China overtaking South Korea in export market

Headquarters of Samsung Electronics, a giant based in Korea.

Quality set to outpace quantity, as well

With South Korean goods already losing their price competitiveness to Chinese products in global markets, concerns are growing that China may match South Korea in terms of quality and brand awareness after 10 years.

According to a survey of 10 heads of main trade offices at the Korea Trade Investment Promotion Agency (KOTRA), conducted by the Hankyoreh on July 25, the ‘Made-in-China’ brand will have a reputation and competitiveness that is comparable to the ‘Made-in-Korea’ brand after 10 years in almost all foreign markets. As for South American markets, China is even expected to surpass South Korea. The 10 trade office heads surveyed are based in New York, Toronto, Frankfurt, Warsaw, Shanghai, New Delhi, Moscow, Jakarta, Dubai, and Sao Paulo.

When it comes to the current value of the national brand, South Korea received 81.5 points on a 100-point scale, compared with the United States (92 points) and Japan (89.3 points). South Korea’s points were much higher than those of China, at 75 points. In terms of brand value after 10 years, the U.S. and Japan are expected to basically maintain their levels (92 points and 90 points, respectively). However, China, with a projected 86 points, is forecast to nearly catch up with South Korea’s 89.3-point outlook.

Of the ten surveyed KOTRA officials, only three - from New York, Jakarta, and Dubai - said South Korea’s national brand reputation will be better than that of China after 10 years. Park Dong-hyung, head of Sao Paulo trade office, said that "the brand values of South Korea and China are now 70 points and 60 points each, but China will eclipse South Korea with 80 to 85 points after 10 years."

Many trade officials pointed out that South Korea’s failure to create top brand awareness is one of the factors that darken the nation’s future export record. In advanced nations, South Korean goods have a reputation of affordable pricing and good quality, but such a reputation may make South Korean products undistinguishable to both the high- and low-income consumer markets.

Woo Je-ryang, head of the New York trade office, said that "in the case of big distribution channels such as Wal-Mart, they shun South Korean goods in seeking lower-price suppliers. And high-income buyers don’t recognize South Korean products as luxury brands. That’s the problem."

Poor customer service from South Korean companies was reported as a problem from the heads in Germany, Poland, India, and Indonesia.

There was a mixed response from KOTRA officials about South Korea’s global outlook after 10 years. Lack of foreign language proficiency, poor understanding of world markets, and lack of a talented workforce were picked as reasons for making it difficult for South Korea to become a globalized nation. Other factors named against South Korea’s globalization were strong labor organization, the divided Korean peninsula, economic polarization, and international unease about South Korea’s family-run industrial conglomerates.