Korea is known for its fast internet, rapid and near-complete adoption of new technology and high smartphone usage. Despite its modest market size (53 million inhabitants), Korea is one of the most attractive and potentially lucrative markets in Asia. Part of this is ease of entry. For example, we have found that Korea is a much easier prospect for expansion than navigating the extreme complexities of China or the ultra conservative nature of Japan. Its advanced, socio-economic position makes the nation a much more familiar market to many western companies and wide ranging FTAs open opportunities that may not be found in much of Southeast Asia.
But don’t be fooled! While Korea is an attractive prospect, many foreign brands have had a hard time here. The list includes Yahoo, WalMart, CarreFour, Groupon, Uber, and Lone Star. Even IKEA, Airbnb and Google have had their fair share of difficulties. Many of these brands have taken a ‘copy-paste’ approach to their Korean marketing, dramatically underestimating the uniqueness in approach that is needed to forge success.
I’m a Korean marketer who’s supported various types of companies with their entry into Korea. Here are five critical (but often ignored) factors that could help you power into the world’s most wired nation.
1. Know your market
Like any foreign market, Korea is unique in many ways. One of the first mistakes companies often make when planning their marketing strategy in Asia is that they see the regions as a single country, rather than a group of extremely diverse and unique nations. Even within Northeast Asia, the expectations and consumer behavior of Koreans are very different from their neighbors in China or Japan.
For example, Korean consumers are used to getting things for free. There are free samples everywhere, and ticket prices for most events are usually low. The nation’s top e-commerce player started as a daily deals site, like Groupon. But while Korean consumers are drawn to deals, this doesn’t mean Koreans don’t spend money. Koreans are quick to adopt new trends, including high priced products. FOMO (Fear of Missing Out) is a strong drive among Korean consumers. They also don’t want to be left behind, which means they are also quick to move on to new trends. As such, timing is crucial when entering the Korean market.
2. Know thine enemy
Competition can be tough. Especially when you are up against a home team that deeply understands the market and already has a loyal consumer base. Take K-beauty for example. The international popularity of Korean skincare and makeup is celebrated by Korean people. When American or European cosmetic companies try to enter the Korean market, like Benefit or Sephora, they are often met with obstacles. It is extremely difficult for foreign brands to survive when Koreans have so many cheaper, good quality local options.
This is why extensive market research is necessary in order to compete with local brands. If you don’t know your competition, you’re setting yourself up for failure even before the game begins.
3. Localization — do it right, or not at all
The importance of content localization is often ignored. And to be clear, translation is not the same as localization. Sure, localization starts with good translation, but don’t be that company that cuts corners on content localization just for the sake of adding a new language. If you don’t have the time or resources to do it well, it’s better just to leave it in English.
Far beyond accurate translations, foreign brands that succeed in Korea develop content that is relevant to Korean audiences. This means sensitivity to underlying cultural/political/historical context. From copywriting to design, to seemingly insignificant details such as font choice, your content needs to resonate with your target audience.
For example, using a certain font can drastically increase/decrease marketing impact and brand reputation. Also, understanding popular concepts like Agee-jagee (a particular Korean cute style) and Ajae-gag (dad jokes) can open doors for your marketing projects. I highly recommend having at least one reliable local partner check if content hits the mark, a local partner who is well-versed in Korean and international markets.
4. Relationship — not everything, but almost everything
In Korea establishing and maintaining strong business relationships is more than just ‘important’. Strong local relationships are essential for success. The foreign startups that have been most successful here spend a lot of time on the ground in the set up stage, fostering relationships before launch. That process could take months and is therefore a big investment, but it could feasibly mean the difference between success and failure. It’s obvious that being on the ground gives you insights you will never be able to get from afar.
Uber did not foster solid relationships in the right places, prior to launch. It disregarded the highly political nature of Korean taxi unions, local transport laws, and the Korean courts. The ballsy Silicon Valley upstart ultimately paid the price — getting itself banned from the country and their ex-CEO earmarked for arrest should he ever turn up. Good relationships on the ground are the only way to access a level of understanding deep enough to succeed in the market. So, book your ticket, mingle a bit and make some friends.
5. Find the right partner
If you want to succeed in Korea (or any other foreign market) you’ll need to dedicate considerable time on the ground yourself, but that may not be feasible in the long term. Foreign brands that have excelled in Korea spent much of that time finding a strong local partner — preferably native Korean. Working with local experts can help you navigate the local dynamics, business norms, and ensure you avoid costly mistakes.
How do you know if you’ve found the right partner? A portfolio of past [foreign] clients, along with proven success cases is a must. If you’re seeking a marketing partner, spend some time to research their online presence. If a marketing company isn’t good at doing marketing for themselves, it’s unlikely they’d be able to do a good job for your company. Also, you need to be ready to actively engage in the process rather than expecting them to do everything.
Got more questions about marketing in Korea? Feel free to contact me at email@example.com. I’m happy to provide some local insights, also actual support.