DEVELOPING AN INTERNATIONAL MARKETING PLAN FOR BAMBOO FURNITURE PRODUC TS TO ENTER THE KOREAN MARKET

MARKET SHARE OF FURNITURE BUSINESSES IN SOUTH KOREA...-- «... The market share of bamboo products 1s not hiph The cost has not been optim1zed, the price 1s sull hiph Marketing channel 1s

THE FINANCLAL UNIVERSITTY OF FINANCE & MARKETING

DEVELOPING AN INTERNATIONAL MARKETING

ENTER THE KOREAN MARKET

Majors: Marketing Specialized: Marketing Management

Class: CUC_20DMA09 Course code: 2221702031209

Instrutor: Master Đặng Huỳnh Phương

(Score 1n numbers) (Teacher signature)

MAJORS MARKETING

MASTER ĐẶNG HUỲNH PHƯƠNG 1

Executive Summary

Research the furmiture market, especially bamboo furmture Thĩs 1s one of the consumption

trends 1n the coming time, especlally im the Asla-Paclfic region, especlally Korea, a

potential market Thats why my team decided to do in-depth Korean market research to come up with a marketing plan After havIng data for research, the next step 1s to learn about Issues such as cuÏture, economy, socIety, etc of the land of kimmchi Then identify the

targef customers and dev1se the most reasonable marketing m1x sírategø1es possible to ensure

the achievement of the set goals

1H

2.1 REASONS WHY CHOOSE SOUTH KOREA - - 55 G5 n3 n9 HH HH 0 n0 000900 0500004500050007500425 004 5 2.2 RESEARCH ON WOODEN FURNITURE MARKET IN KOREA - - 57-55555522 n1 000900 03008500525 76 6 2.3 OVERVIEW OF THE DEVELOPMENT HISTORY OF SOUTH KOREA - - 25-5 Ă Ăn HH n1 n0 500925 r6 7 2.4 NATIONAL BUSINESS ENVIRONIMENT - -< 555 2 n3 n0 TH n0 0 00 0000 00500004500050007500425 004 8 2.4.1 PEOPLIE, - nọ HH HT HT HH TH TH HH TH HH TH TH TH TT TT HH HH HH kg 8 2.4.2 GOVERNMENT + nọ HH HH TH HT HH TH TH HT TH TH TH TH T100 110 71g 10 2.4.3 GEOGRAPHY OF SOUTH KOREA nh HH HH TH HH HH HH HH HH KH HH 14 2.4.4 ECONOMY SH HH HH Hà HT HH TH TH TH HH TH HT Tà TH TH TH T111 10 11107111 15 2.4.5 MARKET POTENTIAL AND SCALL/E - cành nàn HH HH HH HH HH HH kg 18 2.4.6 MEDIA & TECHNOLOGY Là HH HH TH HT HH HH HH HH HH KH HH kg 19 2.5 INDUSTRY COIMIPETITORS - 2552 25 2 50 0.2000 2000 1000 200009000050 00 0090005010 05000900005007250.0 20 2.5.1 MARKET SHARE OF FURNITURE BUSINESSES IN SOUTH KOREA «<< s< se 20 2.5.2 DIRECT COMPETITOR Sàn HT HT HH TH HH HH KH HH HH HH kg 21 2.5.3 INDIRECT COMPETTTORS Sàn HH HH TH HH HH HH KH HH He 22 2.6 POTENTIAL OF NEW BUSINESSES ENTERING THE INDUSTRY . .- «755552 n3 S956 0930009000300 2.” 22 2.7 SUPPLIER STRENGTH - 2 <5 c4 000 2000 200 1n 10000 0000040010020 00 0010005000 05 0090000500775 0 22 2.8 CUSTOMER STRENGTH 57c À5 n0 SH T0 1000000000000 00020000 0 010005.1005.0009000090025 0 23 2.9 RISKS AND THREATS FROM SUBSTITUTE PRODUCTS - - 5 5-5 25 2925 02 S090 0030605000900 05007 0.0 23 CHAPTER 3: ENTRY MODE SELECTION -cc- Sen nen nen nhe ngoc 24 CHAPTER 4: TARGET MARKET -L-Q HH HH HH nghe 26

