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Tag: south korea

  • ‘Grocerant’ Offers Korean Consumers Another Great Way to Enjoy US Beef

    ‘Grocerant’ Offers Korean Consumers Another Great Way to Enjoy US Beef

    Working to displace competitors of US beef in the growing South Korean retail sector, USMEF used social media and a celebrity chef to showcase US beef ribeye, striploin and chuck flap tail during a “grocerant” promotion.

    The event was held at PK Market, a high-end grocery selling premium food items, and was funded by the USDA Market Access Programme (MAP) and the Beef Checkoff Programme.

    PK Market, part of the vast Emart retail chain, includes a steakhouse called “Butcher’s Table” that allows consumers to enjoy steak cuts they purchase in the store’s grocery area.

    “The Butcher’s Table is what is referred to as a “grocerant,” meaning that it as a grocery store and restaurant under one roof, and it is becoming a big part of the ‘steak culture’ in South Korea,” explained Jihae Yang, USMEF director in Korea.

    “It also is part of a move toward ready-to-eat and pre-packaged meals favored by busy people. Korean consumers buy a steak and then take it to the Butcher’s Table kitchen and have chefs there cook it with vegetables. This service provides the customer with a great steak that might cost two or three times more at a restaurant.”

    During the promotion, USMEF had celebrity chef Mihal Ashminov grill US beef cuts. While the guests enjoyed their steaks, Chef Ashminov provided them with information about the advantages of US beef and explained a few of the best ways to cook a steak.

    To draw attention to the promotion, an online campaign was launched that included Syrup Table, the most popular Korean “foodies” app with a total of 13.5 million subscribers and 1.2 million monthly active users. USMEF’s promotion was featured on the main rolling banner at the top of the Syrup Table website. A total of 5,700 participated in the campaign, with 12 winners chosen for the US beef tasting opportunity.

    Officials with Emart described the event as a great opportunity to experience US beef steak and to promote superior quality of US beef to PK Market customers, adding that Emart recently began promoting thick-cut steak at locations across the country.

    “Retailers in Korea have been trying to offer various meat items and new applications to address consumer trends in the market,” said Mr Yang. “Steak is currently one of the most popular food trends and as a result, some retail chains are developing various steak items. Retailers are also taking an interest in steak items that address the desire for convenience and quick meals.”

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  • South Korea dominate Vietnam entertainment industry

    South Korea dominate Vietnam entertainment industry

    They include YG Entertainment, which manages many of Korea’s biggest stars like Big Bang, 2NE1, PSY, Epik High, Choi Ji Woo, Black Pink and Lee Jong Suk, its subsidiary YGKplus, the country’s leading modelling agency, and Naver.com, the country’s biggest search engine and online media and entertainment channel.

    The Korean companies are seeking to tie up with Multimedia JSC in entertainment and fashion.

    They will send their stars to participate in major entertainment events in Vietnam like the Vietnam International Fashion Week and also create opportunities for Vietnamese models in Korea.

    Besides YG Entertainment and Naver.com, many other Korean companies in movies, the media and entertainment also have plans to enter the Vietnamese entertainment market.

    The Vietnam Film Distribution Association said the market was dominated by foreign distributors, many of them Korean.

    Vietnam now has more than 50 cinema chains. Korean-owned CJ CGV Vietnam is the largest in the market with 30 cinemas in 10 major cities. Lotte Cinema, also owned by South Korea, has 16 cinemas.

    A CJ CGV executive said each year the company opened around 10 cinemas in Vietnam and expected to reach 60 by next year.

    Market observers said South Korean investors saw plenty of opportunities in the Vietnamese entertainment industry.

    They find that the Vietnamese entertainment market is still in a fledgling state while the demand for entertainment has skyrocketed in step with living standards, meaning the sky could be the limit for investors.

    The fact that Vietnam and Korea have many cultural similarities means Korean entertainment investors with their quality products can attract Vietnamese audiences easily.

    On the commercial side of things, there are several trade agreements Vietnam has signed which offer opportunities to foreign investors, including those in the entertainment industry.

    Analysts said all this meaned pressure on domestic entertainment companies, who could lose the market completely to the Koreans if they were slow to react.

    In 2005 CJ CGV and Vietnamese company VIFA established a joint venture called CJ-VIFA whose first project was the drama “Mui Ngo gai”.

    Then CJ CGV bought out Megastar, the largest chain of cinemas in Vietnam at that time. At the beginning of 2014, after closing the acquisition, Megastar was renamed CGV.

    CGV now accounts for over a half the Vietnamese cinema market.

    It also dominates the film import market, and by showing more movies than its rivals, including blockbusters, CGV has become popular among the public.

    CJ CGV’s strategy is a vital lesson for local entertainment companies.

