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SOUTH KOREA


SOUTH KOREA Land Area South Korea occupies the southern portion of the Korean Peninsula, which extends some 680 miles (1,100 km) from the Asian mainland. This mountainous peninsula is flanked by the Yellow Sea to the west, and the Sea of Japan (East Sea) to the east. Its southern tip lies on the Korea Strait and the East China Sea. The country's total area is 38,462.49 square miles or 99,617.38 square kilometres.

South Korea can be divided into four general regions: an eastern region of high mountain ranges and narrow coastal plains; a western region of broad coastal plains, river basins, and rolling hills; a southwestern region of mountains and valleys; and a southeastern region dominated by the broad basin of the Nakdong River. South Korea's land is mountainous, and most of it is not arable. Lowlands, located primarily in the west and southeast, constitute only 30% of the total land area.

Population

The total land area of South Korea

Climate The current population of the Republic of Korea is about 50.004 million people, which is an approximate 0.45% increase from the population taken in the last census. Based on the total land area and the total population, the population density of the country is about 1,271 people per square mile.

The climate of Korea is characterized by four distinct seasons: spring, summer, autumn and winter.  Winter occurs every January with the temperature ranging from -5 degrees to 5 degrees.  Spring begins during the middle of April in the central part of the country.  Summer can be divided into two periods; Jangma, a rainy period which occurs during the early summer months and Hanyorum, a hot and humid period which occurs during late summer.  Autumn is the season with crisp weather, much sunlight and changing autumn leaves.


SOUTH KOREA People & Lifestyle

Family Values  The family is the most important part of Korean life.

 In Confucian tradition, the father is the head of the family and it is his responsibility to provide food, clothing and shelter, and to approve the marriages of family members.  The eldest son has special duties: first to his parents, then to his brothers from older to younger, then to his sons, then to his wife, and lastly to his daughters.  Family welfare is much more important than the needs of the individual.  Members of the family are tied to each other because the actions of one family member reflect on the rest of the family.  In many cases the family register can trace a family's history, through male ancestors, for over 500 years.


SOUTH KOREA People & Lifestyle Meeting Etiquette  Greetings follow strict rules of protocol. Many South Koreans shake hands with expatriates after the bow, thereby blending both cultural styles. The person of lower status bows to the person of higher status, yet it is the most senior person who initiates the handshake. The person who initiates the bow says, "man-nasuh pan-gop-sumnida", which means "pleased to meet you." Information about the other person will be given to the person they are being introduced to in advance of the actual meeting. Wait to be introduced at a social gathering. When you leave a social gathering, say good-bye and bow to each person individually.

Business Relationship & Communication  South Koreans prefer to do business with people with whom they have a personal connection.  It is therefore crucial to be introduced by a third-party.  Relationships are developed through informal social gatherings that often involve a considerable amount of drinking and eating.

 Appointments are required and should be made 3 to 4 weeks in advance.  You should arrive on time for meetings as this demonstrates respect for the person you are meeting. Individuals who have established mutual trust and respect will work hard to make each other successful.  South Koreans treat legal documents as memorandums of understanding.  They view contracts as loosely structured consensus statements that broadly define agreement and leave room for flexibility and adjustment as needed. Sensitive matters may often be raised indirectly through the intermediary that first made the introductions.  South Koreans are extremely direct communicators. They are not averse to asking questions if they do not understand what has been said or need additional clarification.  This is a culture where "less is more" when communicating. Respond to questions directly and concisely.  Since there is a tendency to say "yes" to questions so that you do not lose face, the way you phrase a question is crucial. It is better to ask, "When can we expect shipment?" than "Can we expect shipment in 3 weeks?", since this question requires a direct response.


SOUTH KOREA

Having the highest percentage of Internet penetration with a rate of 82.7% suggests that the most efficient and effective channel to communicate with the audience is through the different online tools and social media accounts where most of the Koreans spend an average of 14 hours weekly.