4.1 SEGIMIENTATION «55-52 s9 n0 n0 00000004 05.50015004 1004.5005.20045.200500007500004 000900770 26

4.2 TARGETING

4.3 POSITIONING

CHAPTER 5: EXTERNAL ENVIRONMENT ISSUES 29

5.1 POLITICAL RISK - 555 2< <0 Hi nh nhọ tì 000 n9 0009 9 p0 0 008.0 pm 5.2 DIFFERENCE IN CULTURE

5.3 EXCHANGE RISK

5.4 LEGAL AND TAX ISSUES

CHAPTER 6: MARKETING STRAGETTY -22zczcz.eecczseeecsereerssreercszececrs 31

IV

6.1 PRODUCT -. - 555 c2 gi nh họ 0 0 0 ng 09 9 p0 00.0 ng 31

6.2 PRICING - 5-5-5500 000.1500910 05.50 4 004000005 5005.20050.100.000700010005.1005 009000050075 0 34 6.3 DISTRIBUTION - - 5-5 552 c2 99509030 0.2000.500 000 000000045 0040.100.0000 00.10005010 0500090007200775 0 36 6.4 MARKETING COMIMUNICATION < 5 5< <5 25 2 2 HH H0 T000 T00 0000 000900005010 05000900005007050.0 39 6.4.1 ADVERTISING ch HH HH HH HH HH HH To HH HH HH TH TH Họ TH HH Hà TH 39

LIST OEF TABLE AND FIGURE

PIcture l.l: Logo of As1an CTẠ[L - c2 1122112211 11111111 1111111 1111111101101 1111 gu 1 PIcture 2.1: Furmiture Revenuew 1n Korea from 2017 to 2025 - - 2c cccseẰ2 6 Plcture 2.2: Market s12 ÍOT€C8S - S.nS 1 2191111111111 111111111 11 H11 TH He 7

Picture 2.3: Korea's deveÏopmeIn( : c2: 121112211121 1121 1112111511811 1 1511811 k key 8 Picture 2.4: Korean ÍamiÌy 2c 1 2C 221121111211 121 1121111511151 10111111 8118k ke 8 Picture 2.5: Korean house đesign - L1 2c 121111211 1211121 1121115118111 15115111 9

Plcture 2.6: KOT€a1i I€8Ì - ĩc c1 1121321121111 11111111111111111 111111111 11 11 11 11 H111 1 Hy 9 Plcture 2.7: Korean walÏ-SÍT€€E S1 nh S91 111111111 11111 11111 11 11 HH He 10 Picture 2.8: OECD Mimisterial Conf€T€TCC 0 S2 SH TH HH HH HH Hới 13

Picture 2.9: The FDI mcentives offered by the South Korean Œovernment 13 Picture 2.10: Korea map 1m the worÏd - 222 1221122111231 121 1151121111515 11 1k1 erres 14 Picture 2.11: Korean phone usage rate based on population -.- 52c cccccscss- 19 Picture 2.12: Most-used soc1al media platforms 1n Korea . cccccc 25552 20

Plcture 2.13: Furniture Market share 11 KOT€8 - 32: 2 222112 21115111111 krrrei 20

Picture 4.1 Positioning Map 2 - L0 2C 2211121111211 1221 1511151151181 11 1H na 28

Plcture 5.L: FEurniture distributor 1n KOT€A St 12t S2v 232 122 111 tk Hới 37

Table 2.1: Value ofexports and Import(s by continent, country block and some maJor markets Im 5 months oŸ2022 and compared to 5 months of 2021 - 5

IV

CHAPTER 1: COMPANY OVERVIEW

1.1 Company introduction

Full name: Asian Craft Co.,LTD

Established: 11/04/2013 In HanoI

Aslan Craff 1s an enferprise speclalizing 1n

mnanufacturing, trading, and exporting high-

class handicrafs from Cao Lanh Stone,

Products Exporting products to Chma and

Pictire 1 1: Logo oƒ Asian Crdƒff 1.2 Vision & Mission

Guided by 1s ploneering aspiratlons as well as a sustainable Manufacture - Exporter -

Development strategy, Asian Craft has been strrving to become Vietnams and the reg1onsˆs

leading HandIicraft exporter business øroup, which aims to become a Group oŸ1nternational

sfature and standards A sian Craft's aspires to establish 1ts Vietnamese brand, demonsfrating

Vietnamese In(ellectual prominence and pride 1n the International arena

'With the Mission:

- For the market: To provide premium produc(s and services oŸ International standards that are original, hiphly creative and embedded with local identities In addiuion to 1ts outstanding quality, each product - servIce conftains a cultural messàe with a view to bes( cater for customersˆ lep1tImate needs

