Market Opportunity
Since the 1960s, South Korea has achieved an incredible record of growth and global integration to become a high-tech industrialized economy. Four decades ago, GDP per capita was comparable with levels in the poorer countries of Africa and Asia. In 2004, South Korea joined the trillion-dollar club of world economies and currently ranks among the world's twenty largest economies. Initially, a system of close government and business ties, including directed credit and import restrictions, made this success possible. The government promoted the import of raw materials and technology at the expense of consumer goods, and encouraged savings and investment over consumption.
Korean
With the global economic downturn in late 2008, South Korean GDP growth slowed to 2.2% in 2008 and declined 0.2% in 2009. In the third quarter of 2009, the economy began to recover, in large part due to export growth, low interest rates, and an expansionary fiscal policy. The South Korean economy's long term challenges include a rapidly aging population, inflexible labor market, and over-dependence on manufacturing exports to drive economic growth.
South Korea's GDP in 2009 was estimated to be .356 trillion composed by the service sector (57.6%), industry (39.4%), and agriculture (3%).
Best Industry Segments
South Korea's leading industries include electronics, telecommunications, automobile production, chemicals, shipbuilding and steel. In 2009, exports were estimated to be 3.6 billion with commodities including semiconductors, wireless telecommunications equipment, motor vehicles, computers, steel, ships, and petrochemicals. South Korean export partners includes China (21.5%), US (10.9%), Japan (6.6%) and Hong Kong (4.6%).
Imports were estimated to be 7.5 billion in 2009. Commodities include machinery, electronics and electronic equipment, oil, steel, transport equipments, organic chemicals, and plastics. Import partners include China (17.7%), Japan (14%), US (8.9%), Saudi Arabia (7.8%), UAE (4.4%), and Australia (4.1%).
Regulatory and Tariff Landscape
South Korea applies a Customs tariff that is among the lowest in the world. It is 8% on average. South Korea's main international economic cooperation is the Korea-US Free Trade Agreement (FTA) signed in 2007. Under the FTA, nearly 95% of bilateral trade in consumer and industrial products would become duty free within three years of the date the FTA enters into force, and most remaining tariffs would be eliminated within 10 years.
Online Marketing Opportunity
South Korea ranks high in Internet access, broadband penetration and mobile phone ownership. As of June 2010, approximately 49 million users access the Internet with a penetration rate of 81.1%. More than 95% of those aged 6-29 periodically go online, compared with 86.4% of those in their 30s, 58.3% of people in their 40s and just 27.6% of people in their 50s. Around 70% of urban inhabitants use the Internet, while only 46.2% of people who live in rural areas use the Internet.
Online Language Preference
Korean is the main language on the peninsula. Although there is a population that speaks English, Chinese and Japanese, it is recommended that marketing campaigns be translated into the primary language for use.
Search Engine Profile
The top search engine in South Korea is Naver, Daum, followed by Yahoo, Google and Empas. Naver currently holds 77% share of all searches in South Korea, Daum at 10.8%, Yahoo at 4.4% and Google at 1.7%. Google and Yahoo simply do not have enough Korean language data to satisfy South Korean customers. Both companies are making efforts to catch up in this market.
Global Online Marketing Profile 2011 Forecast - South Korea
Shannon Wu is a Global Market Research Analyst at Global Marketing Associates (GMA). GMA is an international business and marketing consulting firm that helps businesses to expand globally from preparation to implementation through global online management. For more information, contact Shannon or Brian Thomas, founder and principal of Global Marketing Associates, at information@globalemarketer.com, or visit our websites at http://www.globalmarketing1.com and http://www.globalemarketer.com
