What do we know about South Korean consumers?
South Korea has a population of just over 50 million, making it a densely inhabited nation. The top 10% percent of the richest citizens earn 37% of the country’s wealth, whilst the poorest 10% earn 6.8%. South Korea’s Gini index in 2013 was 30.2, with 0 representing perfect equality and 100 projecting utter inequality. The figures project economic inequality and a reducing middle class for this nation. It has been recorded in recent findings that 73% the people in Seoul, the capital of South Korea, feel they are living in a lower middle to lower class lifestyle status.
Since the Korean War in the 1950’s, South Korea has been experiencing rapid urbanisation with 82% of its population residing in urban areas. The increasing number of inhabitants that migrated towards Seoul for better economic opportunities caused an expansion of the prime area. Today, Seoul along with neighbouring Gyeonggi and Incheon are known as Capital Region (CR). A growth management plan has been devised in order to attract businesses and global investment into the CR. The people of South Korea await a stronger political commitment in this direction.
What are people selling to the South Koreans?
- Crude oil/ Petroleum products
- Semiconductors
- Natural gas
- Coal
- Steel
- Computers
- Wireless communication equipment
- Automobiles
- Fine chemicals
- Textiles
Who are South Korea’s top import countries?
- China (17%)
- Japan (10.2%)
- Unites States (8.7%)
- Saudi Arabia (7%)
- Qatar (4.9)
- Germany (4.1%)
Which is the top cargo airport in South Korea?
- Incheon International Airport ( Seoul/ Incheon)
Which are South Korea’s busiest shipping ports?
- Port of Yeosu Gwangyang
- Port of Incheon
- Port of Busan
What are South Korea’s import regulations and processes?
The process of importing products into South Korea is detailed but straightforward. South Korea uses the Harmonised System approved by the World Customs Organisation.
Documents include invoice, packing list, bill of lading and certificate of origin. Apart from these, the following are also required:
- Pricing declaration form
- Inspection clearance from related institutes
- Quarantine
- Approval and recommendations
- Application for duty rate reduction
- Application for agreed tariff
- Council tax payment proof
- Certificate of proposed duty rate
- Kimberly process certificate
Some prohibited goods include:
- Narcotics
- Pornography
- Subversive material
- Treasonous material
- Counterfeit goods or material
What are the import tariffs and taxes in South Korea?
Tariff rates are according to the South Korean tariff schedule list. They begin at KRW 150,000. It is amongst the leanest in the world averaging around 8%. Products with a high customs tariff value include agricultural products, seafood, alcoholic beverages, tobacco, textile and clothing.
Special excise of 10% to 20% is applicable to luxury products, automobiles and specific consumer goods.
The South Korean market and distribution system
South Korea is an evolved retail market consisting of departmental stores, supermarkets, hypermarkets and convenience stories.
Its distribution system though somewhat restrictive for imported products, is dominated by manufacturer controlled distributors and a large number of mom and pop retail stores. Education, health products, house décor, medical equipment, computer software, new energy power generation and luxury goods represent South Korea’s local growing markets.