- For employees: To develop a professional, dynamic, creafive and humane working

environment, enabling hiph income and equal development opportfumles for all

employees

- For societfy: To harmon1ze the company s and socIetyˆs benefits; to make actIve contributlons to commumty-orIiented activities, and to demonstrate c1t1zens” sense

OfresponsIbilities and natIonal pride

Asian Craft's continousÌy 1mproves alÏ services to respond to the credibility and expectation

Of customer as welÏ as to build prestige 1n the market

1.3 Company Culture

Their handicraft products are not only ordinary dally life Iems but also ar(Istic works

represenfing the cul(ure of the naHon Aslan Craft has reached the pimmnacle of quality,

varle(y OŸ types, sophistHcatlon 1n each paffern, and sophIsticaflon 1n cach product to satIsfy

every cholce of customers They work on the credIbility and trust oŸ our cus(omers

1.4 Company Resource

Financial sources: Property (year)

- _ Cash and cash equrvalents: 16 billion VND

- _ Shor(-term recervables: VND I13 billion

- _ Inventory: 79 billion VND

- _ Other short(-term assets: VND 20 billion

- _ Fixed assets: 38 billion VND

- _ Investment real estate: 51 billion VND

- _ Long-term financial investment: 35 billion VND

Human resources: a team of experienced and skillful artisans 1s selected from

traditional craft villages In Vietnam, combined with professional design experts, takIng

people as the central factor im therr activitles construction and developmenI

Research and development

With the øidcline: Customers smile 1s our happiness Ôur company 1s constantly 1mproving techniques, production processes, and service to aim at the best product quality for cus(omers In order to maximize work efficlency and bring great vaÌue to customers client

Their handicraft products are not only ordimary dally liíe Items but also works of art representing the culture of the nation

Asian Craft has reached the pinnacle of quality: The varlety oŸtypes, the sophistication 1n each pattern, the subtlety In each product to satisfy every choIce ofcustomers We work

on the credibility and trus( oŸ our customers

Production process of productfs from bamboo knitting

e Step 1: Choose bamboo and rattan materials

Choose the best bamboo of Quang Phu - Quang Dien - Thua Thien Hue rattan and bamboo craft village, which 1s not young, not old, ørows straipht and has high hardness

To get the desired work, the artist must first understand the material he will make The best

type of bamboo must be the one that 1s not young, not old, straight growing, with high

hardness As for rattan, 1( 1s necessary to choose a type of sufficlent size, about 5m long, straipht, round, and free from pests Trees that are too old or too young are not øood

e Step 2: Prepare insredients

For bamboo materials: Bamboo 1s cut down and then dried again lí 1s then treated with

anfI-(ermite treatment There are fwo common ways to fight termites: 1 1s put 1n the XM5Š

chemical bath - an easy-to-use and very safe forest product preservatIve for users, Of 1 1s soaked mm water according to the traditional manual method

For rattan materials: Rattan has a lot of sharp thorns around, so the prelininary processing

OÝ rafian needs to be very careful The outer thorny shell will be peeled off, revealing the white rattan flesh 1inside Affer that, ratian 1s also dried sliphtly, to move to the mmflal processing stage

® S(ep 3: Matcrial handling

For bamboo materials: Bamboo 1s shaved, polished with sandpaper, then put m the oven, using s(raw or bamboo leaves to smoke, which has the effect of creating color, helping to dry the materlal, and helping to prevent warping After smelting, the bamboo wIll have a wesfermn brown or dark brown color When the bamboo 1s cooled, 1t w1ll be bent straIght

For rattan materials: Rattan 1s dried qui(e carefully, both to dry the material and to get the

color When dry1ng, 1ƒ there 1s too mụch smoke or too lifile smmoke, the clouds w1ll turn red

As for the dry1ng process, 1Ý 1t rains, the rattan fiber loses 1ts beauty, 1Ÿ 1t 1s exposed to the sun, the ratian fiber loses 1s freshness Ifthe cloud 1s not dry enough, the skim will be dull,

1F the cloud 1s too dry, 1t wIll lose 1(s soft shine Therefore, the process of drying rattan

requires a lot of effort from crafismen

« S(ep 4: Split yarn

To be able to weave rattan and bamboo, 1t needs to be split and spun The s1ze and length

of the yarn will depend on the specrfc type of product Usually, the large yarn will be used

to km the product, and the small yarn wi1ll be used to make more elaborate products The

ratian sphiting needs to be very af(entive because rafian fibers often have uneven nodes, so when splitting, 1t must be very skillful and skIlful so that the rattan fibers are even

