The Screaming Pen

Providing Global Insight, Context, and Perspective

Buying Korean

The Trouble with Entering the South Korean Market

There is perhaps no country with such loyal devotion to its homegrown companies as South Korea. Domestic all-stars Samsung, Hyundai, LG, and others have easily maintained dominance due to the fealty of Korean citizens and, also importantly, favorable relations with government, while foreign darlings from Apple to Hollywood’s movie industry have run up against tremendous difficulty penetrating the market.

While even conservative estimates of the worldwide market share controlled by Apple’s iPod put the figure around 25%, in Korea this plummets to 1.8%; Korean firms iRiver, Samsung, and Cowon are the clear mp3 industry leaders here. In cinema, government regulation mandates that movie theaters run only Korean movies for 146 days a year. From July this number will drop to 73 days per year, yet the reduction will be brooked due to robust demand for domestically produced movies.

 
Not Seoul Tasty

Allegiance to things Korean is found in sports too – from soccer to ice skating – and in health care, with many Koreans living abroad in the United States and Europe preferring to return home for complicated surgeries. Moreover, many Koreans question whether last year’s cloning scandal involving Hwang Woo-suk of Seoul National University, despite his own admission of falsification, was truly worthy of international opprobrium or merely an attempt by foreigners to undermine the nation’s scientific achievement. Foreign brands looking to enter the Korean market should be fully aware of this national mindset, which additionally doesn’t appear to be changing with the generations: young Koreans routinely preoccupy themselves with a firm’s nationality and prefer to “buy Korean.”

Difficult, but not Impossible

American brands looking to make inroads in Korea can take solace, however, in the success made by at least one foreign firm. With over 50 locations in the country as of May 2006, Outback Steakhouse – an American-based (Tampa, Florida), yet Australian-themed concept restaurant – is viewed as fine dining by many Koreans. Outback’s prosperity clearly may relate to its identification with “the lucky country,” a place better liked in Korea than is the United States. Next: Kangaroo-inspired iPods?

– DML

 2006. All rights reserved.

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May 7, 2006 - Posted by | Asia, Author: DML, Business, Country Profiles, Korea, World Markets

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