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  • Nissan, BMW, Porsche face fuel economy probes in South Korea

    Nissan, BMW, Porsche face fuel economy probes in South Korea

    South Korea has filed a complaint against Nissan Motor’s South Korean unit alleging that the Japanese car maker manipulated the fuel economy test results of its Infiniti Q50 sedan, a government official said on Tuesday.

    The transport ministry is also investigating BMW and Porsche on a similar matter, the official, Koh Sung-woo, told Reuters.

    The Seoul Central District Prosecutors’ Office has launched a probe into Nissan after a criminal compliant was filed by the ministry, a spokesman at the office said.

    Makers of imported cars, which have surged in popularity in recent years in South Korea, have been facing growing scrutiny in the country following Volkswagen’s emissions-test cheating scandal.

    The latest government action follows an announcement by South Korea’s environment ministry last month that the sale of 10 models of Nissan, BMW and Porsche had been banned after the carmakers were found to have fabricated documents on emissions and noise-level tests. The models banned include BMW’s X5M and Porsche’s Cayenne and Macan models.

    The probe was then expanded to whether the three car makers have falsified documents on fuel economy tests of the 10 models as well, Koh said.

    Koh said Nissan overstated the fuel economy of the Q50 so that it is 3.4 percent higher than the actual test result. “They manipulated the test results of the car to make the fuel economy look better,” he said.

    Nissan Korea said it reported “some inappropriate problems” in certification documents to authorities last year, saying the errors were caused by the misconduct of a manager at the company.  “We express sincere regret over those issues,” a spokeswoman said.

    Representatives of BMW and Porsche in Seoul said the companies have not been notified of the probe.

    The complaint adds to the troubles in South Korea for Nissan, which is already accused of cheating on emissions of its Qashqai diesel model. Last week, a South Korean court sided with the government which had said the Japanese automaker used a so-called defeat device in its Qashqai sport utility vehicle to turn off its emissions reduction device during regular driving.

  • Progress on bringing Apple Pay to South Korea ‘still in an early stage’

    Progress on bringing Apple Pay to South Korea ‘still in an early stage’

    Though Apple is working on launching Apple Pay in South Korea, the mobile payments system is still some ways out —and the company has yet to hold a critical meeting with the government, according to a local report.

    A legal director and a senior counselor from the company visited Korea in November to talk with the country’s financial officials. At the time however, Apple’s team is only said to have explained how Apple Pay works —including the tokenization of transactions, for security purposes —while promising to partner with local credit card firms.

    To actually launch in Korea, Apple will need to meet with authorities again to determine whether it should be registered as an electronic financial business operator. No such meeting is scheduled so far.

    On the private side, meanwhile, an official with one local card company told the publication that “work with Apple is still in an early stage.”

    This stands in contrast with Google, which is expected to launch Android Pay in Korea before Apple can get a foothold. The company is not only said to be planning a meeting on the electronic financial business operator issue, but working with card companies like KB Kookmin, Shinhan, Lotte, and Hyundai on online and NFC-based payments.

    It’s believed that Google will probably focus on online transactions first, as most Korean retail stores reportedly lack NFC-ready sales terminals. The situation has in fact given Samsung an edge, since Samsung Pay can be used at any terminal with a magnetic card reader. The firm isn’t registered as an electronic financial business operator, though, since it doesn’t actually generate money from transactions.

    Apple Pay is now accepted in a dozen countries. Apart from the U.S. this includes places like Australia, Canada, China, France, Russia, and Japan. Taiwan has been confirmed as an upcoming market, but hints of a German launch have yet to solidify.

  • Korean multiplex chain leads booming movie market in Vietnam

    Korean multiplex chain leads booming movie market in Vietnam

    CJ-CGV has quickly emerged as the dominant cinema chain with more than half of the market share. South Korean multiplex chain CJ-CGV, which currently has 38 cinemas and 247 screens in Vietnam, managed to triple its net profit last year to VND93.4 trillion ($4 million).

    The chain has aggressively expanded in Vietnam since 2011 when it spent $73.6 million to acquire an 80-percent stake in Megastar, one of the biggest local operators at the time.

    After the acquisition, CGV maintained an impressive growth rate with revenue hitting VND870 billion in 2012 and VND1.1 trillion in 2013, equivalent to year-on-year increases of 45 percent and 27 percent. The operator also reported substantial growth in net profit, generating on average VND120 billion per year; three times higher than the best achieved by Megastar.

    In the next two years, despite steady revenue growth, CGV recorded a significant decline in net profit due mainly to massive investments in new cinemas and foreign exchange fluctuations.

    Its 2014 revenue only matched 2013, and net profit tumbled by 40 percent to VND70 billion. In 2015, while revenue soared by 60 percent to VND1.76 trillion, net profit slumped by 55 percent to VND31.5 billion.