The quality and aesthetIcs ofrattan-bamboo fIbers are ơne ofthe leading factors determiming

the value oŸ traditonal bamboo and rattan products

e _ Step 5: Constructfion and manufacturing of productfs

After the knitting 1s complete, the product will be dipped im glue, pain(ed In color, øÏlossed

over the surface, and trimmed to perfection

The materials, after being processed, w1ll be kmrt(ed and shaped by the talented and skillful

hands of artisans 1m the village to become beautiful and attractive products

Experienced In exporting because the company's exIsting products have been

exporied to Chma and ASEAN markets

DIversified product portfolio

Weakness

The product design stage 1s still limited because before the design 1s traditlonal, making I1tems that have been used In the past based on experIence, but have not yet approached or absorbed the requirements of the market world school

The market share of bamboo products 1s not hiph

The cost has not been optim1zed, the price 1s sull hiph

Marketing channel 1s not working effectively

Opportunity

The business field 1s being expanded, there are many opportunifIes for

development and success In the fuiture, especially the Korean market

Sfrong prowth In furniture market

The government always encourages businesses to develop, especially products with national culture

There are few competitors for this bamboo and rattan product

Challengse

Meet the rules oŸ origin and origIn procedures as well as labor and environmental commifments are quite complicated

Exchange rate risk due to selling products abroad

Shipping cosfs tend to Increase

Sfrong competition im Korean handicraft industry

CHAPTER 2: COUNTRY SELECTIVE

2.1 Reasons why choose South Korea

Table 2 1: Value 6ƒ exporfs dIHI imporfs Dỳy coHfÍH€HE, coHHff} block diHl some Hưjor markefs n5 monfhs oƒ 2022 and compared to Š monfhs oƒ 2021

Market Value Compare to | Proportion Value Compare to | Proportion

(Bilion USD) |_ 2021 (2) (%) (Bilion USD) | 2021 (2) (%)

(Sounrcce: (eneral Departinerf 0ƒ CHsforMS)

According to the General Department of Customs, 1t can be seen that most countries 1n Asia that have large import-export activiies with Vietnam such as China, ASEAN, Korea, efc., Import more than they export Equilibrium occurs only 1n Japan In contrast to Western

regions like the US or EU, we export more than we import Therefore, to be able to

balance between export and Import deficIt (not being assessed In short, 1t can be said that Korea 1s the perfect country for the new company to enter In addition to Important trade apreements sipned with Vietnam, according to a report from the Immigration Department

(Korea Immigration Service) under the Korean Mimstry of Justice on February L7, Vietnam has a number of forelgners standing 2 1n Korea with more than 200,000 people.

2.2 Research on wooden furniture marlket in Korea

According to a study from Statis(a, the Furniture sepgment revenue 1s expected to reach 9.66

billlon USD m 2022 Revenue 1s expecfted fo ørow at an annual rate (CCAGR 2022-2025)

was 4.94%, resulting im an expected market volume of US$11.16 billion by 2025 The average revenue per user (ARPU) 1s projected up to 617.90 US dollars Especially the living room and ki(chen area

Pictire 2.1: Furnitnre RevenHew im" Korea from 2017 ío 2025

Market Region : Ẫ !

Furniture South Korea : E5 :

REVENUE REVENUE CHANGE

® Floor Covering Kitchen Furniture

Ấ' Lamps & Lighting Living-Room & Dining-Room Furniture

® Other Furniture © Plastic & Other Furniture

Detailed market 1ntelligence report of the Global Bamboo Furniure Market applyrng the

best of each primmary and secondary analysis to consider the competitive landscape and also

the prominent players 1m the expected market w1ll dominate the global bamboo furmiure

mnarket for the forecast 2019- 2025

The global bamboo furniture market 1s valued at USD 10376.60 million mm 2018 and 1s expected to reach USD 14895.45 million by 2025 at a CAGR of 5.30% during the forecast period Bamboo 1s popular for 1s ability to Iimprove alrr quality The s1ze of the global bamboo furmiture market has been appreciated mm the last few years and 1(s value 1s expected

to Increase 1n the coming years Bamboo has made a great comeback with the modern design of floorimng, wallpaper and furniure, even expanding Immto modern bathroom accessorles These materlals are gaIning hiph traction 1m the commercial and residential sectors because of theirr lipht weight and durability and this makes 1t easler to move 1t around Some of the popular types of ftrniture used are bamboo planks, laminates as welÏ

as strips Bamboo stools currently hold the largest share of the market according to recent repor(s and this 1s due to the application of this product for both mndoor and outdoor

