With the new Free Trade Agreement between the European Union and South Korea, this country turn into a big opportunity to the wine producers. The Free Trade Agrement started last 11 July. We must remember that South Korea has the world’s 14th largest economy.

Unlike China or USA South Korea is firmly fixated on imported still wines, rather than its own domestic products. And unlike other East-Asian markets, where French wines generally dominate, the 11+ million South Koreans (Wine Calibration Study 2010) who drink imported wines have welcomed Chilean wine as their number 1 imported grape-based wine in terms of overall volume (IWSR 2010) – a trend which can in part be attributed to a long-standing free trade agreement.

Back in 1999 French wine dominated South Korea’s burgeoning imported wine market with 46% of trade volume. Rival Chilean producers had a mere 2%. However in 2008 more than 6,610 tons of Chilean wine was imported by Korea, followed by 5,454 tons of French wine, 4,785 tons of Spanish wine, 3,939 tons of American wine and 3,506 tons of Italian wine, according to Korean government figures.

An increasingly Westernised diet and drinking culture, rising incomes among middle and upper classes have all contributed to wine consumption growth in Korea. As Japan or Thailand media reports on the health benefits of red wine have shifted Korean customers’ preferences from white to red wine.

In the Korean market white wine was more popular than red wine until 1993. The low alcohol content of wine compared to local and imported spirits, along with the enjoyable scent and taste, is appealing to a younger generation, particularly women. In 2007 still wines accounted for 80.5 percent of sales, sparkling wines a further 16.5 percent and fortified wines the rest. Within the still wine category, red wine made up 81 percent of sales.

There is a new fashion between the new society: At Lunar New Year (early February), Korean Thanksgiving (mid-September) and Christmas Wine has become one of the most popular gifts because it is perceived as an upmarket, sophisticated, and elegant gift. One example of the important that wine becomes in South Korea is the new Mobile Sommelier service that second largest wireless provider will launch, enabling mobile users to retrieve information about the wine they are drinking, by reading the label with their camera phone.

South Korean wine

The domestic wine industry in South Korea is not well developed and is carried out on a very small scale at present. Specifically, high quality wine making is difficult due to the weather conditions – the summers are too humid and wet for grapes to ripen properly.

Distribution Channels

There are currently more than 300 Korean companies importing wine into Korea and among them around 80 companies import regularly. These companies handle mainly European brands as Korean consumers like prestigious products and associate higher quality with well known European brands.

Hotels and restaurants are the most important sales channel for wine. However department stores, discount stores and wine shops are changing this and they try to be the major distribution channels. Some convenience stores and supermarkets also sell low-priced imported wine.

Importers mark up 30-50 percent depending on the distribution channel. Typical retailers mark up 8-20 percent (discount stores), 30-40 percent (department stores, wine shops, supermarkets), 100 percent or more (restaurants), 150 percent or more (hotel restaurants).

Tactical Recommendations on Market Entry

Local representation is essential in the Korean market and it is recommended that Spanish wineries appoint an agent or importer to handle distribution.

Participation in a wine exhibition is a cost-effective way of initial market entry. The leading one is Seoul International Wines & Spirits Expo.

Exportar. Importar. Mercado del vino en Japon.
Export – Import. Three mayor reason to export wine into South Korea.
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Export. Import. Wine Market Thailand. Market Sector Structure
Export. Japan Wine market

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