Leading Sectors for U.S. Export and Investment

Commercial Sectors

Agricultural Sectors

Aerospace Industry (Return to Top)

ITA CODE: PR AIR

Overview

	2010	2011 (Est.)	2012 (Est)	2013 (Est)
Total Market Size	5,141	5,775	8,266	10,794
Total Local Production	2,365	2,349	2,576	2,692
Total Exports	935	1,025	1,192	1,346
Total Imports	3,711	4,451	6,882	9,448

Source: Korea Aerospace Industries Association. Unit: USD Million.

Korea is the 11th largest market for U.S. aerospace exports. Total U.S. aerospace exports to Korea exceeded USD1.5 billion accounting for 78 percent of the total value of Korea’s aerospace imports.

A 2010, Ministry of Knowledge Economy (MKE) report disclosed its “Aerospace Industry Primary Plan (2010 – 2019)” designed to raise Korea’s aerospace production from USD 2 billion (2009) to USD 20 billion by 2020, and raise exports to USD 10 billion, or 3 percent of global market share. The industry plan aims to take Korea from 16th place -- to the world’s seventh largest aerospace producer. Additionally, the goal is to: push Korean industry into importing core technologies, develop domestic capabilities to deliver a ‘complete aircraft,’ and bring effective R&D investment that will contribute to Korea’s aerospace industry.

Currently, the Korean aircraft part and components industry is driven by Korea operating one of the largest commercial aircraft fleets in Asia. The country has also embarked on establishing its aircraft components production industry to supply Boeing, EADS-Airbus and to support maintenance of both commercial and military aircraft. The current aerospace market is nearly USD4.39 billion and includes the expansion of fleet and route expansions planned for both passenger and cargo operations. Korea continues to be an important aircraft parts market for the U.S.

Best Products/Services

Opportunities

Top U.S. aerospace exports to Korea include: complete aircraft, civilian aircraft engines, equipment and parts, military airplane parts, and helicopters. Korea is continuing to develop its indigenous aerospace industry including the production of military helicopters, super-sonic fighter jets, unmanned vehicles, MRO parts & components, and continued work-share for commercial aircraft components for Boeing and EADS-Airbus. The U.S. continues to be the dominant foreign suppliers of aerospace/defense products and services with dominant import market share. This trend will continue for several years.

KORUS FTA Impact

Over 93 percent of current U.S. aerospace exports (based on 2007-09 average) will receive duty-free treatment immediately upon implementation of the FTA. Duties on the remaining seven percent of U.S. aerospace exports will be eliminated in three years.

Resources

Trade Shows

Korea Aerospace & Defense Exhibition (Seoul Air Show 2013)
Bi-annual: date to be determined

Naval & Defense 2013
Bi-annual: date to be determined

Key Contacts

Ministry of Knowledge Economy (MKE) -www.mke.go.kr

Ministry of National Defense (MND) - www.mnd.go.kr

Local Contact

Ms. Myoung Soo Lah
Senior Commercial Specialist
Commercial Service Korea
U.S. Embassy Seoul
188 Sejong-daero, Jongro-gu
Seoul 110-710 Korea
Tel: 82-2-397-4516
myoungsoo.lah@trade.gov
www.export.gov/southkorea

Specialty Chemicals (Return to Top)

ITA CODE: PR CHM

Overview

	2010	2011 (estimated)	2012 (estimated)	2013 (estimated)
Total Market Size	39,381	41,350	43,418	45,588
Total Local Production	31,498	33,073	34,727	36,463
Total Exports	6,728	7,064	7,418	7,789
Total Imports	14,611	15,342	16,109	16,914
Imports from the U.S.	2,330	2,447	2,569	2,697
Exchange Rate: 1 USD	1,120	1,120	1,120	1,120

Source: Korea Specialty Chemical Industry Association (KSCIA). Unit: USD thousands.

Korean demand for high quality, sophisticated chemicals and associated substances, for the development of new products continues to present excellent opportunities for U.S. chemical manufacturers.

The specialty chemical market size in 2010, valued at USD 39 billion, represented a 5 percent increase over 2009. During this period foreign suppliers satisfied 37 percent of the demand for raw and intermediate materials and new substances. Chemical imports from the U.S. totaled USD1.9 billion; the U.S. share was 16 percent of all specialty chemical import.

This sector has matured and now focuses on the development of finished products as well as multi-application products such as dyes, paints, and surfactants. Korea’s domestic producers appear to be on par with other advanced countries. However, Korea’s local companies still have challenges with specialty chemicals that require accumulated core technologies, substantial R&D investment, or those with short product-life cycles. Smaller economies of scale and a lack of a global marketing network are also considered obstacles that limit the development of Korea’s specialty chemical industry – providing niche opportunities for U.S. chemical products and exporters. As a result, local demand for specialty chemicals still depends on imports of chemical ingredients and intermediaries to produce finished goods.

Chemical tariffs range from zero to 30 percent; the average is 6 percent. The KORUS FTA having passed both countries’ legislatures (in 2011) is expecting implementation by Spring 2012. The agreement provides that over 51 percent of U.S. chemical exports will receive duty-free treatment immediately. The agreement uses importer based claims for preferential tariff treatment while allowing importers, exporters and producers the flexibility of issuing certifications that need not be in a specific format. This trade agreement, for chemical products, uses clear and comprehensive product-specific rules to determine which products can benefit from the FTA’s preferential tariff treatment.

In line with Korea’s 22 ‘green’ initiatives (adopted in 2008) the ROKG is actively pursuing the implementation of a program that will significantly affect the chemical industry in Korea. ‘Korea R.E.A.C.H.’, a chemical registration and evaluation system, modeled after ‘EU R.E.A.C.H.’ (registration, evaluation, authorization, and restriction of chemical substances) may become law in the near future. U.S. chemical associations, U.S. chemical exporters active in the Korean market, the chemical committee of the American Chamber of Commerce in Korea, and the U.S. Commercial Service Korea are closely monitoring and reporting on the impact this legislation would have for the U.S. chemical community in Korea.

Sub-Sector Best Prospects

Opportunities

Although local and third country competition is intense, highly innovative chemical materials from the U.S. have a market in this mature economy. Korea is a very good market for U.S. companies in the pharmaceutical, cosmetic, coatings/pigments for plastics, as well as other niches -- especially those requiring high technology.

Additionally, new molecular materials, chemical ingredients for electronics and IT, as well as functional and high-performance biologically active chemical ingredients are in demand from Korea’s end-users. The market is also interested in environmentally friendly chemical products.

Finally, Korean companies and government agencies actively pursue alliances with chemical companies who offer advanced know-how for the production of high-end products.

Web Resources

Trade Show
XpoChem Conference 2012 (Annual; date to be determined)

Trade Association

Korea Specialty Chemical Association - www.kscia.or.kr/english and for information on Korea’s REACH (only in Korean).