6

purposes Commercial buildings suụch as cafes, bars and outdoor restauran(s Increasingly prefer bamboo stools to create a contemporary look Due to mncreased demand, there has been Iincreased 1nvestment Im product Iinnovation as well as R&D All these factors are

drrving the overall growth of the global bamboo furmture market

Pictnre 2.2: ÁÍarkef size ƒorecasf

=~=: PessimisticForecast ~~=: OptimisticForecast === Revenue

Các kịch bản dự báo về quy mô thị trường (Lạc quan, Cơ sở và Bi quan) 2021-2027

Asia PacIfic has taken the largest share of the global bamboo furniture market recently and 1t 1s also expected to grow at a better rate Especially Korea, due to 1s culture and relatively

few maJor competitors, this w1Ïl be a potential market

2.3 Overview of the đevelopment history oŸ South Korea

“The land of Kim Chi” always surprises forelgn tour1sts with 1s unique culfure and art In this country, there are traditional arts that not everyone knows Among them, there 1s a long- developed art form called Pottery

Korean history oŸ the Goryeo - Goryeo period (918 - 1392)

In 918, Emperor Wang Gun founded the kinpdom of Goryo and took Song-ak (present-day Gaesong) as the capital The Goryo dynasty contnued to follow the Buddhist trend

Buddhism, the dominant religion at that time im Korea, 1ncreased the demand for celadon

(cheong]a) glazed porcelain, which made cheongJa gÏaze øgrow very quickly, with more

orgamc shapes and decorations , such as ammmal and bird motIfs

History öof Korea during the Joseon period (1392-1910)

Grandfather Lee Seong €ye was the founder of the Joseon dynasty, based on Confuclan thought Therefore, during this period many great people of Joseon And also during this time, Items such as wardrobes, chests, shelves, large and small tables, bookcases, cupboards

and Items for datly living appeared stronger Joseon socle(y only focused on academia, so

trade and productHon were overlooked, stagnant and unable to keep up with the changing

world

Republic of Korea (1945 — presenft)

Because the US occupied the southern half and the Soviet Ủnion controlled the north, after beiIng liberated In 1945, the Korean peninsula was divided m(o two South and North In

1948, the Government ofthe Republic of Korea was established, the only lepgal government recòrn1zed by the InternatIonal commumity, taking Seoul as the caprtal of Korea

Currently, Korea still preserves the old traditional beauty through the organizaton of exhibitions on handicraffs

Pictnre 2.3: Korea developimenf

Goryeo - Goryeo period the Joseon period Republic of Korea

South Korean culture 1s always orien(al, family lifc 1s respected and protected Humans live

very closely and have a close relationship w1th nature Their houses are built to '*access'"

to nature as mụuch as possible, such as: Houses are buIlt in open space; The maimm building

§

material 1s wood; Furniture uses limited plastic materials, Instead they wIll use wood, bamboo, knitting, cork, According to VIETTRADEs research, out of 3,018 respondents, 37.6% said they often buy all kinds of environmentally friendly products Among the types

Of siores, hypermarkets are where South Korean consumers offten go to buy eco-friendly

South Korean food culture

Food culture makes up the typIcal culture of South Korea South Koreans often s1t on the

floor to eat and on the South Korean table there are many dishes and are very eye-catching

Because of this habit, almost every family has a seat cushion made from bamboo and some other products in the house such as pot lining, table mats are also made from bamboo according to a cultural Iifesty le close to nature

Picfnre 2.6: Koredan meal

D — ”

2.4.1.2 Religion

In South Korea, relipions from Shamanmism to Buddhism, Confuclanism, Christianity, Islam all exist and live peacefully According to the 2015 census, 442% of the South

Korean population 1s relig1ous

Among them, Buddhism and Conficlamsm are the two roots of South Korean thoughit,

more than half of South Korea's monuments and cultural heritage are related to Buddhism

or Confuclanism

Just like mm Vietnam, most temples and pagodas In South Korea use wood and bamboo as

the mam building maferials and dally 1tems Therefore, 1t affects 44% of the religlous

population here

2.4.1.3 Population

According to The World Bank, im 2021 South Korea's population will reach 51,836,239

people, an increase of 71,417 people compared to the prevIous year's population

More than 50% of the Korean populatton lives Im the capital (Seoul) and major cIties

