korean snack eatery.
It is also planning to expand the number of shops dedicated specifically to the “5K price” range from 13 to 24 outlets by the end of 2026.
Emart’s competitor Lotte Mart set up a task force in January to develop a range of products that combine high quality with ultra-low pricing, and launched a bread loaf made with premium ingredients at the low price of 2,500 won on April 16.
The usual price for a sandwich bread loaf in South Korea ranges between 3,000 won and 5,000 won.
With data from the Korea Consumer Agency showing that prices of everyday lunch staples such as gimbap (seaweed rice rolls), bibimbap (mixed vegetables with rice) and kimchi stew have climbed by around 15 per cent since 2023, diners have started to get creative with meal planning.
A “Beggar Map” website to crowdsource information on food under 10,000 won has gone viral, reaching 41,000 visitors within 11 days of its launch on March 21.
The map allows users to rate cheap restaurants and features a noticeboard to share information on the best grocery deals.
The website is a spin-off of the popular “beggar chat rooms” on South Korea’s ubiquitous messaging platform KakaoTalk, which gained popularity in 2023 among users who wanted to share tips on low-cost living.
Chat discussions range from how frozen chicken meat is better value for money to comparing electricity bills and figuring out which appliances use up more electricity.
Sookmyung Women’s University’s Prof Ok said the primary drivers of consumer price increases were dining out and services like haircuts and beauty treatments, and increased oil prices from the Iran situation have further translated to a spike in the cost of living.
“We can expect consumers to reduce spending across all aspects of life, including saving on dining out for the time being,” she said. - The Straits Times/ANN
