IHA Staff recently made a market visit to South Korea in preparation for a potential trade mission to that country in 2018. The visit included touring major retail outlets/malls, meeting with key distributors to better understand the market, and meeting with relevant key retailers.
Distributors met with included Venta Korea Co., Ltd., household appliance distributor for Vornado of the USA and Venta Airwasher of Germany, as well as bakeware specialist representing Wilton Brands; Electrom, Inc., a large and small appliance distributor representing KitchenAid, Whirlpool, and Maytag among others; and Hanway Trading Co., Ltd., a specialist in department store supply and representing brands such as Villeroy & Boch, Casa Bugatti, Le Creuset, Thermos, and Libbey Glassware, as well as other tableware and kitchenware suppliers.
A summary of the major sales channels and players in the Korean market include:
Brick & Mortar:
- – Department Stores – Lotte, Shinsegae, Hyundai, Galleria
- – Hypermarkets – Costco, Emart, Home Plus, Lotte Mart
- – Home Appliance Stores – Samsung, LG Best Shop, Hi Mart, Price King
- – Flagship/Road Shops – Kitchen Aid, Miele, Whirlpool, GE, etc.
- – TV Home Shopping – GS Home Shopping, CJ Mall, Lotte Home Shopping, Home & Shopping
- – Internet Shopping Malls – GS Shop, CJ Mall, Lotte.com, Shinsegae Mall, AK Mall
- – Open Markets – A.Auction, 11st, G Market, Interpark
The strongest channels in South Korea appear to be the Hypermarket channel and the Internet/TV Home Shopping channels. Department stores are still relevant, but mostly for branding and visibility purposes, most consumers will make their purchase through other channels once seeing the product in department stores.
An important takeaway from meeting with both distributors and retail buyers is that in many cases, the retail buyers do not purchase directly from overseas brands/suppliers, but rely on their local distribution partners/vendors to affect these purchases and maintain inventory. Therefore, importers and distributors play a critical role in the success of international brands in the South Korean market.
IHA Staff also met with the Korean Trade-Investment Promotion Agency (KOTRA) at their Seoul headquarters. KOTRA has a Foreign Investment in Korea division, which supports the entry and establishment of foreign businesses in Korea. They provide comprehensive services for foreign businesses, including consultations, assistance with investment notification and corporate establishment, and support for business activities in Korea. More information about this division of KOTRA and their services may be found at Invest Korea.