Key Contact

Ministry of Environment - http://eng.me.go.kr/main.do

Local Contact

Ms. Young Hee Koo
Commercial Specialist
Commercial Service Korea
U.S. Embassy Seoul
188 Sejong-daero, Jongro-gu
Seoul 110-710 Korea
Tel: 82-2-397-4396
young.hee.koo@mail.doc.gov
www.export.gov/southkorea

Cosmetics (Return to Top)

ITA CODE: COS

Overview

	2009	2010	2011(E)
Total Market Size	4,901	5,457	5,893
Total Local Production	4,615	5,203	5,619
Total Exports	416	597	645
Total Imports	702	851	919
Imports from the U.S.	171	225	248

Exchange Rate: USD1= KW1,120 (2009), 1,156 (2010), 1,156 (2011); Sources: Korea Pharmaceutical Traders Association (KPTA), Korea Cosmetic Association (KCA); Unit: USD million.

Total imports of cosmetics in 2011 are estimated at USD 919 million. U.S. imports are estimated to be USD 248 million, representing approximately a 27 percent import market share. It is estimated that by 2012, the Korean cosmetics market will increase by 8 percent over 2010 and reach a value of approximately USD 6.6 billion. The market is expected grow at an average annual rate of 5-10 percent over the next several years.

According to industry sources, the growth of parallel imports and recently reduced tariff rates will contribute to an increasing demand for quality foreign cosmetics. Also, the implementation of the U.S. - Korea Free Trade Agreement (KORUS FTA) will eliminate Korean tariffs on imported U.S. cosmetics over a ten year period after implementation. These market trends signal good opportunities for U.S. companies in the years ahead.

The Korean cosmetics market is polarized, with products focused both at the premium end and at the lower-priced, mass-market end. Thus, cosmetic companies focus their offerings towards two distinct groups of consumers or target audiences: consumers shopping at low-cost cosmetics franchise stores and those that are shopping for high-end luxury cosmetics at more expensive department stores.

Sales of men’s cosmetics will continue to expand from 2009 sales levels. This growth reflects the interest of male consumers expanding from simple skincare to other cosmetics, such as facial scrubs, facial masks, concealers, SPF products, and other cosmeceutical products. With this trend, men’s skincare salons have opened in business districts and provide one-stop total beauty and hair care services including hair cutting, perms, treatments, and facials. To meet this increasing demand for men’s skincare products, many department stores have opened men’s cosmetics counters on the men’s floor featuring recognized international brands like Clinique, Clarins, and Biotherm that offer after-shave lotions, cleaning foams, facial scrubs, facial packs, essences, and other functional cosmetics.

Best Prospects/Services

Opportunities

The recent introduction of on-line shopping malls, television home-shopping channels such as QVC, pharmacies/drug stores, and catalogue orders have emerged as challengers to traditional retail channels such as direct selling, multi-level marketing, "mom and pop" stores, specialty retail establishments, department stores, and discount stores.

There are currently three major franchised drug stores competing in the local market, Olive Young by CJ, W-Store by Kolon, and GS Watson’s by GS in partnership with Watson’s. These retailers target customers focusing on wellness products by providing organic/natural cosmetics, nutritional supplements, OTC drugs, and general consumer goods. In addition, some major Korean cosmetic manufacturers are interested in importing well-known U.S. cosmetics. U.S. companies are encouraged to seek opportunities in line with this new retail concept.

Resources

Major Show

Name: Seoul Cosmetics & Beauty Expo 2012
http://www.cosmobeautyseoul.com/en/index.php

Key Contacts

Korea Food & Drug Association (KFDA) - http://eng.kfda.go.kr/index.php

Korea Pharmaceutical Traders Association (KPTA) - http://www.kpta.or.kr/E_main.asp

Korea Cosmetic Association (KCA) - http://www.kcia.or.kr/eng/company/greeting.asp

Local Contact

Ms. Yoon-shil Chay
Senior Commercial Specialist
U.S. Embassy Seoul
188 Sejong-daero, Jongro-gu
Seoul 110-710 Korea
Tel: 82-2-397-4439
Yoonshil.chay@trade.gov

Defense Industry Equipment (Return to Top)

ITA CODE: PR DFN

Overview

The Republic of Korea (ROK), with the world’s sixth largest military force, continues to be a major defense and security ally of the U.S. in the Pacific region

The ROK has been modifying its armed forces towards a “smaller but more capable force” with decreased troops level and more advanced equipment including fighters, naval platforms, and ground combat vehicles. The sinking of South Korea’s navy vessel “Cheonan” (March 2010) and the artillery attack on South Korea’s Yeonpyung Island (November 2010), both near the inter-Korean Northern Limit Line, accelerated this reform, while also raising the needs of preparedness against North Korean provocations.

In March 2011, the ROK Government announced its revision, “DRP 307” plan, which is designed to strengthen the defense against North Korea’s localized military attacks and asymmetric threats as well as optimize a military command structure.

It is expected that there will be continued review on platform procurement requirements as Korea continues to revise what products/systems are needed in light of this new threat assessment. It is expected that the force improvement plan will focus more on command and control, land systems, maritime patrol/littoral support and armor.

Market Demand

	2010	2011 (Estimated)	2012 (Projected)	2013 (Projected)
Total Market Size	8,275	8,812	8,994	9,180
Total Local Production	7,707	9,342	10,086	11,152
Total Exports	1,188	2,400	3,000	3,920
Total Imports	1,756	1,870	1,909	1,948
Imports from the U.S.	1,159	1,234	1,260	1,286
Exchange Rate: 1 USD	1,100	1,100	1,100	1,100

Note: The statistical data above is an unofficial estimate from CS Korea based on the budget of Korea’s Force Improvement Plan (FIP), Defense Acquisition Program Administration (DAPA)’s procurement plan, and media reports. Unit: USD Million.

For FY 2012, a total of USD 29.96 billion has been announced for defense budget which includes USD 8.99 billion for the force improvement plan (FIP). The total budget and FIP budget is each a 5.0 percent and a 2.1 percent increase compared to the previous year.

Breakdown	2011	2012
Total Defense Budget	28,548	29,961
Force Improvement Plan (FIP)	8,812	8,994
Operation & Management (O&M)	19,736	20,967
Exchange Rate: 1 USD	1,100	1,100

In 2012, Korea plans to conclude acquisition contracts of several major defense items including the following:

The ROK’s local defense industry is growing fast with great emphasis placed on exports. In 2011, total exports of defense products were USD 2.4 billion, more than double of 2010 (USD 1.1 billion) levels and 10 times higher versus five years ago (USD 0.25 billion). This impressive growth in 2011 is largely attributable to two major export contracts: T-50 trainer jet exports (16 units, USD 400 million) and submarine exports (3 units, USD 1.1 billion, Korea’s biggest-ever defense export case) -- both to Indonesia. The ROK aims to continue to foster the domestic defense manufacturing industry, and expects the export value to reach USD 10 billion in five years.

Market Access & Obstacles

The ROK’s defense procurement agency, Defense Acquisition Program Administration (DAPA) is a sole government agency in conducting and executing the procurement of defense equipment. Established in 2006, DAPA is the primary government agency conducting ROK’s defense procurement and is the only agency that is authorized to negotiate on behalf of the Ministry of National Defense (MND) for defense products and services, as well as being the only agency that can authorize offset credits, dictate terms and conditions, and make changes to delivery schedules or required deliverables. DAPA controls all formal negotiations on price, technology transfer, local work share, and offset packages, which are required by the Korean government for all projects in excess of USD10 million. A large portion of Korea’s export of defense products is a result of DAPA’s defense offset program.