Internet Speed Ranking

SOURCE: Statista, The Statistical Portal


SOUTH KOREA Government

The government of South Korea is divided into three branches: executive, judicial, and legislative. The executive and legislative branches operate primarily at the national level, although various ministries in the executive branch also carry out local functions. Local governments are semi-autonomous, and contain executive and legislative bodies of their own. The judicial branch operates at both the national and local levels. As with most stable three-branch systems, a careful system of checks and balances is in place. For instance, the judges of the Constitutional Court are partially appointed by the executive, and partially by the legislature. Likewise, when a resolution of impeachment is passed by the legislature, it is sent to the judiciary for a final decision.  Legislative Branch

At the national level, the legislative branch consists of the National Assembly of South Korea. This is a unicameral legislature; it consists of a single large assembly. Most of its 299 members are elected from singlemember constituencies; however, 56 are elected through proportional representation. The members of the National Assembly serve for four years. The Assembly forms 17 standing committees to deliberate matters of detailed policy. For the most part, these coincide with the ministries of the executive branch. Bills pass through these committees before they reach the floor. However, before they reach committee, they must already have gained the support of at least 20 members, unless the president has introduced them. To secure final passage, a bill must be approved by a majority of those present; a tie vote is not sufficient. After passage, bills are sent to the president for approval; they must be approved within 15 days.  Executive Branch The executive branch is headed by the president. The president is elected directly by the people, and is the only elected member of the national executive. The president serves for one five-year term. The president is head of government, head of state, and commander in chief of the South Korean armed forces.  Judicial Branch The judicial branch includes the Constitutional Court, the Supreme Court, regional appellate courts, and local district, branch, municipal, and specialized courts.


SOUTH KOREA Economic Data

$1.67 GDP

Credit Rating South Korea’s credit rating outlook was raised by Moody’s Investors Service to positive from stable, boosting demand for the nation’s assets.

TRILLION

“Very strong and improving fiscal fundamentals,” were a key reason for the change, along with resilience in the country’s external financing position, Moody’s said in a statement today. The rating remains at A1, the company’s fifth- highest grade.

1.1%

3.2%

16%

Inflation Rate

Unemployment Rate

Population Below Poverty Line


SOUTH KOREA Import

Imports in South Korea decreased to 42064 USD Million in February of 2014 from 44822.33 USD Million in January of 2014. Imports in South Korea is reported by the Ministry of Trade, Industry & Energy (MOTIE). Imports in South Korea averaged 10568.33 USD Million from 1966 until 2014, reaching an all time high of 45614.49 USD Million in October of 2013 and a record low of 38.61 USD Million in January of 1966. South Korea imports mainly oil (23 percent of total imports), semiconductors (6 percent) and natural gas (5 percent). Other imports include coal, steel and iron ore. Main import partners are China (16 percent of total imports), Japan (12 percent), United States (8 percent) and Saudi Arabia (7 percent). Others include: the European Union (9 percent), ASEAN (10 percent) and Australia (5 percent).

Export

Exports in South Korea decreased to 42,989 USD Million in February of 2014 fror South Korea has an export oriented economy. Major exports are high-tech manufactured products like semiconductors (9 percent), machinery (9 percent), automobiles (9 percent), ships (7 percent), LCD devices (5 percent) and wireless communication devices (4 percent). Other exports include: steel (7 percent) and petrochemicals (10 percent). Major export partners are China (25 percent of total exports), ASEAN (14 percent), the United States (10 percent) and the European Union (9 percent). Others include: Japan, India, Brazil and Paraguay. This page provides South Korea Exports - actual values, historical data, forecast, chart, statistics, economic calendar and news.