    CGV has established itself as the leading distributor in the country. It has won exclusive distribution rights to handle movie releases for giant film studios like Universal, Paramount, Disney and Warner Bros, and also topped the distribution rate for local movies.

  • Vietjet to launch Danang-Seoul route and offer promotion for Valentine’s Day

    Vietjet to launch Danang-Seoul route and offer promotion for Valentine’s Day

    Vietjet is to open its new international route from the central Vietnamese city of Danang to Seoul (Korea) in a bid to meet the increasing travel demand of tourists, businessmen and individuals between the two tourism-attraction cities. The new route will take off on May 31, 2017 with the flight time per leg of 4 hours 30 minutes. 

    The Danang-Seoul route will be operated on a daily basis. The flight from Danang departs at 23:45 (local time) and arrives in Seoul at 6:00 (local time). The return flight takes off at 7:00 (local time) and lands at 9:40 in Danang.

    In celebration of the new route and on the occasion of Valentine’s Day, the airline will run a three-day promotion offering 500,000 air tickets priced from only HK$8 from February 14 to 16, 2017 at www.vietjetair.com. The promotion applies for all international routes from Ho Chi Minh City, Hanoi, Hai Phong and Danang to Seoul, Busan (Korea), Hong Kong, Kaohsiung, Taipei, Taichung, Tainan (Taiwan), Singapore, Bangkok (Thailand), Kuala Lumpur (Malaysia), Yangon (Myanmar) and Siem Reap (Cambodia) from March 1, 2017 to December 12, 2017 (excluding national holidays). As for the Danang-Seoul route, the promotion is available from May 31, 2017 to December 31, 2017.

    Following the international routes from Seoul to Ho Chi Minh City, Hanoi and Hai Phong, Danang is Vietnam’s 4th destination to be connected with Korea’s famous capital of Seoul, marking the 5th route to be operated by Vietjet between Vietnam and Korea. Vietjet also plans to expand its international network in 2017, looking to boost the regional trade and integration.

    Danang, a port city, is Vietnam’s third largest city and is the main commercial and tourism centre of central Vietnam. The city is well known for its clean environment, beautiful beaches, and good public services. It is often referred to as the most livable city in Vietnam and is one of the fastest growing cities in Vietnam. 

    Seoul is ranked as one of the world’s top favorite cities including New York and Tokyo to name a few. Despite its modernization, the Korean capital is still famous for is typical Korean culture, convenient transportation system, extremely rich food culture together with developed entertainment and shopping industry, making it also one of the world’s top favorite cities.

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  • Lotte looks to US to boost sales of 3 drinks

    Lotte looks to US to boost sales of 3 drinks

    The Korean energy drink Hot 6 will take on Red Bull and Monster in the American market from this month.

    Lotte Chilsung Beverage said Thursday, it will start selling the caffeinated drink from this month in the U.S., starting in on the West Coast.

    The company said it has already shipped 2,000 boxes of 30 units each.

    Korea’s energy drink industry saw a boom in the early part of this decade and became a 100 billion won ($87.3 million) market. Pioneers Red Bull from Austria and California-based Monster were followed by the launch of Hot 6, which sells for a cheaper price.

    But growth has stalled in recent years with the number of health-conscious consumers rising in Korea. Health authorities have also warned the public not to drink too many caffeinated drinks.

    According to industry sources, the energy drink market in Korea has slipped to 70 billion won and Hot 6 has a 60 percent market share.

    Its U.S. marketing will begin at the Genesis Open 2017 PGA golf tournament in California, which will be held from Feb. 13 to 19.

    Lotte Chilsung Beverage said it will introduce the drink with the slogan “Brand New No. 1 Korean Energy Drink” and emphasize its natural caffeine extracted from guarana.

    Lotte’s global ambition will continue by expanding U.S. retail sales of its Milkis and Chilsung Cider soft drinks. Milkis was introduced in 1989 and has loyal customers fond of its unique, yogurt-like flavor. Chilsung Cider was a pioneer in Korea’s soft drink industry when it was launched in 1950.

    Until now, Milkis, a white opaque fizzy drink, and Chilsung Cider, a Korean version of Sprite, have been only available online or in small retailers and Korean markets in the United States.

    “There are five flavors of Milkis being sold in Korea, including strawberry and melon. If the local response is good, the possibility of launching different flavors in the U.S. also exists,” the company spokesman said.

    The company said two of its drinks will be retailed at 2,000 branches of Kroger, the No. 1 supermarket chain in the U.S., from March.

    “Lotte Chilsung Beverage aims to create a ‘Hallyu beverage’ in the U.S. by expanding retail channels to appeal not only Koreans but Americans as well. Hot 6, Chilsung Cider and Milkis will be at the forefront,” the beverage subsidiary said in a statement.