(Incheơn, GyeongøI) (According to The Korea Times citing data from the Korean statistical 1nformation agency July 1, 2020)

Picfnre 2.7: Korean wall-streef

Sfructure 0Ÿ local øovernment

Capital cifies and provinces under the central øgovernment

Currently, South Korea has 6 capital cies and l1 c1ty 1s the capital Seoul The standard of the capital city 1s that the population must reach l million or more, have a stronpÌy developed mndustry and service Industry Particularly for the capital, Seoul 1s a speclal capital city, the capttal of South Korea,

placed directy under the direction of the

Prime Mimister

Aufonomous counfies, counfies

and cities

Currently, Korea has 69 autonomous

districts, including 25 districts under the

capital city Seoul and 44 districts im other

capital c1tles

Thanks to the autonomous system of

countles, countles and citles, each pÌace

has different development character1stics,

creatIng a mche market for new businesses

to easlly enter and capture small market

About organizational apparatus and operating mechanism

Board of Audit and Inspection of Korea

National Intelligence Service

Korea Communications Commission

National Human Rights Commission of Korea

National Security Council National Unification Advisory Council National Economic Advisory Council

The National ÀAssembly of the Republic

of Korea 1s the unlcameral natonal

legislature of South Korea representIing

the opinion of the people All the laws of

the country are made by the NaHonal

Assembly

Presidential Advisory Council

on Science and Technology

The Natonal Assembly consists of 253

patrons 1m local constituencles and 47

patrons through proportional represenfatlon The latter 1s mean( as a

means to brimg people with specrfc

experfIse 1nto the guild

TH

[L Sffice fer Gevernment Policy Coordinaton LủT[

Ministry of Patriots and Veterans Affairs

Prime Minister*s Secretariat ]

Korea Fair Trade Commission

Ministry of Personnel Management Financial Services Commission

Ministry of Food and Drug Safety Nuclear Safety and Security Commission

Natonal |[ Korea | — MinistyofEconomy

Tax Service || Customs and Finance

Service Korea

MinistryofScenee _| - MinistryofHealth Korean Intellectual

TH n Property Office

Korea Disease Control and Prevention Agency

The Council oŸ State, commonly known

1mportant policles that fall under the

Korea Meteorological

Investment Agency Korea Coast Guard

South Korea strives to promote friendly relations and cooperation with other countries Às

of June 2020, South Korea maintains diplomatic relations with a total of 191 countries South Korea 1s committed to carryIng ou( active actIviies as a member oŸ diverse

12

International organizations such as UNESCO, IME, APEC, LAEA, ILO, WHO South Korea

became a member of the Umied Natlons 1n 1991 and Joimed the OECD 1m 1996 It has also

enøaged 1m various activItles as a member of the [ÓC since 1947

Pictire 2.8: QECD Mimisterial Conference

A HUMAN-CENTRED FUTURE

OECD Ministeriol Conference

Southeost Asio Regiondol Progromme,

Pictnre 2.9: The FDI incemfives oƒffered by the Sonth KoreqdH oVerIHH€IHf

Jul 2019 Jan 2020 Jut 2020 dan 2021 Jul 2021 dan 2022 dJut 2022

Most ofthe FDI immcentives offered by the South Korean ŒGovernment are provided throuph:

- Tax support (corporate and Income tax relief, acqu1sition tax and property tax relief, excluding customs dutIes)

13

- Cash allowance (land purchase cost, land rental cost, employment/ education/

2.4.3 Geopraphy of South Korea

Pictmnre 2.10: Korea map im the world

NORTH 40) 122

The Republic of Korea 1s located im East Asia, on the southern half ofthe Korean peninsula,

east of Asia The only country with a land border with South Korea 1s North Korea South Korea 1s mainly surrounded by sea and has 2,413 kilometers of coastline along three seas

There are 703% of South Korea's territory 1s mountainous, the rest 1s plam, accounting for

only 30%

14

Having three sides bordering the sea g1ves Korea a øreat oppor(umfy to ørow 1n seafood and marIne economy favorable for trade exchange by sea streets Many rivers and streams

as well as many large and small 1slands are the huge tourism potential ofthe land of kimnchi,

famous and talked about by the whole world, possibly JeJu Island

2.4.4 Economy

People often refer to Korea's economic miracle as the "Legend of the Han River", which confinues to this day South Korea's economy 1s the Šth largest im Asia after China, Japan, India, and Indonesia and ranks I4th 1n the world with GDP (PPP) In 2021 reaching 2.503

trllien USD In 2017 Korea was ranked 4th out of 190 countries according to the World Bank's Ease of Doing Business Index