SOUTH KOREA Barriers to Market Entry Major economic players have lists of grievances that run into scores of pages. Here is a look at just a few of the reported trade barriers in South Korea:  BASIC PROBLEMS - Foreign goods and services that run into direct competition with South Korean offerings are often subject to market access barriers. Both South Korean and foreign goods and services often face regulatory issues coming from excessive government oversight, which leads to increased costs.  AGRICULTURE - South Korea uses high tariffs to protect its politically important farm sector while farm activists have used mass protests to target wholesalers and retailers to block sales of imported foods. The pact with the United States is aimed at cutting out beef tariffs that can range up to 40 percent.  AUTOMOBILES - The deal with the United States is supposed to end a tax on engine displacement that U.S. automakers have said hurts sales of their products. The EU and United States have complained of numerous non-tariff barriers to trade in the sector. The EU has complained that South Korea keeps foreign auto technologies out of the country through regulatory barriers and may not enforce market-opening conditions in a consistent manner.  BEVERAGES - The EU says South Korea has five government agencies overseeing labelling, with foreign liquor companies are asked to provide 18 pieces of information for labels. The layers of bureaucracy add significant costs.  CONSTRUCTION - An import tax of 8 percent on building materials hurts foreign firms who use the materials more.  MOBILE PHONES - Up until April, South Korea required all mobile phones sold to contain Korean-market specific technology, which led many firms to avoid the country due to re-engineering difficulties. Those who try to enter face stiff competition due to to market saturation by LG and Samsung handsets.  INTELLECTUAL PROPERTY - While South Korea has made progress in addressing intellectual property infringement, the EU has complained of lax enforcement of existing laws.  COPYRIGHT AND TRADEMARKS - South Korean data indicate that Hollywood loses at least $1 billion a year due to pirated movies and TV shows distributed over the Internet. Luxury goods makers have charged South Korea-based operations with making illegal knock-offs of their products, which has undermined their brands.  OTHER INDUSTRIES - The list of sectors complaining of trade barriers includes: banking, chemicals, cosmetics, financial services, insurance, legal services, media, medical devices, pharmaceuticals and real estate


SOUTH KOREA Philippines & South Korea Bilateral relations between South Korea and the Philippines was established on March 3, 1949 upon the recognition of Republic of Korea as a sovereign state by the Philippines. The Philippines was the fifth state to recognize the Republic of Korea and the first ASEAN country to established relations with South Korea. The relations were cemented when the Philippines aided South Korea in the Korean War by sending the Philippine Expeditionary Force to Korea. South Korea is the sixth biggest trading partner of the Philippines, while the Philippines is the third most attractive Southeast Asian country for South Korean investors in 2011. South Korea also provides the biggest tourist market for the Philippines. Most tourists who went to the Philippines on 2011 were South Koreans, followed by Japanese and Americans.


SOUTH KOREA Proposed Import to SK Import

Export

$42,064M

$42,989M

*Import and Export of SK for the month of February 2014

Sugar With a lack in natural resources, South Korea has a high dependence on import of capital goods, raw materials and industrial supplies. In 2005, the Philippines is the 9th largest sugar producer in the world and 2nd largest sugar producer among the ASEAN countries second to Thailand according to Food and Agriculture Organization of the United Nations Statistics Division. At least 17 provinces located in 8 regions of the Philippine archipelago have grown sugarcane crops, of which Negros island accounts for half of the country’s total production. As of Crop Year 2009-2010, 29 mills are operational divided as follows: 6 mills in Luzon, 13 mills in Negros, 4 mills in Panay, 3 mills in Eastern Visayas and 3 mills in Mindanao. Most of these mills are located in the island of Negros. Sugarcane is not a sensitive crop and can be grown on almost all type of soils, from sandy loams to clay loams and from acidic volcanic soils to calcareous sedimentary deposits. The harvest period begins from October to December and ends in May.


SOUTH KOREA Philippine Sugar Supply-Demand & Trade for the Past 10 Crop Years

Philippines Sugar Industry     

Self-sufficient in sugar for the past 3 years 100% allocated volume for US Quota Exported to the world in the past 3 years, at more than the target Capacity of 35% of mandated ethanol volume Two mills and two distilleries exporting electricity. Four more are on various stages of development


SOUTH KOREA Sugar Production in the Philippines


SOUTH KOREA Competition 1. Brazil: Annual production: 37,800 metric tonnes 2. India: Annual production: 29,750 metric tonnes 3. China: Annual production: 13,065 metric tonnes 4. Thailand: Annual production: 10,850 metric tonnes 5. USA: Annual production: 7,779 metric tonnes


SOUTH KOREA Marketing  Television Television is the second most popular method of advertisement in South Korea. Advertisements take place during commercials between each television programs. An interesting fact about television advertisements in South Korea is that “junk food” advertisements have been prohibited to air at the primetime schedule, which is between 5pm to 7pm.

 Newspaper The newspaper is approximated as to be the second most important medium for advertisements. Just like the television, advertisements are also frequents in Korean newspapers. However, this form of advertisement is now threatened since Internet has become more popular in streaming or publishing advertisement.  Internet South Korea has a high world Internet penetration rate of 82.7% recorded in 2011. Most of its users spend an average of 14.7 hours a weekly and almost half of this group spends more than 14 hours or more. That being said, Internet has been proven to be the most effective way to reach potential customers within the country.