    Lotte Chilsung Beverage’s foray into the U.S. is part of the group’s effort to expand beyond Asia. To become more global, Lotte Group has been holding the LPGA Tour Lotte Championship in Hawaii since 2012 and acquired the New York Palace Hotel located in Manhattan in 2015, renaming it the Lotte New York Palace Hotel.

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  • Winter Olympics: South Korea builds it but will fans come?

    Winter Olympics: South Korea builds it but will fans come?

    Across the road from the pentagonal arena which will host South Korea’s Winter Olympics opening ceremony a year from Thursday, bundles of dead fish dangle from a wooden frame outside Lee Yong-Oon’s shop.

    Most venues for the 2018 Pyeongchang Games are virtually finished and the organisers are about to launch a domestic and international marketing blitz, touting Korean technology, culture and food as they seek to persuade sports fans from around the world to make the long journey to north-east Asia.

    Lee, though, has his doubts. Dried pollack — dessicated during the biting chill of winter — is a speciality of the area, but he thinks Westerners would find his signature product “a bit hard to eat”.

    He is not planning to increase production for next winter, he told AFP, despite his prime retail location and a chance to attract thousands of potential customers.

    With a year to go, many South Koreans express pride that they are hosting the games, and workers are already installing the upper levels of the Olympic structure opposite Lee’s premises.

    The only sporting facility still awaiting completion is a new ski slope for the downhill events — none of the existing resorts have high enough mountains to provide the vertical drop required according to regulations — but even that is 85 percent finished.

    A roomy show flat in the Olympic village, complete with bedspreads covered in sports symbols, has two sets of double glazing to protect against the cold.

    Looking out from the top of the vertiginous K125 ski jump, tiny staff in dayglo green jackets far below prepare the landing area snow for a test event, the cross-country course runs through wooded hills nearby, and wind farm turbines line the horizon.

    But marketing has so far been conspicuous by its absence. On the road from Seoul, the first mention of the Winter Olympics is a plain white sign on a hillside around 30 kilometres (19 miles) from Pyeongchang.

    It is a notable contrast to the next host China, where multicoloured billboards already line highways more than an hour from the venues, despite the fact that its Games are not until 2022.

    A Gallup Korea survey released Tuesday said nearly half of South Koreans — 49 percent — were not interested in the Winter Olympics, with 19 per cent having “no interest at all”. Only 48 percent were interested.

    The question of promoting the Pyeongchang Olympics — taking place an intercontinental flight away from the traditional markets of North America and Europe — is increasingly important.

    “It’s a fundamental issue,” IOC Olympic Games executive director Christophe Dubi told AFP.

    “We must sell these Games, and the challenge today — and we have spoken openly about this with the Pyeongchang organisers — is to engage this effort both at the Korean level and internationally,” he said.

    Even South Korean media have expressed concerns. In a stinging editorial, the Chosun Ilbo newspaper lamented that there was “no excitement or buzz around the Games that are only about a year away” and warned of the risk of “international embarrassment”.

    – ‘Games for Asians’ –

    The push will begin on Thursday, said Lee Hee-Beom, president and CEO of the Pyeongchang Organising Committee for the Olympic Games (POCOG), when tickets go on sale in South Korea. International availability depends on each country’s national Olympics committee.

    Top category seats for the opening ceremony and men’s ice hockey final cost 1,500,000 Korean won ($1,300) and 900,000 won ($800) respectively, but several disciplines ranging from biathlon to skeleton have tickets as cheap as 20,000 won.

    “From February 9th we will have promotions and we will expedite promotional activities around the nation and all around the world,” Lee told AFP, with advertisements on Seoul buses and international television networks.

    Pyeongchang will be the 23rd Winter Olympics, he pointed out, but the Games have only been held in 12 countries so far, all of them in Europe or North America aside from Japan, which has hosted them twice, at Sapporo in 1972 and Nagano in 1998.

    So far winter sports have been “games for the Europeans, games for the Americans”, he said. But with China to follow South Korea as host country, it meant “winter sports become games for Asians”.

    Beijing has declared its intention to have 300 million winter sports fans by the time it hosts the event.

    But at the Yongpyong resort where the slalom events will be held, tour guide Uno Wang — who has been escorting groups from China for 15 years — warned against relying too much on South Korea’s giant neighbour.

    “We usually introduce the Olympics to the people that we bring here but they don’t show that much interest,” he said. “It’s generally like that in East Asia. China is a country that’s not that into sports, especially winter sports.”

    And Chinese tourism to South Korea is under a cloud, with Beijing infuriated by the country’s planned deployment of a US missile defence system, THAAD, in response to nuclear-armed North Korea’s atomic tests and rocket launches.

    Beijing has imposed measures seen as economic retaliation, and Wang says his visitor numbers have fallen by 30 to 50 percent as a result.