In 2010, DAPA announced new guidelines on the utilization of commissioned agents. The new policy requires DAPA to enter into contract directly with foreign prime contractors without the intervention of a commission agent for major acquisition programs exceeding USD 2 million. The policy applies only to Force Improvement Programs (FIP), which includes purchases, development, upgrades, and associated installations. Smaller value FIP projects and sustainment projects are not affected.

US Position in Korea’s Defense Industry

The U.S. continues to maintain primary supplier position in Korea but the presence of other major suppliers like Germany and Israel are increasing. U.S. provided weapon systems to ROK totaling USD 1,159 million in 2010, which accounts for 66 percent of ROK’s total defense imports. U.S. standards are generally accepted in Korea and most Korean defense systems are based on American standards.

Commercial sales in the defense industry account for 64 percent of DAPA procurement but the MND encourages more government-to-government foreign military acquisition programs in an effort to reduce costs.

End-users

The principal point of contact for major defense projects are the service branches (ROKAF, ROKA, ROKN) and DAPA (Defense Acquisition Program Administration). These branches of the military procure all necessary equipment and systems through DAPA. For projects requiring local co-production or co-development, foreign firms very often participate in consortia with leading local firms such as KAI, Hyundai Heavy Industries (HHI), and Samsung Thales etc.

Sub-Sector Best Prospects

Opportunities

Web Resources

Trade Shows

Seoul International Aerospace & Defense Exhibition 2013 (Seoul Air Show 2013)

October 22-27, 2013 - http://www.seoulairshow.com

As the Defense Acquisition Program Agency (DAPA) conducts the formal contracting, presentations to DAPA are the best marketing tools to introduce new product/systems/services. DAPA provides this opportunity every two or three months Consult: http://www.dapa.go.kr to confirm their future schedule, or Acquisition Policy Division, Acquisition Plan Bureau, Defense Acquisition Program Administration (DAPA), 2-15 Yongsandong 2 ga, Yongsan-gu, Seoul 140-833, Republic of Korea.

Local Contact

Mr. Young Wan Park
Commercial Specialist
US Commercial Service Korea
US Embassy Seoul
188 Sejong-daero, Jongno-gu
Seoul 110-710 Korea
Tel: 82-2-397-4164
youngwan.park@trade.gov
http://www.export.gov/southkorea

Education Services (Return to Top)

ITA CODE: SV EDS

Overview

	2010	2011	2012 (estimated)	2013 (estimated)
Total Market Size	42,521	42,946	43,375	43,807
Total Local Production	38,095	38,476	38,861	39,249
Total Exports	54	55	56	57
Total Imports	4,480	4,525	4,570	4,615
Imports from the U.S.	1,118	1,129	1,140	1,152
Exchange Rate: 1 USD	1,120	1,120	1,120	1,120

Education, from pre-kindergarten to college plays a very significant role and is important to the Korean economy and psyche. There are good opportunities for a wide swath of U.S. educational institutions - sectors and subsectors if they are prepared to meet a highly sophisticated, demanding and brand-oriented market. According to the Organization for Economic Cooperation and Development (OECD), Korea is one of the largest investors in education among developed countries.

The governments of the UK and Canada spend a significant amount of money and organizational power in the Korean market. Australia, the Philippines and New Zealand also compete for Korean’s educational dollars. China and Japan also vigorously promote their countries as attractive destinations for Korean students. That said, there is a predisposition towards U.S. educational institutions, materials and services which stems, in part, from the USG’s 60 year military year presence on the peninsula.

Higher education is synonymous with privilege and power in this trillion dollar economy, Asia’s fourth largest economy and our seventh most important trading partner. A degree from a well-known institution is a status symbol and essential for finding the right job in the right company although the government tries. Coveted spaces in Korea’s top schools are open to competition from all students, but attainable only for a few. Many talented students opt for the best schools overseas and obtain a diploma from an accredited overseas school. This translates into opportunities for US schools to recruit some of Korea’s most talented students. Koreans remain willing to spend a substantial portion of their incomes on education.

According to the Student and Exchange Visitor Information System (SEVIS) a total of 104,908 Korean students are enrolled in U.S. institutions (2011). Korea has ranked first, second or third behind China and India in terms of number of foreign students studying in the U.S. over the last few years.

Some 289,288 students are studying abroad (Korean Ministry of Human Resources and Science statistics, April 2011) with education market share as follows: U.S. 25 percent, China, 22 percent, Australia, 12 percent, Japan (9 percent), U.K. (6 percent, Canada (5 percent), and other countries (21 percent). While U.S. schools and institutes remain popular, the UK, China, Australia, Japan, and Canada are also vigorously promoting themselves as attractive destinations for Korean students.

Sub-Sector Best Prospects

Opportunities

A host of new and creative on-line educational programs, exchange programs, community colleges, ESOL type programs and off-campus/ world-wind tour type educational programs for middle-school, high school and college are finding the Korean market captivating and hopefully lucrative.

Korean parents are now savvier about acquiring information about educational opportunities for their children. Agents or reps are utilized less. Educational entities should consider employing a combination of: on-line advertising, blogging, personally visiting middle and high schools, alum groups, Facebook, You-tube, Twitter, advertisements in popular search engines, in Korean-American community newspapers (in the States), and advertising in business newspapers and/or on cable TV or radio in Korea in their promotional campaigns. Koreans prefer educational entities that have a long-term commitment to Korea and its students.

Web Resources

Trade Shows

Kids Education Fair - http://kidsedufair.co.kr/

Korea Study Abroad & Emigration Fair - http://www.yuhak2min.com/eng_yuhak/sub03_01.asp

MBA Tours - http://www.thembatour.com/index.shtml

University Fair organized by Linden Tours - http://www.lindentours.com

Korea Student Fair - http://www.aief-usa.org/

Key Contacts

Ministry of Education, Science and Technology - http://english.mest.go.kr/

Fulbright (Kor-Amer. Educational Commission) - http://www.fulbright.or.kr/xe/?mid=index_en

KOSA (Korea Overseas Studying Agencies) - http://www.kosaworld.org/

Local Contact

Ms. Young Hee Koo
Commercial Specialist
US Commercial Service Korea
US Embassy Seoul
188 Sejong-daero, Jongno-gu
Seoul 110-710 Korea
Tel: 82-2-397-4396
younghee.koo@trade.gov
http://www.export.gov/southkorea

Energy: New and Renewable (NRE) (Return to Top)

ITA CODE: PR REQ

Overview

	2009	2010	2011 (estimated)	2012 (estimated)
Total Market Size	3,129	4,002	7,289	8,205
Total Local Production	3,817	6,988	13,481	17,391
Total Exports	2,040	4,532	7,650	10,700
Total Imports	1,352	1,547	1,458	1,514
Imports from the U.S.	NA	NA	NA	NA
Korean government investment plan	436	466	622	588
Exchange Rate: 1 USD	1,275.82	1,156.05	1,108.02	1,150.00

Total Market Size = (Total Local Production + Total Imports) – (Total Exports); Data Sources: Korea Energy Management Corporation (KEMCO); Korea Energy Management Corporation (KEMCO) and Ministry of Knowledge Economy (MKE); Imports from U.S.: NA; Unit: USD million.