Product Placement Product placement or the practice of strategically placing the company’s products or their logo within a film, video games and television programs is said to be one of the rising advertising tool in South Korea. Due to its success, the price for product placement has been raised by different agencies in the country.


SOUTH KOREA Advertising Agencies

Daehong Communications is a marketing communication partner that knows the contact points of lifestyles and culture, from distribution such as department stores and marts to various services such as food, beverage and hotels. Daehong Communications has firmly established theirposition as the best marketing partner through various success advertising campaigns. Daehong Communication is a very diverse company that offers their clients a wide variety of services such as marketing strategic solution, creative solution, media solution, BTL solution, digital solution, and design marketing solution.

SK Planet, established in October 2011 as a wholly owned subsidiary of SK Telecom, leads the revolution of online and mobile service platform with its Digital Contents, Integrated Commerce and Advertising & Marketing Businesses. Through its merger with SK Marketing & Company on February 2013, the new SK Planet became a truly integrated service platform that encompasses both the online and offline marketing channels.

Direct selling in South Korea is expected to increase in constant value at a CAGR of 1% over the forecast period. Beauty and personal care direct selling, consumer health direct selling and media products direct selling are all expected to record healthy growth rates during the forecast period as there is a marked preference among South Korean consumer to purchase these products through direct selling. The loyalty of South Korean consumers to their favorite direct selling companies is stronger in these categories. On the other hand, home care direct selling and other direct selling are two categories which are expected to decline in South Korea over the forecast period as store-based retailing channels such as hypermarkets, variety stores are expanding rapidly, while the development of internet retailing in South Korea, especially through mobile devices such as smartphones remains very dynamic. Many South Korean consumers are likely to prefer store-based retailing channels or Internet retailing due to the diversity of products available through these channels.


SOUTH KOREA Distribution Channels Producer-Customer This is the simplest and shortest channel in which no middleman is involved and producers directly sell their products to the consumers. It is fast and economical channel of distribution. Big firms adopt this channel to cut distribution costs and to sell industrial products of high value. Small producers and producers of perishable commodities also sell directly to local consumers.

Producer-Retailer-Customer This channel of distribution involves only one middleman called 'retailer'. Under it, the producer sells his product to big retailers who in turn sell to the ultimate consumers. This channel relieves the manufacturer from burden of selling the goods themselves and at the same time gives them control over the process of distribution. This is often suited for distribution of consumer durables and products of high value.

Distribution Mediums


SOUTH KOREA References  "Philippines-South Korea Relations". Philembassy-seoul.com. Retrieved 2013-06-10. http://www.korea.net/NewsFocus/Policies/view?articleId=113844  "PH welcomes 1 millionth Korean visitor this year". ABS-CBN News. 2012-12-27. Retrieved 201306-10. http://www.korea4expats.com/article-business-practices-etiquette.html http://www.euromonitor.com/sugar-in-south-korea.html http://www.sra.gov.ph/annual-report-accomplishments/  https://www.cia.gov/library/publications/the-world-factbook/geos/ks.html  http://www.indexmundi.com/south_korea/demographics_profile.html  http://en.wikipedia.org/wiki/List_of_free_ports  http://in.reuters.com/article/2009/11/06/korea-trade-idINSEO27897920091106  http://www.bloomberg.com/news/2012-04-02/korea-s-credit-rating-outlook-raised-to-positive-by-m oody-s-1-.html  http://en.wikipedia.org/wiki/Government_of_South_Korea http://en.wikipedia.org/wiki/Sugar_industry_of_the_Philippines  http://www.kwintessential.co.uk/resources/global-etiquette/south-korea-country-profile.html  http://www.southkoreagovernment.com/government.htm  http://www.euromonitor.com/direct-selling-in-south-korea/report  http://business.gov.in/manage_business/channels_distribution.php  http://www.tradingeconomics.com/south-korea/inflation-cpi

 http://www.slideshare.net/etorr021/mmc3602-south-korea-presentation


SOUTH KOREA Submitted by:

AFABLE, ALLAN VICEDO, NOAH VILLANUEVA, INNA

South Korea (Afable, Vicedo, Villanueva)  

Export Market Research

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