Korea’s Changing Market Demands New Approach
Korea’s Changing Market Demands New Approach Says Expert
Fast food, smart drinks and youth culture are out - New Zealand companies looking to sell to Korea should be targetting the older, wiser consumer with time for travel, education and the finer things in life Dr Clint Laurent told an Asia 2000 Foundation seminar in Auckland today.
Dr Laurent, who specialises in the demographics of Asian markets, was one of five Korea experts presenting at the first of Asia 2000’s national seminars on Doing Business In Korea being held in Auckland, Wellington and Christchurch this week, sponsored by HSBC in association with AIA, AIG and supported by NBR.
Significant changes to Korean households, labour force, population, income and spending would create a new market environment in the next 10-20 years, Dr Laurent told the seminar. Strategies based on a high growth young consumer culture were “doomed to failure”.
“South Korea is now a stable, mature middle class society – slower growing than before but more affluent. The heady days of a high growth young consumer culture are gone. Consumption trends will still be lead by younger more affluent and well educated consumers – but the core consumption group is now 40 years plus.”
“Therefore successful future strategies should look for high growth/high margin niches rather than mass market appeal.”
Korea’s 60+ population would double by 2020 with the over 70 age group also set to rise rapidly – which meant more demand for hospital and managed health care but also more people with more time for leisure and recreation, Dr Laurent said.
Dr Laurent identified the emergence of a new consumer group in Korea. The Empty Nesters – the two person household with grown up children, who are at the peak of their earnings but have few financial commitments and thus more discretionary spending.
The growth of Korea’s skilled white-collar group would also provide opportunities for marketers. “They tend to live a lifestyle and so have a higher propensity to consume. They earn more than most people and they are better educated - they are the opinion leaders. They also represent a significant business-to-business market with demand for office furniture, IT facilities and training, office space and so on.”
About 100 Auckland business people attended the half-day seminar at the Carlton Hotel. Topics included managing business relationships in Korea, negotiating Korea’s legal frameworks, Korea’s economic development and structuring market entry. The seminar moves to Wellington tomorrow (Tuesday) and will be held in Christchurch on Thursday.