    “If the South Korean government goes ahead with the THAAD deployment maybe the numbers will decrease even more — 70 or 80 percent,” he said. “It’s a very serious problem.”

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  • Korean sales +30.9% to $10.6bn as growth slows

    Korean sales +30.9% to $10.6bn as growth slows

    South Korea’s duty free industry saw total sales grow by +30.9% or $2.5bn to a record-breaking $10.6bn in 2016, although senior sources in Seoul tell TRBusiness that sales growth is expected to slow to between 10% to 15% in 2017 – resulting in incremental sales of between $1bn to $1.5bn.

    These estimates nevertheless assume that foreign tourist numbers (primarily Mainland Chinese) continue to increase in 2017 as expected.

    According to senior sources in Seoul, foreign visitors’ duty free purchases amounted to US$7.6bn in 2016, accounting for 72% of South Korea’s total US$10.6bn purchases last year. This sales result includes contributions from all airport, seaport and downtown shops (including internet) sales and ‘domestic duty free’ sales on Jeju Island, although it excludes inflight duty free sales.

    BIG CHINESE TOURIST DEPENDENCY

    Highlighting the dependence on foreign tourists for duty free growth, South Korean travellers’ share of sales came in at $2.9bn last year, which was equivalent to 28% of the national duty free revenue total.

    “In 2015 we had a big impact from MERS on our duty free market from July to October, then the market recovered from November. It meant half of 2015 was impacted by MERS so we had a big 31% sales increase last year,” said a senior industry duty free source in Seoul.

    He told : “Sales to foreign tourists increased about 40% last year in value, about 80% of them are Chinese; but sales to South Korean travellers saw only a 9.7% increase.

    A busy cosmetics counter at the Lotte World Tower duty free shop in Seoul.

    Meanwhile, per capita duty free spending amongst foreign visitors grew last year, allaying fears among duty free operators that changes made to China’s luxury goods import regulations in April might force a reduction in individual spending.

    20.6M FOREIGNERS BOUGHT DUTY FREE

    According to industry figures, a total of 20.6m foreign visitors bought duty free products in South Korea last year – a rise of 28% compared to those purchasing in 2015.

    In addition, 27.9m South Koreans purchased duty free goods last year – an increase of 13.6% compared to 2015.

    “Sales to foreign customers increased 40% in value and the number of foreign customers rose by 28%, so total per capita spending by foreign visitors increased last year,” said the source.

    By contrast, South Korean per capita customer spending slowed slightly in 2016 as total South Korean duty free purchases rose by 9.8% in value, although this was less than the rise in the number of customers making purchases.

    As expected, perfume and cosmetics continues to dominate as South Korea’s largest duty free category accounting for more than 50% of duty free sales, with Lotte Duty Free – the country’s leading operator – generating total sales of $5.7bn, of which perfume and cosmetics sales accounted for almost $3bn. These sales included all of Lotte’s various downtown and airport stores.

    HOTEL SHILLA SALES REACHED $2.6BN

    Hotel Shilla Duty Free was the next biggest operation with total sales registering $2.6bn in 2016 (not including its HDC Shilla joint venture in Seoul) and once again, perfume and cosmetics accounted for a large share of revenue.

    Other South Korean duty free operators – including new entrants to the industry – also registered good P&C sales, with many finding it easier to arrange supply deals with local cosmetics manufacturers rather than international brand suppliers.

    “The numbers are incredible; cosmetics is the number one item for Chinese visitors,” said the senior source. “South Korean cosmetics brands are about 60% of the purchases and imported cosmetics are 40%. South Korean cosmetics are very good quality and the prices are reasonable.

    “South Korean cosmetics companies are developing products to please East Asian customers, as their skin texture is different. They know what products Chinese visitors are looking for. South Korean face mask products are very famous with Chinese customers.

    SOUTH KOREAN COSMETICS GROWTH

    “The other thing is the price gap between the South Korean and Chinese markets. There are big perfume and cosmetics import tariffs in China; also, Chinese people do not trust products made in China, as there are many fake products.”

    While duty free operators are obviously happy to see products fly off the shelves, a number of perfume and cosmetics brands and luxury goods brands have started to limit the volumes sold to individual customers, as suspicions grow amongst some suppliers that not all these purchases are for personal use.

    ‘SURROGATE SHOPPERS’ ARE A CONCERN…

    “Many people are saying that a significant ratio of purchases are by surrogate shoppers,” said the source. “As foreign brands begin to withdraw from China, so mainland tour companies are sending tourists here to buy luxury branded goods and pay them a commission for buying.

    “The travel companies collect these products for re-sale in China, as there is a 30% to 40% price gap between South Korea and China because of the luxury goods tariffs. Chinese wholesalers organise these purchasing trips; they’re common now.”