Korea's energy needs continue to grow despite the fact that the country remains dependent on imported fossil-fuels. Korea formerly (1990s) produced coal but the cost of domestic production exceeded the cost of importing coal. Korea continues to place significant resources on civil nuclear power. While its nuclear power output is increasing, it still represents only 14 percent of the country’s total energy mix. Forecasts indicate that the country will be consuming 250 percent more energy by 2020 compared to 1990. For a nation 97 percent dependent on imported energy sources, these estimates have resulted in the Korean government taking a series of preventative measures to avoid future energy crises that involve the development of new and renewable energy (NRE) sources.

Influenced by global trends, Korea’s NRE industry increased output 124 percent over the last four years. Among all sources (i.e solar photovoltaic and thermal, wind, bio energy, geothermal and fuel cell), wind and solar PV energies, have been the predominant energy sources representing 87 percent (2011) of the total NRE because they are technically more mature.

Photovoltaic: Korea’s new national energy plan includes the “Two Million Green Home Initiative” and a Renewable Portfolio Standard (RPS) plan replacing the old feed-in-tariff (FIT) policies. Korea, currently in 10th place as a producer of solar power, has a cumulative PV capacity of 655 MW but plans to expand output to 3,504 MW by 2030. Taking advantage of government incentives, large Korean conglomerates (Samsung, LG, Hyundai and Hanwha) have made significant investments and are expanding into solar moldule, crystalline silicon solar panels and the cell business.

Wind power: Korea’s current wind power capacity is estimated at 382 MW. In late 2010, the government announced a “Roadmap for Promoting Offshore Wind Power” and a plan for constructing a 2.5 GW offshore wind farm in the area off the coast of Buan in North Jeolla Province. Worth USD 8.9 billion (KRW 10.2 trillion) in total, this project is expected to be completed by 2019. This development underscores the interest in offshore wind power shown by many Korean industrial conglomerates who have gained experience in the relatively advanced European and U.S. wind power markets.

Fuel cells: Fuel cells have featured prominently in Korea’s clean energy policies in recent years. Starting in 2010, the Korean government began offering an 80 percent subsidy to help pay for the purchase and installation of residential fuel cells. As part of their “Two Million Green Home Initiative”, the country plans to have 1 million green homes by 2020, 100,000 of which will be powered by fuel cells. They are also promoting a concept that excess electricity produced by a fuel cell unit will be bought back for premium prices through feed-in-tariffs (FIT). Aside from the innovative fuel cell FIT, Korea’s commitment to fuel cell and hydrogen energy technology can be seen in the new Renewable Portfolio Standard (RPS) which priortizes the use of fuel cells highest among the various options. This means that power producers will receive more payment for electricity produced from a fuel cell rather than from any other renewable source.

Tidal power: A collaboration between Lunar Energy (UK) and Korean Midland Power Co (KOMIPO) plans to construct a colossal 300 12 meter in diameter turbine field in Wando costal area by 2015, providing 300 MW of renewable energy. Korea's abundant potentials from marine energy will be a focus of the Yeosu World Expo (May 12 to August 12, 2012) in the Southern end of the Country. Numerous pilot projects will be highlighted during the three month Expo.

Sub-Sector Best Prospects

Photovoltaic power: Next-generation solar cells including thin-film modules and roof-top systems are expected to generate substantial demand in the future.

Wind power: With oceans on three sides, Korea’s focus on wind-power is rapidly shifting from ground applications to offshore applications.

Fuel cells: Korea is home to some of the world’s largest hydrogen & fuel cell power plants. With ROKG’s strong policy support and Korean industry’s active participation, the fuel cell industry is forecast to grow to be one of most rapidly growing NRE sectors in the future.

Marine energy: Korea has an abundant access to marine energy and is aggressively emphasizing such development through on-going R&D projects and pilot construction projects.

Integrated gasification and combined cycle (IGCC): For the high efficiency and environmentally friendly feature of this technology, Korea has plans to adopt it for new coal-fired plants including one with a capacity of 300 MW which is planned to be completed by 2012 by Korea Western Power Company.

Opportunities

Korea Electric Power Corporation (KEPCO) is the state-run power company and is the primary end-user of NRE products and services. It supplies more than 90 percent of Korea’s entire electricity needs from its six generating subsidiaries (Gencos) that include five (5) fossil fuel-fired companies and one nuclear-hydro company. Required by ROKG’s policy initiatives towards NRE, the Gencos have diversified their energy sources, and are now generating a certain amount of electricity from low-carbon methods. They will need to continue to shift the power source to NRE as RPS will be fully in effect starting 2012.

The six Gencos include:

As end-users, the Gencos and the fledgling independent power producers (IPPs) exert strong influence in choosing what NRE core parts to use. Under the current supply chain, engineering & construction companies (E&C) who provide turn-key construction service usually are the buyers of most NRE technologies and parts. There are several large-sized EPC companies who are mostly subsidiaries of Korea’s business conglomerates (Samsung, Hyundai, SK, GS, etc). With the popular concept of project financing for the power plant industry, many NRE power plant construction projects are led by business consortia that consist of end-users, EPC companies, financial service entities, and equity investors, etc. that collectively influence major procurement decisions.

Korean domestic production and the acceptance of new renewable energy solutions continues to be hampered by opaque and changing rules regarding how technologies are tested and selected. Many importers observe shifting government incentives and certification regimes designed to discourage the selection of imported products. The US Commercial Service continues to work closely with US companies to ensure these rules are applied uniformly and transparently to domestic and international competitors alike.

Web Resources

Trade Shows

Solar Con Korea - Feb.7-9, 2012/COEX, Seoul, Korea-http://www.semiconkorea.org/en/

Expo Solar/PV Korea - Feb. 15-17, 2012/KINTEX, Ilsan - http://www.exposolar.org/2012/

International Green Energy Expo Korea 2012 - March 28-30, 2012/EXCO, Daegu - http://www.energyexpo.co.kr/eng/

Solar Wind Earth Energy Trade Show (SWEET 2012) - April 24-26, 2012/ KDJ Center - http://www.sweet.or.kr/eng/index.php

Korea Energy Show - Octonrt 2012/COEX- www.koreaenergyshow.or.kr/dbhome/user/2011kgeseng/

Key Contacts

Korea Energy Management Corp. (KEMCO) www.kemco.or.kr/new_eng/main/main.asp

Ministry of Knowledge Economy (MKE) http://www.mke.go.kr/language/eng/index.jsp

Korea Custom Service (KCS) - http://english.customs.go.kr

Local Contact

Mr. Nathan Huh
Commercial Specialist
US Commercial Service Korea
US Embassy Seoul
188, Sejong-daero, Chongno-gu
Seoul 110-710 Korea
Tel: 82-2-397-4130
nathan.huh@trade.gov
http://www.export.gov/southkorea

Entertainment and Media (Return to Top)

ITA CODE: N/A

	2010	2011 (E)	2012 (E)	2013 (E)
Total Market Size	2,414.52	2,542.06	2,663.34	2,775.95
Total Local Production	3,714.64	3,910.86	4,097.44	4,270.70
Total Exports	1,857.32	1,955.43	2,048.72	2,135.35
Total Imports	557.20	586.63	614.62	640.60
Imports from the U.S.	222.88	234.65	245.85	256.24
Exchange Rate: USD1	1,120	1,106	1,100	1,100

Source: Korea Creative Content Agency (KOCCA), Korea Film Council (KOFIC); Unit: USD million.

