Consumer Goods Sector

An Expert's View about Retail Trade and Electronic Commerce in South Korea

Posted on: 11 Dec 2011

Since South Korea opened up its retail market in 1996, foreign retailers, discount stores (hypermarkets), department stores and supermarkets have entered the market. It has grown quickly with large chain stores beginning to dominate.

Consumer Goods Sector in South Korea South Korea has developed into a large and lucrative retail market with the majority of the spending concentrated in the Seoul Metropolitan Area, one of Asia?s most important business hubs and home to half of South Korea?s population. Market overview Since South Korea opened up its retail market in 1996, foreign retailers, discount stores (hypermarkets), department stores and supermarkets have entered the market. It has grown quickly with large chain stores beginning to dominate. As a result of the Korean Government?s reduction of non tariff barriers foreign companies such as Tesco are now enjoying success in Korea. In addition non-store retailing (internet shopping) has rapidly gained in popularity due to high speed broadband and a strong telecommunication infrastructure. Many local distributors/licensees/retailers are keen to import foreign products. The major characteristics of the retail market in South Korea are: ? Well-developed retail districts ? Rapid growth of large retailers ? Increasing number of shopping malls ? Advanced E-commerce environment ? Growing non-store retailing business ? Strong demand for high-quality and luxury imported retail brands ? Diversified tastes/personalisation ? Well-being/health conscious ? Emerging Eco Friendly Consumer Group Influence of the EU-Korea FTA The European Union and Korea signed the Free Trade Agreement (FTA) on 6 October resulting in the removal of 97 per cent of all tariffs cutting ?1.6bn of duties annually for EU exporters from July 2011. The FTA is expected to create more than ?17 billion in new trade in goods and services for the EU. Furthermore, EU companies will have a significant first mover advantage over US companies if, as is likely, the EU-FTA is implemented earlier than the South Korea-US FTA. The FTA will affect a large number of UK products ranging from giftware through to furniture and stationery. For more detailed information contact the UKTI team in South Korea. Key opportunities The consumer goods sector is characterised by several market opportunities in the following sub- sectors: High-end brands (sports & leisure goods, household goods, giftware, interior, etc.) As Korea?s affluence and discretionary spending has surged, so has its interest in international and luxury brands. The middle and upper classes desire products of high end luxury brands, including well known UK brands. Foreign brands have better brand recognition than their local counterparts. Those brands which dominate the high-end market are now moving into the mass market. There are significant opportunities in leisure & sports, household goods, giftware and interior items. Baby and children products The market for foreign branded baby and children?s products continues to grow. Korea has a low birth rate and households with one child are common. As a result, parents who are brand conscious tend to buy high quality foreign products for their child. Foreign brands now dominate the marketplace. Organic and green products There is a growing demand for organic and green goods in Korea. Consumers are conscious of the impact of their consumption on themselves and the environment. This is illustrated in the expanding product ranges in both supermarkets and hypermarkets. Goods for the elderly (Maturity Market) A new and emerging consumer group are people aged over 65. The Korean population is ageing rapidly with 10.7 per cent now above this age. The elderly are well-educated, enjoy high standards of living and have strong buying power. They are willing to pay for quality products for both themselves and their families. Culturally, older Koreans pay careful attention to what they wear and where they live to demonstrate their status to others. They enjoy culture, art, sports and leisure activities. This has opened up new opportunities for UK companies. Latest export opportunities ? Business and Consumer Services Latest export opportunities ? South Korea Getting into the market To compete in South Korea UK companies are recommended to have a capable local distributor, licensee or franchise partner who has an established network in the market and extensive market knowledge. A long-term perspective and a reliable partnership between supplier and their local partner is one of the key factors in achieving success. More about doing business in South Korea Contacts Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS). To commission research or for general advice about the market, get in touch with our specialists in country - or contact your local international trade team. Mikyung (Mikie) Park Trade Manager (Design & Consumer Goods) UK Trade & Investment, British Embassy South Korea Tel: +82 2 3210 5624, Email: Contact your local international trade team UKTI Events UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows. Latest events ? Business and Consumer Services Major Events Annual events include: Seoul Gift Show Website address: Import Goods Fair Website address: Seoul Toy & Game Show Website address: Seoul International Stationery Fair Website address: SHE (Show of Home Equipment) Website address: Home & Table Deco Fair Website address: Useful links More about OMIS and other UKTI services for exporters
Posted: 11 December 2011

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