    Individual brand product purchasing limits also vary, with most international P&C brands – along with top South Korean brands – limiting the number of pieces sold to individual customers to five items. For luxury fashion goods and accessories, many international brands also limit purchases to one or two items per customer.

    “The purchase limits are set by the brands, not the operators; the operators only think of profit. It’s the same around the world,” the source remarked.

    Foreign visitors are the major customers in South Korea’s downtown duty free stores, spending $6.4bn in downtown outlets in 2016, a huge figure which is five times the value of foreign traveller purchases worth $1.1bn in airport duty free shops last year.

    AIRPORT SALES EQUALLY DIVIDED

    Foreign and South Korean customers each accounted for half of the country’s total airport duty free sales that were worth $2.4 billion in total in 2016, of which the major share was recorded at Incheon International Airport.

    South Korean customer purchases were divided equally between downtown and airport shops, with spending reaching $1.3bn in the country’s downtown stores and $1.2bn in international airport shops last year, plus almost $500m was spent in Jeju Island’s domestic airport and seaport duty free shops.

    Foreign visitors accounted for 83% of all downtown store duty free purchases worth a total of $7.7bn in 2016, according to industry figures. Outbound South Korean traveller purchases accounted for just 17% of downtown duty free stores’ overall sales and included online and internet purchases estimated to account for 25% to 30% of total downtown revenue.

    More than 80% of purchases in almost all downtown duty free stores in South Korea were made by foreign customers (primarily Mainland Chinese) with the exception of the Shinsegae Duty Free and Lotte Duty Free Busan downtown shops, where South Korean customers accounted for 48% and 34% of purchases respectively.

    In addition, foreign visitors accounted for 71% of total sales in South Korea’s various SME downtown duty free stores, which recorded combined total sales worth $68m last year, a sales total equivalent to less than 1% of the nation’s total duty free revenue.

    Meanwhile, government policy to increase the number of duty free operator licenses in an effort to reduce large conglomerates’ dominance of the domestic duty free market has led to increased competition.

     

    LOUIS VUITTON STILL DELIVERS…

    “Last year there were 8m Chinese visitors to South Korea,” said the source. “South Korea’s duty free market is very concentrated and it’s difficult to make money as travel agents dominate an important share of the market. If they do not send tourists here there will be no group tour sales, so they receive huge a commission from South Korean duty free operators.

    “Two to three years ago the maximum commission paid was 20% for group tour customers, but nowadays over 30% is being paid. It’s impacting on operator profits. Most small operators and new starters cannot expect a profit – it’s a severe and critical problem in this market.”

    This follows the opening of new downtown stores in Seoul over the past 18 months by Shinsegae Duty Free, HDC Shilla, Doota (Doosan), Hanwha Galleria and SM Duty Free and another four downtown stores are also scheduled to open this year.

    As reported, Lotte has only recently reopened its Lotte World Tower store after winning a new downtown license, while three completely new downtown stores are scheduled to open in the capital city.

    DIPLOMATIC FALL OUT DUE TO MISSILE DEFENCE SYSTEM

    Work is underway preparing the Shinsegae Kangnam and Hyundai CO-EX duty free stores that are scheduled to open in Seoul’s growing southern area by the end of 2017 – along with the SME Top City Sincheon (City Plus) store in the capital’s western region.

    Meanwhile, one large dark cloud on the horizon is the deterioration in South Korea’s current diplomatic relations with China, which are causing serious concern for duty free operators.

    This has resulted in a dramatic reduction of Chinese visitor arrivals in both November and December, according to the Korea Tourism Organization.

    At the same time, South Korea’s current domestic political crisis, after the National Assembly voted to impeach Park Geun Hye over corruption allegations, has left the country in a leaderless limbo with no major statesperson in place to handle the escalating dispute with China – until new presidential elections in the spring of this year.

    GROUP TOUR NUMBERS ARE SUFFERING

    Some operators say this dispute has already prompted Beijing to quietly reduce group tour numbers visiting South Korea in January, as a clear warning that it means business with its protest against Seoul installing the proposed Terminal High Altitude Area Defense (THAAD) defence system.

    “South Korea’s duty free market should be increasing this year by 10% to 15%, but already in January we are losing the group tour market. We have already felt impact from South Korea and China’s tension,” said the source.

    “We will have presidential elections in April or May. Now there is no president as President Park is impeached and the South Korean government cannot react to China properly.

    “For the first half of 2017 we will be impacted by the China group tours situation. Also, Chinese customers are getting smarter and they are looking not only for luxury products, but reasonably-priced products and leveraging down their spend.”

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  • Koreans consume more foreign beef over expensive local hanwoo

    Koreans consume more foreign beef over expensive local hanwoo

    South Koreans consumed more American and other foreign beef than expensive local beef last year, a move that has lowered the country’s self-sufficiency rate for beef to below 40 percent over 13 years, a state-run think tank said Thursday.