Sub-Sector Best Prospects:

Music

	2010	2011	2012 (E)	2013 (E)
Total Market Size	673.21	747.74	813.11	883.63
On-line Market	559.82	630.20	693.22	762.54
Off-line Market	113.39	117.54	119.89	121.09

Source: KOCCA, Unit: USD million

Approximately 80% of music in Korea is sold online. According to the Korean Creative Content Agency (KOCCA), on-line music revenues in 2011 amounted to USD 630.20 and grew at an estimated 10% over 2010. Wholesale and retail revenues for CDs or tapes were USD 117.54 million, and off-line sales remained at 2011 levels. KOCCA predicts that on-line sales revenue will be 90 percent of total music market demand by 2014.

On-line music service providers’ influence grew significantly in 2010 when smart phones hit the market and online music sales increased. Currently two out of five cell phone users in Korea are smart phone users, and 62 percent of music service subscribers download their music through their phones. More people download their music through their phones than through their PCs.

‘Melon’ (an affiliate of SK Telecom), has 47 percent of the music market with 17 million members and 2 million subscribers. Mnet (of CJE&M) is second, and ‘Olleh Music’ (by KT) is in third in market share.

Broadcasting Content

Broadcasting Content by Import and Genre

	2009	2010	2011 (E)
Terrestrial TV	3,303	2,121	2,333
Cable TV/Independent Production Companies	62,646	8,312	9,550
Total	65,948	10,433	11,883

Unit: US$ 1,000; USD1= 1,170 Won (2009), 1,120 Won (2010), 1,106 (2011); Source: KOCCA

TV content is imported for several platforms in Korea. Terrestrial TV imports 20.3 percent; cable TV and independent production companies import 79.7 percent.

2010 witnessed a dramatic decrease in imported content for several reasons. These include a reaction of the dramatic increase in imported content in 2009, the downscaling of TV advertisements due to the financial crisis, and a return by viewers to locally produced content.

Animation constitutes the largest portion of imported content for terrestrial TV at 57.6 percent, followed by documentaries at 25.1 percent, and movies at 15.7 percent. For cable TV and independent production companies, ‘dramas’ represent the biggest share of imported content at 66.1 percent, followed by entertainment programs at 22.5%. Foreign dramas and movies continue to be popular to Korean viewers. The launch of new channels will increase the importation of foreign dramas and movies, mainly from North America, the U.K. and European countries. Detective and crime stories are primarily sourced from North America; most European imports are documentaries and animation. About 90 percent of imported content for cable TV comes from North America and the U.K.

Overall Ratio of Broadcasting Content Imported by Country

Film

Market Share by Country

	Korea	U.S.	China	Europe	Japan	Others
Jan.-Nov. 2011	51.1	44.3	0.4	2.2	1.4	0.7
Jan.- Nov. 2010	43.4	51.3	1.4	2.0	1.8	0.1

Source: Korea Film Council (KOFIC); Unit = %

SNS (social network systems) increases the speed and breath of information available on newly released films. Now, even small budget films have the potential for market success as SNS is an important and powerful promotional tool.

Additionally, both the film industry and government are aggressively educating the public to counter illegal downloads. As a consequence of this and government enforcement efforts, illegal downloading is decreasing and the revenue from IPTV, a content streaming service, is increasing.

According to the survey conducted by the Korean Film Council (KOFIC), the average number of titles watched by viewers aged 15 to 59 was 10.5 in 2011. Action titles were the favorite genre on all platforms overall, followed by dramas and romantic comedies. The most popular genres watched at cinemas were, in this order: action films, science fiction, adventure stories, and romantic comedies. Korean films were the most popular (47.1 percent), followed by films from the U.S. (38.1 percent), European films (1.8 percent), Japan (1.6 percent) and China and Hong Kong (0.9 percent.) Other countries account for less than two percent. Korean males ages 19 to 34 prefer Korean films and those 35 to 59 prefer U.S. films. Regardless of age, Korean females prefer Korean films. Overall, 10.6 percent of the audience does not care what the country of origin is.

Content IPR

Both countries have already ratified and acceded to the major IPR treaties, including the WIPO Copyright Treaty (WCT). Under the KORUS FTA, both countries agreed to higher levels of IPR protection by incorporating in the agreement all the obligations set forth in the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT) for the distribution and transmission of protected materials over the Internet and for products in digital format generally. With the digitization of all works and their transmission over the Internet becoming increasingly commonplace, the continued treatment of sound recordings in a manner different from other protected works can no longer be justified. The KORUS FTA ensures that record producers and performers receive protections close to those of other right holders.

There is no tariff applied to imported content or music. However, films and videos are subject to review by the Korea Media Rating Board.

Trade Shows

Busan International Film Festival http://www.biff.kr

KCTA Show http://www.kctashow.com/eng/main.html

Key Contacts

Korea Communications Commission - http://eng.kcc.go.kr/user/ehpMain.do

Ministry of Culture, Sports and Tourism - http://www.mcst.go.kr/english/index.jsp

Korea Creative Content Agency - http://www.kocca.kr/eng/index.html

Korea Cable TV Association - www.kcta.or.kr (No English version available)

Korea film Council - http://www.koreanfilm.or.kr/jsp/index.jsp

Local Contact

Ms. Alex Choi
Commercial Specialist
US Commercial Service Korea
US Embassy Seoul
188, Sejong-daero, Chongno-gu
Seoul 110-710 Korea
Tel: 82-2-397-4466
alex.choi@trade.gov
http://www.export.gov/southkorea

Franchising (Return to Top)

ITA CODE: SV FRA

Overview

Franchising in Korea is a USD 67 billion (2011) dollar industry with potential to grow especially in a wide array of service and new food sector areas. Koreans are avid and demanding consumers.

Nearly 2,400 franchises were registered in Korea in 2010. Fourteen thousand convenience store franchises operate in Korea (2010 Yearbook of Retail Industry) of which 2,443 opened in 2009. Nearly 1400 were food service franchises, and 252 were education-related franchises. On average, a franchise operates 70 stores across its industry in Korea. A third of franchise investments in Korea are between USD 4,300 and USD 8,700, and half of the contracts between franchisors and franchisees are for two years.

Franchising Market Sales in Korea – 2008

Industry Sector	Sales
Food Service	USD 44.6 (66.6%)
Service	USD 14.8 (22.1%)
Retail	USD 7.6 (11.3%)
Total	USD 67 (100%)

Sources: Korea Franchising Industry- 2008 by Korea Chamber of Commerce & Industry (KCCI), Korea Food Service Information Co., Ltd. and the Korea Franchise Association; Unit: USD billion.

