How was South Korea so westernized
The South Korean economy
Our foreign trade center in Seoul has summarized the most important information about the South Korean economy for you
According to initial analyzes by the Bank of Korea (BOK), South Korea recorded negative economic growth of -1.0% in 2020 as a whole. Compared to other OECD countries, the decline is limited. For 2021, Korea is expected to return to the growth path with + 3.0%. In particular, increasing exports and investments are contributing to the economic upturn; The restrained private consumption is having a braking effect. Apart from the developments surrounding the pandemic, other international factors, such as the trade war between the US and China, as well as Korea's relations with its neighbor Japan (the most important supplier of semiconductor-relevant materials) will play an important role.
With the “Korean New Deal”, the Korean government intends to invest USD 133 billion in public funds in the expansion of the digital infrastructure and the expansion of green energies over the next five years (which is why this is also known as the “Korean Green Deal” - based on the European Green Deal - known). The Korean government hopes that this initiative will create new jobs and increase the competitiveness of the Korean manufacturing sector. As part of this initiative, the Korean unemployment insurance scheme is also being expanded. Experts expect that these measures will help stabilize the Korean labor market and bring about an economic recovery after the COVID crisis.
Economic relations with Austria
In 2020 Austria exported goods with a total value of EUR 1.1 billion to Korea. Despite the pandemic and its global effects, the export decline of -3.3% was therefore less than expected (see 2019: -11.0%). The psychologically important export mark of EUR 1.0 billion - which was broken for the first time in 2017 - was also significantly exceeded in the pandemic year. In the ranking of the most important export partners, South Korea is currently in 22nd place. South Korea remains Austria's third largest export partner and trading partner in Asia, after China and Japan, as well as an excellent technology partner for Austrian companies. In addition, Austria recorded a significant trade surplus with South Korea again in 2020.
In addition, the Foreign Trade Center in Seoul is at your disposal for information and personal advice: Just send an email or give us a call.
Statistics: country profile
The country profile of South Korea from AUSSENWIRTSCHAFT AUSTRIA and the Statistics Department provides a brief overview of the most important statistical data on the economy, politics and society.
You can find important economic and basic data and information for a large number of other countries on the respective country pages and in the overview of country profiles worldwide.
Main sectors of the Foreign Trade Center & business opportunities for Austrian companies.
Main sectors of the Foreign Trade Center & business opportunities for Austrian companies
Automotive / e-mobility
E-mobility is still in the early stages in Korea, although the creation of the institutional framework started quite early. Korea has a well-functioning e-mobility industry with top international manufacturers who are constantly investing in the further development of their technologies. With this industrial base, Korea is also trying to quickly catch up with the leaders in e-mobility and is promoting the switch to e-vehicles like no other country in the world.
With the new e-automobile technologies, the trend is of course in the direction of new, lighter materials, more powerful and lighter batteries (solid state batteries) or more efficient drive systems. In addition, the development of many automotive technologies of the future such as self-driving cars or IoT, big data, AI or the latest sensor technologies for the automotive industry continues. The Korean government's road map for the automotive sector goes in exactly this direction.
Opportunities for Austrian companies
Electric automotive technologies are constantly being further developed in all areas. There is of course still great potential for companies from the classic automotive supplier industry, but also, as the trends already show, for innovations in lighter new materials or battery technologies.
Food and soft drinks
South Korea is one of the six largest food importers in the world. On the one hand, this is due to the very manageable size of the agricultural land. On the other hand, the market is undergoing a structural change. The latter is due to increasing prosperity and the associated “westernization” of eating habits. Combined with very long working hours, widespread innovative sales channels such as online shopping, and an increasing demand for processed foods, the South Korean market offers great sales potential for food and beverage manufacturers.
The Korean retail sector is characterized by a few huge conglomerates that are also active in the food sector. Lotte Shopping Co. is represented in all segments of the retail trade with supermarkets, hypermarkets, convenience stores, tele-shopping channels, online sales and department stores. The local processing industry is relatively strong and has the advantage of still fitting the tastes of Koreans best. Domestically produced foods are also considered to be safer compared to foreign products. However, high-quality European products enjoy an excellent reputation.
Opportunities for Austrian companies
For Austrian entrepreneurs, the marketing of high-quality branded products is particularly recommended. The trend towards “functional food” is well suited for the marketing of organic food and well-being products. In doing so, attention should be paid to original marketing and packaging, which are very important in South Korea. In general, there are good market opportunities for products such as ready meals, organic food, convenience food, spices, sauces, processed cheese (pizza cheese), innovative baked goods, non-alcoholic beverages, high-quality meat, processed meat products, as well as beer and wine. Thanks to the free trade agreement between the EU and South Korea that has existed since 2011, almost all import duties are no longer applicable.
Fashion / Mode
The Korean fashion market was roughly divided into two sectors until the early 1980s: private tailoring for upper-class women and everyday clothing from mass production. In the 1980s, independent Korean brands slowly made their mark and literally ushered in the age of the fashion industry. Since then, the Korean fashion industry has developed rapidly in a very short period of time
Korea is now one of the most important markets for domestic as well as international fashion brands. Managing directors of world-famous luxury brands regularly visit the country for customer and promotional studies. Because Korean consumers are regarded as “fashion barometers” in all fashion-relevant areas, so that some international brands even launch their products on the Korean market first in order to get an idea of the market potential, especially in Asia.
Opportunities for Austrian companies
Thanks to K-Pop, K-Drama and also K-Fashion (known under the Korean catchphrase Hallyu), Korea's creative industry has been popularized across the country's borders since the mid-1990s. Korea became a trendsetter in Asia. International fashion companies use this position and often show their new collections and products in Seoul first. Austrian brands can also first get an idea of their potential for other Asian countries on the Korean market. Success in the Korean market, under the influence of Hallyu, can lead to further success in other Asian countries.
General information on the economy, the country and its people as well as personal tips can be found in our country report South Korea.
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