    Last year, South Koreans consumed 362,000 tons of foreign beef, accounting for 62.3 percent of the total beef consumption in the country, according to the Korea Rural Economic Institute.

    South Korea halted imports of U.S. beef in 2003 following the outbreak of a mad cow disease. Seoul lifted the ban in late 2008, which led to mass demonstrations among people in fear of their safety.Australian beef came to 178,000 tons, making up 49 percent of total beef imports. American and New Zealand beef stood at 42 percent and 6 percent, respectively.

    Still, the market share of American beef in South Korea has gradually been on the rise in recent years.

    In comparison, South Koreans consumed 219,000 tons of domestic beef, known as hanwoo last year, accounting for 37.7 percent of the total beef consumption in the country, according to the institute.

    It marked the first time that South Korea’s self-sufficiency rate for beef fell below 40 percent since 2003 when it stood at 36.3 percent.

    The decline came as South Korean consumers shunned expensive local beef.

    The wholesale prices of local beef once hit nearly 20,000 won ($17) per kilogram last year.

    Retail prices of the best quality local beef for bulgogi, a grilled marinated beef dish, came to 4,578 won per 100 grams last year, compared to 2,464 won for American beef for bulgogi, according to the institute.

    The prices of local beef have been on the rise since late 2015 as the number of cattle is continuing to fall.

    Domestic farms cut the number of cattle as the prices of local beef went down and the government helped some farms shut down to stem the decline of local beef following a free trade deal with the United States.

    South Korea’s anti-graft law — which took effect in September — is also adding to the woes of the local beef industry.

    Local beef was one of the favorite gifts during major holidays, but was overtaken by health products, according to major retailers.

    The law imposes tight limits on free meals and gifts that can be accepted by government officials, journalists and private school teachers to try to curb the deep-rooted tradition of excessive hospitality. The maximum value of a gift that a person subject to the law can receive has been set at 50,000 won.

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  • South Korea’s Race To 100% Internet Access

    South Korea’s Race To 100% Internet Access

    The proliferation of smartphones in the hands of the entire population — but mostly the elderly and children — are the main cause of these rising internet implementation rates. It’s been reported that senior citizens are one of the larger user groups surfing the web. Dubbed “silver surfers,” those above the age of 60 are mainly using the internet as a means of communication in instant messaging apps.

    From map navigation to shopping, banking, cloud usage and more, nearly every connected area imaginable is rising in South Korean user activity. Data shows three-fourths of respondents were utilizing maps, and over half were playing online games three to four times per week. Of particular interest is the popularity of instant messaging, as survey results show 88.3 percent are using some form of a messenger app.

    Now, although internet connectivity is normally seen as a good thing, there’s always a not-so-shiny side. It was found that 99 percent of respondents go online at least once per week, where they spend an average of 14.3 hours. Teenagers have shown signs of internet addiction, and parents are now enrolling their children in rehab centers for treatment. Given our world’s continual increase in connected devices and services, receiving help for this particular type of addiction may be a very tough road ahead for us all.

    As more people get online to communicate with one another, we just may see internet addiction rehab centers popping up all over.

  • Scuba Diving Equipment Market in South Korea to Grow

    Scuba Diving Equipment Market in South Korea to Grow

    The scuba diving equipment market in South Korea to grow at a CAGR of 5.97% during the period 2016-2020.

    The report covers the present scenario and the growth prospects of the scuba diving equipment market in South Korea for 2016-2020. To calculate the market size, the report has taken into consideration the revenue generated from the retail sales of scuba diving equipment to individual consumers, as well as rental and sports clubs in South Korea. However, the break-up of these end-users has not been provided in the report.

    A trend which is helping to boost market growth is product improvements in diving equipment and apparel. The growing number of value-added and innovative scuba diving equipment launches is an important trend, which is expected to have a positive impact on the market’s growth during the forecast period. Vendors are focusing on the introduction of innovative product offerings in terms of design, color, shape, and weight, to cater to the varying needs of consumers. The transition from beginners to seasoned recreational divers necessitates the use of diving equipment that is required for diving deeper, staying underwater for longer durations, and also requires carrying more equipment.

    According to the report, a key growth driver is the rising interest in shark diving. Shark diving is garnering huge popularity among both local divers as well as tourists in South Korea in recent times, which is one of the major factors driving the growth of the scuba diving equipment market in the country. Shark diving in South Korea is now being promoted as an eco-tourism initiative by the government, and is expected to increase the interest for scuba diving among diving enthusiasts, particularly among tourists.

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  • Safilo Group signs exclusive distribution agreement with Seeone in South Korea

    Safilo Group signs exclusive distribution agreement with Seeone in South Korea

    Italian eyewear specialist Safilo Group has signed an exclusive distribution agreement in South Korea with Seeone, a respected local commercial eyewear operator.

