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Foreign Retail Market Invades Korea

Friday 31st of August 2007 10:33:13 PM

US stores like the GAP, Canadian brand Roots, and Japan’s Uniqlo have increased their presence in the Korea’s low end retail market after much success in the high end market. GAP recently opened two stores, while Roots and Uniqlo are increasing their presence after entering the market with stores of their own in 2005. While this is a boost for these clothing companies and others, homemade brands may suffer due to increased competition.

“Homegrown brands are finally paying the price for recklessly hiking their prices, capitalising on the Korean consumer's preference for expensive products,” said one Korean retailer. While T-Shirts and other clothing is of the same quality, foreign retailers are able to offer these pieces at much lower prices than Korean clothing manufacturers. This means that there could be a shift in the Korean retail market if consumers are interested in saving money without sacrificing quality.

"Foreign brands have an undisputed advantage over domestic ones in both brand recognition and marketing. Domestic brands are only too likely to suffer when middle class consumers start to lean toward overseas brands,” said another Korean retailer. While consumers will be saving money, those who work in the retail industry may begin to feel the pressure from loss of manufacturing jobs and the disappearance of clothing labels altogether.

Even though foreign retailers and Korean retailers are able to share the market for now and remain profitable, as the foreign market begins to expand, the repercussions could be very bad for homemade brands in Korea.

(c)Zach Den Adel, www.sxc.hu