Trade patterns are changing in South Korea. Until recently capital goods and raw materials have totally dominated the market, but if a recent exhibit for imported goods at the Seoul Convention and Exhibition Center is anything to go by, foreign food and beverage companies from all over the world are now targeting the market, reports Simon Pitman.
The Imported Goods Fair closes its doors today after four days. As with all exhibitions the organisers have called it a complete success. But going beyond the hype what is clear is that the re-emergence of foreign food and drink manufacturers is a definite. Following the years of uncertainty and economic hardship, interest in foreign food and beverage items is once again on the rise.
Currently national trade in capital goods in South Korea accounts for approximately 11 per cent of imports, with food and beverage taking a small but growing slice of that market. Currently the country has approximately a 75 per cent reliance on imported foods, given its large population and relatively low levels of arable land. This means that, given the improving economic conditions, the food and beverage market there is of growing importance to foreign manufacturers.
After the financial crisis of 1998, the South Korean market, like the other tiger economies of the region, shrank tremendously, leaving many food and beverage companies exporting to the country in the cold. At that time exports of US ready food and beverage items fell by half to a value of $600 million. Recovery has been slow but steady and it is only now that the country's once avid consumers are beginning to test the water again.
One of the worst affected segments for exporters was that of luxury goods. Foreign food and beverage companies supplying wines, cheeses, prepared meats and other high-end products were all seriously impacted. But at this week's exhibition, the organizers say that there is clear evidence that companies offering these kind of goods are becoming increasingly evident. Indeed one of the seminars at the event was devoted to the 'Necessity for well-being, culture and wine'.
The exhibition has included nearly 200 companies from 12 countries exhibiting over 1,000 items ranging from ceramics, electronic parts and machinery. Food and beverage items are said to have taken up a significant slice of the exhibitions.
"The domestic market continues to attract imports from all over the world. More so for consumer goods now." said Soon H. Kwon, chairman of the Korean Importers Association.
The companies are from traditional trading partner nations such as Japan, China and the US, but have also included, until now, virtural unknowns such as Myanmar and Sudan. However industry observers believe that in the future it will be Taiwan that will hold the greatest potential as a future trade partner in a range of goods including food and beverage items, given its continued drive into the export market.
"Although raw materials and capital goods lead the way with two-thirds of the total market share, taking into account a fully open market and a rapidly improving standard of living, there is high growth potential for consumer goods imports," said Soon.