Insights

One in every four food and beverage purchases in Korea now takes place online. According to the Samjong KPMG Economic Research Institute, online penetration in food reached 28.5% in 2025, while domestic food and beverage retail sales stood at KRW 184 trillion — up just 2.0% year-on-year. Overall market growth has slowed, yet channels, consumers and technology are being reshaped simultaneously. The report identifies AI transformation as the variable that will determine competitiveness in this era of complexity.

Channels are multiplying; consumption is purpose-driven. Online food transactions expanded from KRW 10.4 trillion in 2017 to KRW 52.7 trillion in 2025, with mobile now accounting for 79.9% of the total, up from 62.0% in 2017. Consumer behavior has shifted in parallel. With price as the top purchase criterion, shoppers split bulk and planned purchases into online channels and immediate, small-basket purchases into offline ones; delivery speed has become a benchmark for choosing platforms; and multi-homing across several platforms by purchase occasion is now routine. Retail operations face demands for complexity, volatility and real-time responsiveness all at once.

Seven AI initiatives. The report frames the industry's response along seven initiatives: hyper-local quick commerce, retail media networks (RMN), the customer-to-manufacturer (C2M) production model, phygital retail, green logistics, membership-as-a-service (MaaS), and agentic commerce. The market opportunity is quantified: Korea's quick commerce market is projected to grow from USD 1.1 billion in 2020 to USD 4.7 billion by 2031, and its retail media market from USD 1.0 billion in 2019 to USD 6.0 billion by 2028. Deployment is already under way. Baemin's B-Mart has upgraded its micro-fulfillment operations with AI-based rider dispatch and machine-learning demand forecasting, while the ready-to-eat rice product Kurly co-developed with CJ CheilJedang under its Kurly Only strategy sold out its initial production run within three weeks of launch, surpassing 240,000 cumulative sets sold as of September 2024.

The buyer itself is changing: agentic commerce. The most symbolic shift is in who does the buying. In September 2026, GS Retail officially launched a dedicated plug-in connecting its app to ChatGPT for conversational product discovery, while Oasis Market extended its AI assistant MAY across the entire grocery journey — from product search to cart to checkout. From consumers searching on their own to AI agents exploring, recommending and paying on their behalf, Korean food retail is at the early stage of that transition.

Implications from an M&A perspective. First, in a market growing at around 2%, growth is ultimately a question of share consolidation — pointing to bolt-on acquisitions of logistics assets such as micro-fulfillment centers, and consolidation across channels. Second, with all seven initiatives hinging on the speed of capability acquisition, acquisitions of and minority investments in retail tech, logistics tech and ad tech companies are likely to accelerate. Third, the rise of retail media and subscription memberships suggests retailer value is shifting from product margins toward first-party data and traffic assets — a potential basis for valuation re-rating. Fourth, as agentic commerce spreads, alliances and equity partnerships with AI platforms may emerge as a new deal type.