Franchisors interested in this market must:

meet the rules promulgated under Korea’s Fair Transactions in Franchise Business Act,

Since the 1980s all the major first, second and third tier U.S. food chain franchises have either been successful in Korea, have been here and failed, or are trying to return -- a very difficult proposition in a country that doesn’t forget a failed food enterprise. Interested investors should consult our 2012 Industry Sector Analysis (ISA) on franchising.

The March 15 implementation of the KORUS FTA will positively affect this industry in many ways, to include:

Sub-Sector Best Prospects

Food service:

According to the Food Bank (www.foodbank.co.kr), a major research institute, Korea’s food service industry has reached its saturation point and is at a transition point as Korean customers become more sophisticated. Koreans now demand high quality taste with high quality food ingredients, service, and operations. This period is characterized by interest in molecular cuisine, noodles, roasted coffee, ice-cream, Japanese ramen noodles, yang & daechang (Korean traditional meat dish) and premium burgers and sandwiches. Franchises providing quality take out service, or food service for large events have potential in this market.

Service: Koreans are preoccupied with education (pre-kindergarten to college) thus education service companies hold high potential in this market. Laundry service, auto maintenance, hair, senior day care, homecare, home delivery services (all sectors), home child care, child care, human resource training and pet service providers are among the many service franchises with potential.

Retail: Korean baby boomers are the largest age cohort. Seven million baby boomers will retire from 2011 to 2016. Forced corporate retirees before age 55 years of age are prime candidates to own and operate both service and retail franchises such as: health and beauty, organic specialty stores and others.

Opportunities

Korea’s key retail players have reported to CS Korea their interest in opening numerous mega malls outside Seoul in the next three to five years. These highly respected (chaebol) retailers seek food service and retail (anchor stores) franchises for their expansions. They seek to become master franchisors of a U.S. franchise and some wish to recruit tenants for their new stores. They seek restaurants with a unique concept or theme. While Koreans are attached to their traditional food they tend to adopt and adjust quickly to exotic foods. Thus, Korea is a market where new food franchise models are relatively easy to introduce.

Service providers in wellness and environmentally friendly industries also hold potential. The Korea Chamber of Commerce (KCCI) reported a positive outlook for service providers in wellness/well-being, environmentally friendly products, education, sports and leisure activities, personal service, green growth, and children’s items. The growing number of Korean senior citizens means the demand for service companies in this area will steadily grow.

The market is growing fast with the emergence of new types of retail stores such as organic specialty stores and health & beauty stores entering into the market.

Potential Korean franchisees are seeking and prefer to do business with U.S. franchisers that offer established brand names to Korean consumers as well as offering American-style, systematic operations and management skills. Three groups exist in this market – investors (some who have no experience in the franchise they seek to own/start), folks with real experience with franchising brands, and retirees age 40 and above who wish to own their own business. Investors should seek an experienced work force that can then mentor and monitor the franchisees performance in this highly competitive and mature market.

Web Resources

Korea Franchise Association - ahnkfa@gmail.com - http://www.ikfa.org/

Fair Trade Attorney Association - admin@fea.or.kr - www.fea.or.kr

Korea Fair Trade Commission - http://eng.ftc.go.kr/

Korea Chamber of Commerce & Industry - http://english.korcham.net/

Korea Legislation Research Institute: www.klri.re.kr

To review The Fair Transactions in Franchise Business Act in English, please visit the web-site and search for the act. You must log into the site to access all legislations in English. There is no fee for this service or for membership.

Trade Shows

Korea’s trade shows, while numerous and varied across a wide-range of sectors, are highly B2C in nature.

New Business & Franchise Show April Sunin Community

Franchise-New Business Busan Int’l. Expo June Busan CCI

Busan International Senior Expo 2012

Busan Franchise Expo 2012 September Busan Economic Promotion Agency

Local Contact

Ms. Grace Sung
Commercial Specialist
US Commercial Service Korea
US Embassy Seoul
188 Sejong-daero, Jongno-gu
Seoul 110-710 Korea
Tel: 82-2-397-4324
grace.sung@trade.gov
http://www.export.gov/southkorea

Medical Equipment and Devices (Return to Top)

ITA CODE: PR MED

Overview

	2009	2010	2011 (E)
Total Market Size	3,157.4	3,375.8	3,713.3
Total Local Production	2,468.1	2,564.4	2,820.8
Total Exports	1,190.1	1,454.4	1,599.8
Total Imports	1,879.4	2,265.8	2,492.3
Imports from the U.S.	763.0	943.8	1,085.3

Exchange Rates: USD1= KW 1,120 (2009), 1,156 (2010), 1,156 (2011); Source: Korea Medical Devices Industry Association, KMDI); Unit: USD million; Note:Given the sharp decline in Korean Won/ US $ exchange rates in 2009, the above table distorts the positive real growth we anticipate in this sector.

The Korean medical device market is estimated to reach USD 4.4 billion by 2013. One important factor that may slow the import market growth rate will be the pricing and reimbursement measures that the Korean government grapples with under its national healthcare system.

Korea depends on high end medical devices as listed in Best Products/Services (below) from the U.S., EU, and Japan to supply about 65 percent of total market demand. Korean companies make comparatively lower end medical devices. Another factor favoring the use of imported advanced medical equipment and devices is the growing number of elderly population and Korean doctors educated in the U.S. and Europe who are accustomed in using advanced medical devices. In 2010, total imports of medical devices were USD 2.3 billion, with U.S. imports of USD 944 million. The U.S. market share represents 40 percent of the import market. Market demand for foreign advanced and innovative medical devices in 2011 was estimated to grow slowly since the Korean economy has not recovered, and exchange rate of the Korean Won vis-à-vis the U.S. dollar is still not stable.

The importation of medical devices requires the assignment of an importer or representative based in Korea to manage medical device approval and to ensure regulatory compliance. As part of the pre-market approval requirements, the Government of Korea requires testing reports of imported devices for safety and efficacy. In addition to the medical device approvals, companies will also need to negotiate pricing terms with the Korean Health Insurance Review & Assessment Service (HIRA) and the National Health Insurance Corporation (NHIC). Current issues for medical device industry in Korea include reimbursement pricing and the healthcare technology assessment system for medical devices. The Commercial Section at the U.S. Embassy works closely with associations including AdvaMed and the American Chamber of Commerce in Korea to ensure U.S. interests are represented in the medical device industry.

After the March 15 implementation of the KORUS FTA, U.S. medical device and pharmaceutical companies will have the ability to voice their objection to pricing and maximum reimbursement conditions imposed on U.S. products through the Independent Review Process. Established to regulate medical devices and drug prices, this review process is independent of the Ministry of Health and Welfare (MHW), the National Health Insurance Corporation (NHIC), and the Health Insurance Review and Assessment Service (HIRAS).