Key economic sectors

Digital electromcs 1ndusfry; Information and telecommunmicatons Indusfry; SemIconductor

1ndustry; Automotive Industry; Steel mdustry; Shipburlding 1ndustry; Textile mndustry; Raw material spare par(s mmdustry

Economic indicators

Main export partners

(2019) Chma 25%, USA 14%, Vietnam 9%, Hong Kong 6%, Japan 5%

Main products (ExporfÐ)

(2019)

Integrated circuifs, automobiles and vehicle parts, refined

petroleum, ships, office machinery

Main products (Imporf)

(2019) Crude o1], integrated circuifs, natural gas, refined petroleum, coal

Gini Index - family income 35.5

đistribution (2017) Ỳ

Labor force (Million)

26,839 (2020) Ỷ

Foreign exchangøe reserves

458,700 (Bilion USD) (2021)

Income: Income:

Budget revenue and 3571 428.7

expenditure (Billion USD) Outcome: Outcome:

335,8 456,5 Exchangøe rate

Korean Won (KRW) per 1.119,80 1.189,90 1.084,65

US Dollar

Economic sectors: Shipbuilding, Electronics, Automotive, Mining, Construction, Defense,

Tourism

ECONOMIC RELA TIONSHIP WLTH VIETNAM

South Korea continues to consider Vietnam as an Important leading partner In Southeast Asia, an additional destination for the Chinese market, which has been saturated due to Vietnam's socIo-politIcal stability production costs are still relatively low, labor force and natural resources are abundant, a stable supply network has been established for the operation of enterpr1ses, taking advantage of the market

The Vietnam-Korea Free Trade Agreement (KVFTA) that came In(o force at the end of

2015 plays an Imporfant role im sirengthening and further expanding bilateral trade and

1nvestment relatlons, and at the same time enhancing Improving the effectiveness oŸ the legal ramework and Implementing trade policles, mmproving the process of economic

resructuring, especlally the business environment and compefiveness of the two

economies of Vietnam and Korea

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Currently, South Korea 1s the leading economic partner of Vietnam as 1( 1s the largest FDI

1nvesfor 1n Vietnam with the accumulated Investment capiíal by the end of February 2022 reaching more than 75 billion USD South Korea 1s also Vietnam's thirrd largest trading

partner after China and the United States In the opposite direction, Vietnam 1s the focus of South Koreas southward policy im the ASEAN region when the two countries' trade tumnover accoun(s for more than 40% of the total trade turnover between Korea and

ASEAN

Ác cording to the Ministry of Bảng 2- Về các dòng thuế Hàn Quốc xóa bỏ cho Việt Nam trong VKFTA!

Indusfry and Trade, In the fñrst two

monfhs of 2022, bilateral trade

turnover contnued to ørow

strongly when the totalimportand ! Nhóm tôm " ốc

- ngạch thuê quan)

¬ 5% Nhóm dệt may 24 dòng 60 triệu USD

South Korea reached 13.8 billion

3 Nhóm sản phẩm gỗ 64 21 triệu USD USD, up 19.03% compared to the

4 Nhóm hoa quả nhiệt đới 18 dòng 9 triệu USD

previlous year with the same

penod mm 2021 In which, (tươi, đóng hộp)

5ã Nhóm thủy sản (đông lạnh, 68 dòng 31 triệu USD

Vietnams expor( turnover to đóng hộp) gồm các mặt

s11< hàng cá, cua (trừ mực)

6 Nhóm tỏi, gừng (khô, đông 7 dòng Thuê NK hiện tại từ 27

Korea reached 10.1 billion USD,

up 20.3% Mộ Nhóm rau quả và nông sản 50 dòng 800.000 USD

§ Mật ong 1 dòng Thuế NK hiện tại 243%

9 Các hàng hóa khác (cà phê, Các dòng còn lại

hóa chất, thực phẩm chế

biến ) Tổng cộng 502? dòng 324 triệu USD

Nguôn: Bộ Tài chính

17

Important àreements siened

- - Aoreement on Technical and Economic Cooperation (February 1993) Investment

Quarantee Agreement (May 1993)

- Aøreementon Avoiding Double Taxation (May 1994) Cultural Agreement (August

1994)

- TarffCooperatlon Agreement (March 1995)

- _ Vietnam - Korea Free Trade Agreement VKFTA (May 2015)

