February 25, 2012 08:21
Lotte Department Store is in a quandary over what to call its annual furniture fair that is set to begin on Friday. Until last year, Lotte had focused on household goods for newly-weds. But this year, 10 percent of the furniture on display is designed for singles, and items like single bed and sofas are prominently displayed.
Lotte decided to includes the singles furniture because sales in the category have soared more than 20 percent over the last two years, compared to a mere 5 percent for pieces aimed at newly-weds.
A Lotte staffer said, "It's got to the point where we've got to display singles furniture if we want to post high sales in the fair."
The reason is that the number of one-person households has increased rapidly. There were 2.2 million solo households in 2000, but 3.17 million in 2005 and 4.1 million in 2010, according to Statistics Korea. Now one in five householders is single, either because they put off marriage or because they are divorced.
In a report, the Seoul Development Institute said businesses are responding rapidly to the consumption patterns of singles. In a recent issue, the Economist magazine characterized the economy of advanced countries including the U.S. as a "solo economy."
The percentage of solo dwellers hit an all-time high at 28 percent of all households in the U.S. last year, and they spent appreciably more money than others. In 2010, they spent an annual average amount of US$34,000, more than families two or more members ($28,000 per person). Businesses are gradually tailoring product development, sales, and marketing strategies to the needs of singles.
One Chevrolet ad stars a female driver spending her vacation with a girlfriend, and De Beers, the diamond wedding ring brand, launched an ad campaign to promote "right-hand rings" for unmarried women.
In Korea, E-Mart is selling single portions of carrots, onions and fish instead of the family-sized packs. "About 30 percent of all food and beverage have been reduced in size to meet solo dwellers' needs," an E-mart source said.
According to a survey by the Korea Chamber of Commerce and Industry, the domestic instant rice market grew from W90 billion in 2008 to W150 billion in 2011 (US$1=W1,125).
Sales of home appliances for singles also increased. The market for big TVs (over 30 inches) is stagnating, while sales of smaller ones are growing by up to 10 percent. At Lotte Department Store, sales of small electric rice cookers for two or three persons now account for more than 20 percent of all rice cooker sales, although it sold almost none until a year ago.
The increase in the number of single-person households is also changing the pattern of telephone use. There were 22.13 million subscribers in 2008, but that dropped to 18.63 million last year.
The housing market for singles is booming. According to consultancy Real Estate 114, the number of officetel (studio) apartments in downtown Seoul increased 10-fold from 1,035 in 2009 to 10,775 in 2011.
"The increase in the number of single-person households is the second-biggest social phenomenon after the baby boom," said Kim Byung-do, a professor of management at Seoul National University. "Smaller appliances are one fundamental response, but companies will need to find out solo dwellers' living patterns and habits to come up with more sophisticated strategies."
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