Best Products/Services

Opportunities

Resources

Trade Shows
Korea International Medical, Clinical, Laboratories & Hospital Equipment Show 2013 - www.kimes.co.kr

Key Contacts
Ministry of Health and Welfare (MHW) - www.mw.go.kr

Korea Food & Drug Administration (KFDA) - www.kfda.go.kr

Health Insurance Review & Assessment Service (HIRA) - www.hira.or.kr

Local Contact

Ms. Yoon-Shil Chay
Senior Commercial Specialist
US Commercial Service Korea
US Embassy Seoul
188 Sejong-daero, Jongno-gu
Seoul 110-710 Korea
Tel: 82-2-397-4439
yoonshil.chay@trade.gov
http://www.export.gov/southkorea

Pollution Control Equipment (Return to Top)

ITA CODE: PR POL

Overview

	2010	2011 (Estimated)	2012 (Projected)	2013 (Projected)
Total Market Size	7,419	8,001	8,629	9,305
Total Local Production	9,325	10,286	11,359	12,561
Total Exports	2,648	3,085	3,594	4,186
Total Imports	742	800	863	931
Imports from the U.S.	223	240	259	279
Exchange Rate: 1 USD	1,100	1,100	1,100	1,100

Note: The above statistics are unofficial estimates by Commercial Service Korea based on the information published by the Ministry of Environment. Unit: USD million.

As Korea forges ahead with its economic stimulus campaign, the Government has signaled that environmental projects and the development of green technologies will be a key priority for job creation and a growth engine to recover in the current global downturn in the economy. In 2009, the South Korean Government announced its “Green New Deal”, intended to develop environmental projects to spur economic growth. With a fully industrialized economy and the growing needs of environmental protection, Korea continues to pursue green growth as one of national strategies to cope with the challenges ahead.

CS Korea estimates the size of the pollution control equipment industry at USD 8.0 billion in 2011. According to industry experts, imports account for about 10 percent of the total market. Japan has been the principal foreign suppler with about a 50 percent local market share, followed by the U.S. with about 30 percent market share, Germany and France.

Local environmental equipment manufacturers in Korea have supplied a major portion of environmental projects with medium-level technology and medium-cost products. While they have significantly improved their technical levels, mostly through technology transfer and mergers with non-Korean suppliers, they still lack the core technologies to supply the products that meet the government’s stringent regulatory requirements, and are seeking more advanced imported products and technologies. Because most Korean manufacturers target larger volume and export markets, highly customized solutions for specific applications like in-house recycling and ultra-pure water treatment offer potential for US exporters.

Sub-Sector Best Prospects

Opportunities

The Korean government plays a key role in the pollution control equipment industry, as both the regulator and also the biggest end-user in this category. Based on Ministry of Environment statistics, CS Korea estimates the yearly expenditure on environmental protection by the Korean government and Korean industry at about USD 10.7 billion and USD 6.3 billion respectively.

For government projects, tenders are announced on the Korean government procurement (PPS) website with detailed information on the project scope and contact information. Tender information is available from the PPS at http://www.pps.go.kr/english/. For more information on PPS, readers are encouraged to review the Selling to the Government section of Chapter three of this guide.

To enter the pollution control equipment market, we recommend that US suppliers partner with qualified and capable Korean companies who maintain their existing sales network to serve end-users, and are fully aware of regulatory changes that drive the market. Exhibiting at local environmental trade shows can be a good platform to explore the market as well as gain exposure to end-users.

The Korea-U.S. FTA will go into implementation on March 15, 2012. The U.S.’s first ever FTA with an Asian country and will provide that more than 95% of U.S. environmental goods exports to Korea, of which current tariffs average 5.8%, to receive duty-free treatment within 3 years. It will also establish a legal framework for U.S. investors to be treated equally as local investors.

Web Resources

Trade Shows

International Exhibition on Environmental Technologies (ENVEX 2012)
http://www.envex.or.kr/english/main/main.asp

Water Korea 2012 - http://www.wakoex.co.kr/main/index.asp

Key Contacts

Ministry of Environment - http://eng.me.go.kr/main.do

Public Procurement Service (PPS) - http://www.pps.go.kr/english/

Local Contact

Mr. Young Wan Park
Commercial Specialist
US Commercial Service Korea
US Embassy Seoul
188 Sejongdaero, Jongno-gu
Seoul 110-710 Korea
Tel: 82-2-397-4164
youngwan.park@trade.gov
http://www.export.gov/southkorea

Semiconductors (Return to Top)

ITA Code: N/A

Overview

	2010	2011	2012 (E)	2013 (E)
Total Market Size	35,118.04	36,909.58	38,619.56	39,466.84
Total Local Production	54,688.04	57,422.44	60,293.56	63,308.24
Total Exports	50,707.00	54,763.56	59,692.28	65,661.51
Total Imports	31,137.00	34,250.70	38,018.28	41,820.10
Imports from the U.S.	12,454.80	13,700.28	15,207.31	16,728.04
Exchange Rate : 1USD	1,120	1,106	1,100	1,100

Source: Korea Communications Commission (KCC), Korea Electronics Association (KEA), and Ministry of Knowledge, Economy (MKE); Unit: USD million.

The semiconductor market in Korea’s largest segment is chips for PCs (47 percent), followed by those for communication devices (23 percent) and for home appliances (16 percent). System semiconductors for vehicles represent eight percent of the worldwide semiconductor market and the 4th largest market segment in Korea. In 2011, the Korean semiconductor industry covered 64 percent of DRAM market share and 52 percent of market demand for NAND Flash. However, memory chips account for only 25 percent of the total market demand. Korea does not yet have the advanced technology for system semiconductors in certain areas, such as automobiles and high-end TVs. Major research companies predict that market growth in the system semiconductor segment will continue to increase for the next five years.

Sub-Sector Best Prospects

Automobile – Analogue semiconductors for automobiles
Logic semiconductors for automobiles
32bite Micro Controller Unit (MCU)
Tire Pressure Monitoring System (TPMS)

Digital TV – High Definition Multimedia Interface (HDMI)
Display port
Mobile Hi-definition Link (MHL)

Opportunities

An emerging area of opportunity is system semiconductors for automobiles and high-end TV. Worldwide semiconductor sales for automobiles grew from US$ 20 billion in 2009 to US$ 21.4 billion in 2010, representing a seven percent growth over this period. According to the Korea Institute for Advancement of Technology (KIAT), market demand for system semiconductors for Korean automobiles increased 16.8 percent, from USD1.25 billion to USD1.46 billion during the same period. As automobiles increasingly incorporate electronic controls, this segment is expected to grow. Market demand for system semiconductors for automobiles is almost entirely dependent on imports. Freescale Semiconductor (U.S.), Renesas Technology (Japan), and Infineon Technology (Germany) are the main suppliers in the Korean market.

Korean electronics manufacturers cover more than 35 percent of worldwide high end TV (Digital TV, Smart TV and other high-end flat screen TV) market demand. Korean market demand for digital TV system semiconductors, with the exception of LDI (LCD Drive Interface) for digital TV, is mainly supplied by MediaTek (Taiwan) and Broadcom (U.S.). The market demand for SoC (system on chip) semiconductors, which can perform at higher efficiency and resolution with a lower electricity consumption is increasing as 3D TV, Smart TV and High-end TV move into the mainstream consumer market.

