Korean consumers tastes
Koreans are very open to partnership with a business, and they especially choose those franchisees who already have a good name and reputation in Korea. They love those franchises that are the core of their culture and reflect their origin country. Korean franchisers aged 55 or over 55 have proven them best franchisers because they have more capital and mon8and they have more knowledge about high-quality brands. Being a family-oriented culture, they will pass down their business to their children. The franchise industry regulations report that the franchises in Korea are running smoothly, and Korea is regarded as a straightforward place for franchises.
With a contract of two years, normal investment ranges from US $4,300 to US $8,700. Such a low average franchise fee can make hiring a multi-unit or large partner more difficult for an overseas franchisor. Negotiations around royalties would also be a good deal as they are usually less for domestic Korean franchises.
Brief distribution of fields:
The Korean food market is expected to reach the US $ 53.5 billion in 2013, accounting for 25% of total retail sales 25% increase from 2012 (JLL).
The organic food market was expected to grow to the US $6 billion by 2020 (Organic Trade Association).
The online channel will forecast a CAGR of 11.38%, 2013-2018 (Research & Markets).
South Korea spent the US $ 17.9 billion on private tuition in 2012.
The beauty and personal care retail market grew 5.8 percent year on year in 2013.
The cosmetic sector was the best performing sector in 2012.
Korea is the 8th largest market in the world that has worth US $ 4.5 billion almost.
Households spend 12.5% of total expenditure on eating outside. (GAIN).
In 2012, imports of chocolate-based confectionery products from the United States were 12 percent higher than the previous year. (GAIN).
Korea has become the largest market for men’s cosmetics in the world. Expenditure of 63 635 million in 2013 was about one-fifth of the (Euromonitor).
Korean are sophisticated, educated, relatively well aware. With advanced customers comes a select, more demanding buyer. Strategies and approaches should be parallel to other developed countries. Consumers are not just looking for a global brand; and they are looking for a brand that has a specific USP and will pay a higher price for it. This USP may be in reputation, quality, ingredients, or invention, but it must stand out from the crowd in a certain way.
This does not mean that all markets are full and there is no opportunity for new sectors. As mentioned, there is an aging population, and the rich 50+ baby boomer generation is far from complete. Other notable changes that are opening up the market:
Increase in double-income families.
Increase in single-parent homes.
Raise in single-member households.
Korean consumers are accustomed to reporting any product on various channels before buying it. A 2012 Embryo Trend Monitor survey found that 79% of consumers check customer reviews before making a purchase, and 74% received a written evaluation and review. So, the more information you can provide on different channels, the better. The advertising strategy of surprise or curiosity will have to be adapted carefully or have a substantial budget behind it.
Koreans have a visual awareness of every aspect and have the experience to understand what lifestyle or status they represent in the brand. They follow closely and are impressed by the style and trends of the media and celebrities. While these fads may be short-lived, it’s a good idea to have the ability to quickly adapt and run campaigns or introduce extension products that keep up with the latest trends.
Assess where demand is and where future demand may be:
An older, more affluent demographic offers a growing market for targeted services and products.
Think of Koreans as savvy consumers. They look for organic, natural, fresh, high-quality products.
Improving health and anti-aging foods and businesses will show higher demand.
Health benefits herbs will be the trend.
Koreans prefer food with brighter, more saturated colors (the human color preference for food).
Specialty stores are spreading across Korea, covering many areas, from beauty to bakeries, with niche, high-value, standard items that go with the above.
The bottom line
A solid market but with competition and commercial estate can be expensive. It has to be balanced with the sophistication and abundance of the market. There is no denying that the trend to come out is higher than in Korea at the moment; however, a developed market with a globally proven ideology is an easy country to enter.
While potentially not as good as their Asian neighbors, reducing the time and costs of educated customers and well-skilled franchisees is key.
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