The Consumer Goods Industry in Korea
Consumer products companies face a variety of challenges in Korea. Consumer and shopper behavior can be complex, while retail consolidation and emerging markets bring added competition. The government has been promoting businesses activity more actively. Over the space of just a few years they have signed 13 Free Trade Agreements with the most recent signing with their largest trade partner China.
South Korea’s economy and markets are dominated by export-oriented companies, particularly those that are now household names in the U.S. Other consumer product companies are finding success inside and outside Korea. One Korean snack manufacturer has been moving into mass consumer markets in China, Vietnam and Russia. They discovered that they could export to China the same products it sold to its Korean customers and “not really change their marketing strategy.”
Other consumer goods companies seeking to expand outside Korea are food manufacturer, personal care and cosmetics companies etc. These companies “have consistently offered products that reflect an understanding of consumer needs, and are likely to do well overseas.”
The South Korean population is the world's fastest-aging and younger people are getting married later or not at all. The average age of first-time marriages last year was 32.2 for men and 29.6 for women, up from 27.8 and 24.8 in 1990. One-person households in South Korea made up 25.3 percent of the total in 2012, a share that is on track to grow to 34.3 percent in 2035, according to Statistics Korea. The Korea Institute for Industrial Economics and Trade expects the spending power of single-person households to reach $113 billion by 2020, doubling from 2010.
Taking Advantage of Consumer Trends
As South Korea's population rapidly ages, makers of consumer goods from washing machines to packaged foods and pet products are increasingly targeting those who live alone. Spending by those who live alone is on the rise. While the market has been sluggish over the past two years these singles continue to spend. To woo consumers one electronics company in August launched a "Slim Style" refrigerator that is narrower and taller than ordinary fridges and is "optimized for the lifestyle of single-person households. South Korea's largest food manufacturer, is expanding a singles-focused marketing strategy launched last year for its prepared foods business. They also hold promotional events and open cooking classes for singletons, especially to office workers and college students.
Quality Over Price
Korea’s vast export business, market openness via 13 Free Trade Agreements, have contributed to increased competition for consumer goods products. The Korean consumer wants the best and is willing to pay for it. Cheap, low price consumer products that have tried to enter the Korean market have failed. While many high quality consumer brands have successfully been launched in Korea.
Hiring Consumer Goods Talent in Korea
To launch, expand or build a quality consumer brand company in Korea it takes hiring the right talent. For multinational companies you need to hire bi-lingual, experienced managers that understand the Korean consumer, demographics, best practices within consumer businesses and be able fit well within the corporate culture of the hiring company. Expanding into Korea is not the same as setting up a mom and pop’s fruit stand in rural America. Competition for the best managers and leaders in Korea is fierce. A hiring company must have a strong value proposition, vision and be able to offer a competitive compensation and benefits for the right hire.