Import Requirements

Korea is a party to the World Trade Organization Information Technology Agreement (ITA) and as such 92% of U.S. ICT products enjoy duty-free treatment. The remaining 8%, most of which currently face 8 percent tariffs in Korea, will enter Korea duty-free under the U.S.-Korea FTA. These include radio and television parts, certain static converters, and some telecommunications apparatus.

Semiconductors have been duty-free under the Information Technology Agreement since 1996. However, the next generation semiconductor chips, currently in development, may or may not be subject to duty. This issue is being handled at the Governments/ Authorities Meeting on Semiconductors (GAMS). Since 2000, GAMS has been an annual government-industry and government-government consultation between the World Semiconductor Council and the U.S., the European Union, Japan and Korea.

There is no regulation applied to semiconductor chips, per se. However, when the chips are utilized in electronic devices, the devices are subject to KC mark conformity assessment.

As the procedure is complicated, U.S. firms should consult with their Korean partners before exporting products containing chips to the Korean market. The guidelines for the KC mark can be found at http://rra.go.kr/eng/approval/process/about.jsp

Trade Shows

Korea Electronics Show - www.kes.org

Semicon Korea 2012 - www.semiconkorea.org

LED Korea 2012 - www.led-korea.org

World IT Show 2012 - http://www.worlditshow.co.kr/eng/index.php

Key Contacts

Ministry of Knowledge, Economy - http://www.mke.go.kr/language/eng/index.jsp

Korea Semiconductor Industry Association - https://www.ksia.or.kr/new/eng/main/

Korea Institute for Advancement of Technology- http://www.kiat.or.kr/site/main/index/index002.jsp

Korea Electronics Association - http://www.gokea.org/neweiak/eng/

Local Contact

Ms. Alex Choi
Commercial Specialist
US Commercial Service Korea
US Embassy Seoul
188, Sejong-daero, Chongno-gu
Seoul 110-710 Korea
Tel: 82-2-397-4466
alex.choi@trade.gov
http://www.export.gov/southkorea

Travel and Tourism (Return to Top)

SV TRA

Overview

	2010	2011	2012 (estimated)	2013 (estimated)
Outbound Travel	12,488,364	12,693,733	13,200,000	14,000,000
Outbound Travel to the U.S	1,100,000	1,160,000	1,240,000	1,300,000
Inbound Travel	8,797,658	9,794,796	11,000,000	12,300,000

Source: Korea Ministry of Culture and Tourism, tour.go.kr, Tourism Organization (KTO), U.S. Department of Commerce Office of Travel & Tourism Industries (USDOC, OTTI).

International travel is a rapidly growing leisure activity for Koreans and offers opportunities for continued service industry growth. International travel by Koreans has been spurred by rising disposable incomes, gradual increases in leisure time, heightened globalization, and greater awareness of developments outside the Korean peninsula. Korea's per capita GDP rose to almost USD 29,000 in 2011, placing it securely in the ranks of middle-income countries. Korean consumer confidence has also increased gradually, including a rise in discretionary spending for such activities as overseas travel for both business and leisure.

Continuing positive economic indicators coupled with Korea’s addition to the list of U.S. Visa Waiver Program in late 2008 and the recent U.S.-Korea Free Trade Agreement (FTA), expected to enter into force in 2012, should help spur even more leisure and business travel to the U.S. Currently, 22% of Korean travel to the U.S. is for business purposes. Korean mass media is influenced by U.S. movies, advertising, popular culture, and the Internet, which continue to stimulate Koreans' interest in U.S. travel destinations.

Koreans overwhelmingly choose the U.S. as their non-Asian long-haul destination because of the diversity of tourism opportunities not easily available in Asia including U.S.-style shopping, theme parks, cultural attractions in major U.S. cities, relatively inexpensive golf experiences, and the U.S.’s national parks.

Sub-Sector Best Prospects

Opportunities

The U.S. is the leading non-Asian destination for Koreans as it offers a variety of activities, climates, and cultural experiences. U.S.-bound Koreans account for 9.2 percent of Korea’s outbound market. Los Angeles, San Francisco, Las Vegas, and Seattle followed by the New York-Washington D.C corridor are the most popular destinations. Koreans use group tours or travel individually to visit friends and relatives. Group tours should focus on higher-class services that cater to the more sophisticated tastes of seasoned Korean travelers. U.S.-bound Koreans are interested in visiting museums, amusement parks, finding bargains at fashion outlets, purchasing OTC pharmaceuticals and vitamins, and U.S. cosmetics, playing golf, and visiting restaurants and wineries.

To cultivate this market travel and tourism entities should offer materials and guide experiences in Korean, maintain a part-time promotional office in Korea, and/or should visit Korean tour operators frequently. There are approximately 9,000 tour agents in Korea and promotional information on the U.S. is urgently needed for developing this market.

A partnership of Brand USA/Visit USA and Korea’s private sector travel and tourism entities will be launched in the Spring and Summer of 2012. Korea’s first USA Travel and Tourism Pavilion is being planned for 2013.

Web Resources

Major Events

January 13 – 15, 2012

Weddex Korea - http://www.weddex.com/html/weddexkorea/exhibit_intro.html

May 18 - 20, 2012

Hanatour Exhibition- http://www.hits2012.co.kr/

June 7 – 10, 2012

The 25th Korea World Travel Fair (KOTFA) - http://www.kotfa.co.kr/eng/main/main.htm

Key Contacts

Korea Tourism Organization http://kto.visitkorea.or.kr/enu/index.jsp

Min. of Culture, Sports & Tourism http://www.mcst.go.kr/english/index.jsp

Local Contact

Ms. Hae Lyong Kim
Commercial Specialist
U.S. Commercial Service Korea
U.S. Embassy Seoul
188 Sejongdaero, Jongno-gu
Seoul 110-710 Korea
82-2-397-4459
haelyong.kim@trade.gov
http://www.export.gov/southkorea

Agricultural Sectors (Return to Top)

For information on agricultural products including bulk commodities or processed foods and the distribution channels in Korea, please see the US Department of Agriculture (USDA) Exporter Guide 2011.

When considering the Korean market, US food exporters should conduct preliminary research to determine if the market is appropriate for the product. Possible sources of market information include Korean importers, US state departments of agriculture, the US Agricultural Trade Office in Seoul and the US Department of Commerce. Lists of Korean importers, by product, can be obtained from the US Agricultural Trade Office, or through the Foreign Agricultural Service in Washington, D.C. The next step might include sending catalogues, brochures, product samples, and price lists to prospective importers as a way of introducing the company and products.

Once contact is established, it is advisable to visit the importer(s) in person, which will increase the seller's credibility with the Korean importer and give an opportunity to see the Korean market first hand. In Korea the clichés about "seeing is believing" and "one visit is worth a 1,000 e-mails" are especially true. Especially in Korea, there is no substitute for face-to-face meetings. The supplier or exporter should bring samples as well as product and company brochures including price lists, shipping dates, available quantities, and any other information needed for negotiating a contract. While information in English is acceptable, having it in Korean is especially helpful. A general overview of the firm in Korean is a good place to start.

The Seoul Food 2012 Exhibition presents an excellent opportunity to explore possible market opportunities in Korea. This show is a trade only show and targets importers, wholesalers, distributors, retailers, hotels, restaurants, food processors, media, etc.

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