What do cosmetics, construction equipment, LEDs and automobile batteries all have in common?
They're all some of the great made-in-Korea products that have been growing in popularity in overseas markets this year.
The Korea Trade-Investment Promotion Agency (KOTRA) announced on Oct. 11 a list of 100 Korean products that are seeing rising demand overseas. Based on interviews with buyers at KOTRA’s 78 branches in 55 countries, the organization was able to determine the five main reasons behind the rising demand for those items, such as having multiple functions, or the fact that there are a lot of infrastructure construction project going on in developing countries. The trade promotion agency also realized that there is strong interest in health, fighting pollution and curing diseases worldwide.
Cosmetics are the single Korean export that have seen the most growth in demand over the past two years. This can be seen anecdotally with the popularity of "Korea-style beauty" or so-called “K-beauty.” According to KOTRA, buyers from 22 countries, including the U.S., Germany, China and Mexico, selected cosmetics as the leading Korean export item that has seen the most growth in demand.
Thanks to having multiple functions, high tech, healthy ingredients and great packaging, Korean cosmetics have been penetrating markets and expanding market share across major cosmetic distribution channels in the U.S. and Europe, and through channels that deal exclusively with Korean cosmetics. Recently, Korean cosmetic exports have been gaining ground in the Middle East and in Central and South America.
According to the Korea Customs Service (KCS), cosmetic exports in 2015 were worth around US 2.45 billion, showing a 36.9 percent increase over the past five years. In the first quarter of 2016 alone, Korea exported US 0.71 billion worth of cosmetics, showing a 21.9 percent increase year-on-year. The number of export destinations also rose, to 131 countries in 2015, from only 118 in 2011.
Other Korean goods that that were popular overseas this year include frozen dumplings, coffee chains and seasoned laver, or seaweed. According to customs authorities, Korea exported USD 0.418 million worth of frozen dumplings to Russia last year. So far this year, Korea exported USD 0.381 million worth of frozen dumplings to Russia between January to September, already nearing total exports for the last year. Such popularity is thanks to Russian diners who enjoy frozen dumplings. KOTRA said that this is thanks to the popularity of a local food item, pelmeni (Пельмени) that is similar to dumplings.
In Mongolia, the popularity of Korean coffee chains, such as Caffe Bene and Tom N Toms, has been growing and the franchises have been enjoying great popularity while managing more than 10 branches each in the country.
In Australia and South Africa, more customers are enjoying Korean seasoned laver, or seaweed, as a snack or side dish to go along with their alcoholic beverages.
Many overseas customers enjoy Korean fruit-based drinks these days, too. KOTRA said that Korean fruit-based beverages, such as aloe juice, are really popular in Guatemala, Mexico, Colombia, Paraguay and other countries in Central and South America, as customers are looking for fruit beverages rather than carbonated drinks.
Some products are popular thanks to a growing, worldwide interest in health. KOTRA said that it has observed more demand for Korea-made air purifiers and water purifiers, especially in Malaysia and in Kuwait, due to air pollution and sand storms. In Singapore, Korean mosquito repellent has been sold out at many shops due to the outbreak of Zika virus. The report also said that there's higher demand for Korean dental care products, such as electric toothbrushes, and bed set vacuum cleaners in mainland China.
The report noted that there is also growing demand for heavy construction equipment. In the case of Malaysia, Korean heavy construction equipment is becoming more affordable, as tariffs on Korean products have been reduced to 5 percent starting this year thanks to the Korea-ASEAN FTA, whereas a 20 percent tariff is applied to heavy construction equipment from other countries. This is also thanks the 11th Malaysia Plan and to regional development plans in Mindanao, the Philippines, said KOTRA.
Some products are enjoying growing demand thanks to changes in government policies, as they try to save energy and generate environment-friendly energy. According to KOTRA, a growing demand for LED lights has been witnessed in Japan, Europe and Vietnam due to government policies there that focus on increasing energy efficiency.
Finally, thanks to electric vehicle policies in Germany and China, there has been a growing demand for Korean automobile batteries. In Brazil, demand for small-sized solar power generators or solar powered batteries rose, thanks to a newly enforced law designed to support households that generate electricity at home by deducting it from their electricity bill.
Please visit KOTRA’s overseas market news website (news.kotra.or.kr) for more information about the list of 100 great Korean products that are growing in popularity overseas.