    The new partnership is effective from 1 February. However, Safilo’s Korean duty free business will continue to be managed through the group’s global travel retail organisation and its local agents.

    Safilo said the distribution deal is in line with the company’s plans to change its local affiliate business model in Korea where it aims to further develop its brand portfolio.

    Seeone stated it would ensure a “seamless transition and smooth continuation of customer service to all optical retailers for all Safilo brands, including supply of products and after sales service”.

    Safilo Group CEO Luisa Delgado said: “We welcome Seeone to Safilo’s worldwide partner network, where our over 50 exclusive partners across the world contribute their unique commercial capabilities and local market leadership to Safilo’s growth strategy, serving the local retailers on our behalf.

    “Seeone brings an excellent track record of service and understanding of the Korean customers trade dynamics. We share a mutual belief in growing optical brands through quality distribution and operations, and relevant product design.

    “South Korea has for Safilo a strategic global importance, as a domestic market, design trend setter for Asia and worldwide, and as an important Asian tourist destination. We are therefore committed to building an effective business in Korea for the longer term,” Delgado concluded.

    Seeone CEO Sungjoo Ko commented: “This partnership is important for us. Safilo’s brand portfolio covers all market segments, with high quality eyewear. Their products are innovative and they have a history of leading craftsmanship and product design. With them, we see important growth opportunities that will strengthen our business in Korea.

    “Safilo is the world’s second global eyewear leader. We will represent them with rigour and quality in Korea’s independent optical channel.”

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  • South Korea duty free sales grow +33% to $10.5bn

    South Korea duty free sales grow +33% to $10.5bn

    According to the Korean Customs Service (KCS) which recently shared some Korean duty free sales figures with the local media, the total DF market in South Korea grew by +33.5% in 2016, registering sales of KRW12,275.7bn (US$10.56bn)

    The No. 1 duty free retailer in South Korea, Lotte Duty free, registered sales of KRW5,972.8bn (US$5.13bn)in 2016, whilst second-placed Shilla Duty Free saw sales rise to KRW3,405.3bn (US$2.93bn).

    Shinsegae Duty Free posted sales of KRW960.8bn (US$826m).

    By product category, sales of cosmetics – the highest-grossing product category – rose to KRW6,273.3bn (US$5.4bn); sales of handbags reached KRW1,735.6bn ($1.5bn); watches KRW935.9bn (US$804.5m) and tobacco KRW593.5bn ($510.2m).

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  • US Beef Market Share Grows in South Korea

    US Beef Market Share Grows in South Korea

    Despite a regain in consumer interest for imported pork, ostensibly because of bird flu, South Korea’s pork imports slightly decreased over the past year, both overall and from the U.S.

    Contrastingly, beef imports volumes have surged, with the U.S. product the main beneficiary.

    Korea Customs Service figures provided by Meat Export Federation South Korea director Ji-Hae Yang show South Korea’s January-November overall pork imports very slightly dipped from 422,766 to 421,123 metric tons. During the same period, imports from the U.S. went down 4% from 129,224 to 124,093 tons. December 2016 import figures are not available yet.

    South Korea is highly self-sufficient in pork, and domestic production continues to rise, Yang says, explaining the stagnancy of imported product volumes.

    However, it appears consumers have gained interest in imported pork, even if that has not been reflected yet in import volume figures. Sales of imported pork rose 8.7% year-on-year from January to November 2016 at South Korea’s largest retail discount chain E-mart, The Korea Herald reported. The newspaper explained the rise as being a result of declining consumer interest in chicken because of bird flu.

    Things were bright on the beef side, though, with an overall import rise of 25% from 276,852 to 346,878 tons. U.S. beef fared even better, rising 47% from 98,712 to 145,376 tons. U.S. beef market share also rose 6.2% from 35.7% to 41.9%.

    Meanwhile, although beef imports from the U.S.’ main competitor, Australia, rose 10% from 158,080 to 173,104 mt, Aussie beef suffered an almost 8% market share loss, from 57.1% to 49.9%.

    U.S. beef has benefited both from record-high prices and a production decline of South Korea beef, as well as drought in Australia, which has reduced numbers of grazing and feedlot cattle there. “We had drought in the U.S. three to four years ago and we have recovered completely, so that is why we are at an advantage this year,” Yang said.

    Another reason for the import increase of U.S. beef is recovery of consumer confidence in the product’s safety, Yang said. MEF South Korea measures South Korea consumer confidence in U.S. beef with Gallup South Korea every six months. The latest survey, done in December, showed a 52% confidence point, she said.

    In comparison, the March 2012 survey showed confidence at only 15.4%, but still up from a very low 5.3% two years earlier, Yang said.

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