Seminar review, Seminar organized by Korea Food Journal & FISOFT
On October 26, 2021, An online seminar was held in Korea under the theme of “ Health Functional Food Marketing Strategy in The Era of New Commerce”.
# 3 topics in this seminar
△ Health functional food policy direction in the new commerce era (Ministry of Food and Drug Safety Son Young-wook, Head of Health Functional Food Policy Division)
△Health functional food, The Sales strategy based on data-based and subscription economy.
(CEO Kim Seong-soo, FISOFT Co., Ltd.)
△ Live commerce success strategy for health functional food (CEO Lee Hyun-sook, Commission Consulting)
What I learned from this seminar, The regulation of health functional foods should be improved and reorganized in manufacturing and distribution environments according to the changes in the sales and purchase environment such as the acceleration of non-face-to-face environments and online purchases due to COVID-19.
If we look at the changes in the typical purchasing environment, The first is the subscription economy and the second is a new type of advertisement (Live commerce; real time commercial broadcast).
First, The subscription economy consists of three types.
- Membership type in which goods and services are provided by the operator and used during the payment period.
- Rental service type in which necessary products are rented and returned during the contract period.
- Regular delivery type in which products are delivered regularly according to a set schedule.
And The Food market has a close relationship with the regular delivery type.
In accordance with this direction, Manufacturers produce healthy functional foods by 22 types of ingredients and provide them in the form of 30days with small packing. And The online distribution channel provides regular delivery service using their brand.
One of the results of analyzing the SNS big data from the Food and Medical newspaper, The customers considered the most in their selection were ingredients (82.1%) and followed by stability , price, functionality and brand. From this data, It can be seen that the consumer’s consumption has changed in the price priority. Therefore, It is necessary to have the competitiveness to compose customized products for consumers by using big data. For example, Recommendation of health functional food tailored to medical information and health personal characteristics information. Or The customers can directly select and purchase cost-effective products (regular subscription) as one stop system.
Second, the Live commerce (live streaming) market.
The global video streaming market size is expected to reach USD223.98 billion by 2028. And Expanding at a CAGR of 21.0% between 2021 and 2028.
The U.S. live streaming market is expected to reach USD 11 billion by the end of 2021 and hit USD 25 billion by 2023. And The size of the Korea live commerce(live streaming) market is expected to reach 3 trillion won (2020) and 10 trillion won in 2023. (approximately USD 8.5billion)
Live commerce (Live streaming) channel is prioritized as a new strategy selected by Korea health functional food marketers. Live commerce aims to secure a customer database and promote product marketing for the purpose of small volume targeted marketing. And also, These barriers to entry are low and anyone can access it without time and location restrictions. Furthermore, It is possible to freely explain products and sell products through interactive communication.
The 4 factors to consider in live commerce are Brand, Price, Promotion and Broadcasting strategy.
In the case of brands, products with high recognition and high repurchase rate are advantageous, and Due to the characteristics of live commerce, The customer can search the prices from other distribution channels therefore, Live special price or Live special composition are necessary.
In the case of promotion, viral marketing or influencer marketing can be applied. And It is important to deliver sales points during live time and distribute time well with fun elements.
In response to these changes, The Ministry of Food and Drug Safety is considering strengthening
the safety management of health functional food labels and advertisements.
- Reinforcement of responsibility and role for autonomous safety management.
- Reinforcement of autonomous consideration monitoring (build a pre-discovery system such as using AI, Strengthening post-monitoring).
- Management of Live commerce ( controls of unfair advertisements such as broadcasting inspection, Live commerce salesperson management through training)
- Reinforcement of labeling and advertising guidelines for human clinical study.
Through this seminar, we recognize that Manufacturers can be able to get closer to consumers according to distribution channels and laws changes. Therefore, Manufacturers should consider how to react in this market.
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