FASHION BUSINESS OPPORTUNITIE IN KOREA

As the 13th largest economy in the world, South Korea’s population of  close to  50 
million offers tremendous opportunities for UK  fashion  companies. South Koreans 
have experienced incredible increases in personal income and spending power, which 
is concentrated  but not exclusive to  the Seoul Metropolitan Area.  “Greater Seoul” is 
one  of Asia’s most important business hubs and home to almost half  the country’s 
population.


Middle and  upper class consumers have leant toward overseas brands since 2003. 
Foreign brands take advantage over domestic ones in terms of both brand recognition 
and marketing. Luxury foreign brands have dominated the nation’s high-end market 
and are now moving  in  to the mass market. The demand for  imported  mid-priced 
fashion brands is also increasing in Korea; foreign companies are taking market share 
from previously dominant local companies.  The so-called fast fashion market is 
growing rapidly in Korea as well. In particular, younger Korean consumers with fastchanging consumer tastes and who like lower-priced but trendy apparel, are willing to 
take up fast fashion of SPA (Speciality retailer of Private label Apparel) brands. 


The steady reduction in tariff barriers against imported fashion goods (Apparel 13%, 
Handbag 8%, Shoes 13%, Others 8% / VAT 10%), its evolving distribution system 
and diverse consumer tastes have  opened the market to foreign including  British 
fashion brands. The EU-Korea Free Trade Agreement (FTA)* was initialled in October 
2009, and is expected to come into force in the second half of 2010. The effect of the 
FTA will be to eliminate tariffs on 97% of  goods traded  between  the EU  and Korea
(within three years). The effect on the fashion sector is that the present  duty levied 
on imported apparels will fall to zero when the FTA kicks in.  Thus it will create a real 
"first to market" opportunity for UK and EU suppliers.


* EU-Korea FTA
The EU and South Korea finalised negotiations for a  Free Trade Agreement (FTA) 
on 15th October 2009. The agreement could deliver up to  Euros32billion of 
increased trade between the two  territories. The FTA should boost the UK’s 
commercial relationship with South Korea. UK’s exports to South Korea increased 
in  2007 and 2008  by  2.3% and 1.6% respectively. The deal still needs to be 
ratified by the respective legislatures.  

*Reference (www.uktradeinvest.gov.uk - Fashion market – South Korea)