Korea is known for its super-fast internet, rapid and near-complete adoption of new technology and high smartphone usage. Despite its modest population compared to neighbors (53 million inhabitants), Korea is one of the most attractive and potentially lucrative markets in Asia.
Why? Part of the reason is ease of entry. For example, we have found that Korea is a much easier prospect for expansion than China, with its complex web of personal networks and government regulations, or Japan, which is highly conservative and tends to take a unique path when it comes to technology. Korea’s advanced, the socio-economic position makes it much more familiar to many Western companies and wide-ranging FTAs (52 trade agreements covering 74% of global GDP) open opportunities that may not be found in much of Southeast Asia.
But don’t be fooled! While Korea is an attractive prospect, many foreign brands have had a hard time here. The list includes Yahoo, WalMart,
I’ve been helping companies enter the Korean market for more than a decade. Here are five critical (but often ignored) factors that could help you power into the world’s most wired nation in 2019.
Korea’s shopping districts may have switched from neon to energy-efficient LEDs, but they’re no less vibrant and impressive.
1. Know your market
Like any foreign market, Korea is unique in many ways. One of the first mistakes companies often make when planning their marketing strategy in Asia is seeing the region a single country, rather than a group of extremely diverse and unique nations. Even within Northeast Asia, the expectations and consumer behavior of Koreans are very different from their neighbors in China or Japan.
For example, Korean consumers are used to getting things for free. There are free samples everywhere, and ticket prices for most events are low. Coupang, Korea’s top e-commerce player started as a daily deals site, like Groupon. But while Korean consumers are drawn to deals, this doesn’t mean Koreans don’t spend money. Koreans are quick to adopt new trends, including high priced products. FOMO (Fear of Missing Out) is a strong drive among Korean consumers. They also don’t want to be left behind, which means they are also quick to move on to new trends. As such, timing is crucial when entering the Korean market.
Korean cosmetics are known for high-quality ingredients, staying with the latest trends, and being a good value for the money.
2. Know thine enemy
Competition can be tough. Especially when you are up against a home team that deeply understands the market and already has a loyal consumer base. Take K-beauty for example. Korean people (and media) celebrate the international popularity of Korean skincare and makeup. When American or European cosmetic companies, like Benefit or Sephora, try to enter the Korean market they are often met with obstacles. It is extremely difficult for foreign brands to survive when Koreans have so many cheaper, good quality local options that cater to local tastes.
This is why extensive market research is necessary in order to compete with local brands. If you don’t know your competition, you’re setting yourself up for failure even before the game begins. (I bet you didn’t know, for example, that Koreans pay incredibly close attention to the ingredients in their cosmetics in order to avoid harmful substances.)
3. Localization — do it right, or not at all
The importance of content localization is often ignored. And to be clear, translation is not the same as localization. Sure, localization starts with
Far beyond accurate translations, foreign brands that succeed in Korea develop content that is relevant to Korean audiences. This means sensitivity to underlying cultural/political/historical context. From copywriting to design, to seemingly insignificant details such as font choice, your content needs to resonate with your target audience.
DO NOT use this font, please!
For example, using a certain font can drastically increase/decrease marketing impact and brand reputation. Also, understanding popular concepts like Agee-
Startup events are great venues to start building local relationships in Korea
4. Relationship — not everything, but almost everything
In Korea, establishing and maintaining strong business relationships is more than just ‘important’. Strong local relationships are essential for success. The foreign startups that have been most successful here spend a lot of time on the ground in the
Uber did not foster solid relationships in the right places, prior to launch. It disregarded the highly political nature of Korean taxi unions, local transport laws, and the Korean courts. The ballsy Silicon Valley upstart ultimately paid the price — getting itself banned from the country and their ex-CEO earmarked for arrest should he ever turn up. Good relationships on the ground are the only way to access a level of understanding deep enough to succeed in the market. So, book your ticket, mingle a bit and make some friends. (By the way, when Uber did try to build relationships in Korea they weren’t exactly the long-lasting type.)
5. Find the right partner
If you want to succeed in Korea (or any other foreign market) you’ll need to dedicate considerable time on the ground yourself, but that may not be feasible in the long term. Foreign brands that have excelled in Korea spent much of that time finding a strong local partner — preferably native Korean.
How do you know if you’ve found the right partner? A portfolio of past [foreign] clients, along with proven success cases is a must. If you’re seeking a marketing partner, spend some time to research their online presence. If a marketing company isn’t good at doing marketing for themselves, it’s unlikely they’d be able to do a good job for your company. Also, you need to be ready to actively engage in the process rather than expecting them to do everything.
Working with local ‘foreigner friendly experts’ (like G3 Partners) can help you navigate the local dynamics, business norms, and ensure you avoid costly mistakes.
Got more questions about marketing in Korea? Feel free to contact us at firstname.lastname@example.org. We’re happy to provide some local insights, also actual support.