THE KOREAN MARKET

Potential market

(posted on 23/02/2016)

South Korea

This country is unusual in that it has been both a beneficiary of and a contributor to OECD aid. Today, the South Korean peninsula is prospering as a result of its export-based economic model.

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The Republic of Korea is the most mountainous country in the world, with mountains accounting for 75% of its land mass. However 83% of the population lives in towns and cities, with more than 20 million people in the Seoul region.

This far-eastern “Land of the Morning Calm” is at the heart of Asia’s economic, cultural and artistic activities. It is one of the most connected countries in the world, with 83% of its population online and almost 30 million smartphone users.

While only 3% of the population describes itself as Confucian, the Koreans remain attached to Confucian beliefs and values. As a result, their way of life is a blend of tradition and modernity.

With a GDP of US$ 1411 billion in 2014, South Korea ranks as the 13th global economy. Its status as a developed country was confirmed in 2010 by its accession to the G20, after joining the OECD back in 1996.

South Korea experienced spectacular growth between 1970 and 1980, and has continued to achieve an average annual growth of 4% over the past decade.

Global leader in new technologies

The top OECD country in terms of R&D (4.5% of GDP), Korea provides a unique perspective on the information and communication technologies sector. In less than 20 years it has become a global leader, with almost 50% of the liquid crystal screens market and around 33% of mobile telephony.

South Korean groups are increasingly winning major international contracts, especially in infrastructure (transport and energy) and engineering. South Korea is also the world’s fifth largest vehicle manufacturer.

Korean exports grew by 2.4% (US$ 573 billion) in 2014, notably as a result of exports in the FMCG, construction equipment, semi-conductor and shipping sectors to other European Union and ASEAN destinations.

In Korea, 3 major sectors account for over 50% of exports: electrical and electronic equipment (24% of the total), sales of transportation equipment (20%) and sales of machinery, which have shown an 11% increase, making them the biggest contributor to export growth.

The main buyer countries are China (25% of Korean exports), the ASEAN area (15%), the USA (12%), the EU (9%) and Japan (6%). France buys almost US$ 5 billion worth of Korean goods and services (1% of exports). This consolidates South Korea’s position as the world’s 7th export power with a trade surplus of US$ 48 billion.

In 2014, the country’s imports were also up by 2%, to US$ 525 billion. The key sectors here are hydrocarbons (37%), electrical and electronic components (14%), petrochemicals (10%), construction equipment (9%) and metal and metallurgical goods (9%). The EU is Korea’s 2nd largest supplier, just behind China and ahead of Japan.

Sources: Korea International Trade Association, Trade Department of the French Embassy in Korea.