2.4.5, Market potential and scale

The infrastructure

South Korean traffic 1s considered as a modern transportaHon system 1m the world's traffic

systems w1th a varlety of vehIcles Korea's strenpth 1s 1s transportation system, especIally road, arr and sea traffic The quality oŸ roads, bridges and tunnels here all ensure the best technmical standards

Road Traffic

The road transport system of South Korea 1s divided mmto two mai types: hiphways, national roads and many others ÀAccording to statistics, the total lenpth oŸ roads in South Korea 1s approximately 60,000km

Especlally m Korea, the 428 km long Seoul - Busan expressway helps bring people to all

reglons of the country 1m Jus( one day, connecting the two economic centers of the country The route has opened up concentrated economic proJects along the Seoul-Busan corridor, making Busan the buslest seaport and at the same time developing Seoul Into the economic

cenfer of the country The route also makes a big contributIon to Korea's export mdustry by

cuttng logIstIcs costs and transportation time, thereby reducing production costs

Waterway

The waterway system of Korea Includes 3 main types: ferrles, plers and por(s, and

commercial shipping Each vehicle w1ll have 1ts own strengths This 1s the world's largest shipbuilding 1mmdustry traffic road

With a favorable geographical postion connecting the oceans and continen(s, Korea's

arterial por(s can anchor laree tonnage 1mport and export con(ainer ships and optIm1ze efficiency of hiph-speed boat lanes The competitiveness of logistics 1nÍrastructire 1s measured by the capacrfy and speed of reipht

In particular, the port of Busan in South Korea 1s ranked Š5th In the world In terms oŸfreipht volume and 1s considered the main Important shipping route connecting the world and providing the best logIsfIcs services to the man cItles of Northeast Asia The port of Busan 1s one of the largest cargo ports 1n the world and also the largest port in Korea, accounting for 669% of Korea's total mmport and export volume

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Airline

There are 7 International airports in Korea Busan (Gimhae Atrrport), Cheongju, Daegu, Jeju, Muan, Seoul (Gimpo Arrport and Incheon International AirporÐ) The two main atrlines In Korea are Korean A1r and Aslana From Vietnam, 1{ 1s easy to travel to Korea by either Korean A1r or Vietnam Airlines

Incheon has maintained an averàe annual growth rate of 6% and has become the 2nd largest cargo atrport and 8th largest passenger airport 1n the world

l( is also qui(e easy to transport goods to Korea 1m the current era oŸ intepration These can

be mentioned as BestlogIstics' air freIpht service to Korea

2.4.6 Media & Technolòy

According to Hoofsuite's sfatIstics, Korea currently has nearly 40 million mobile phone subscribers out oŸ a tofal of 49 million people, so the percentage of people using mobile

phones 1s up to 78% More than 11 millhion South Koreans subscribe to 3G services, which allow telephony, movie and music downloads, and online sames Besides mobile phones, Koreans use most other new technologles More than 923% of homes have computers and South Korea 1s the world leader In hiph-speed Immternet with more than 80% of homes connected

In which, 97% of Koreans are Internet users, along with 45.79% of active soclal network

users, accounfing for 89.3% of the total population

Pictire 2.11: Korean phone nsage rafe based on popHlafion

VI l) INTERNET [3015313 POPULAION CONNECTIONS "3 VN 3

) @ @

DU VU, sa ốc lo vo Co 2 Vo

° vd,.-

Social

Ơn average, Korean c1t1zens spend 5 hours and 37 minutes on the 1n(ernet every day, with

2 hours and 51 minutes watching videos (broadcast and online) and I hour and 8 minutes

using soc1al networks

In South Korea, online video consumptlon has long surpassed traditional TV channels, with

more than half takrng place on mobile devices The study also found that 20 times less video

viewers may be more distracted from watching videos on therr phones than on television,

and are more 1nclined to look for produect 1nformation affer watching an ad videos on the

phone

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The Most Popular Social Networking Platforms in Korea

According to the Most-used Soclal Media Platforms ranking, Koreas most used social media platforms are Youtube, with 85.9%, followed by KakaoTalk (80.132), Instagram (57.5%), and Facebook (57.5%) 55.42

Pictmnre 2.12: Most-used social media pÏadfforims ím Korea

PERCENTAGE OF THAT HAS USED EACH PLATFORM IN THE PAST MONTH

2.5.1 Market share of furniture businesses in South Korea

Picfnre 2.13: FurHnitire Market share " Korea

Acebed

Hanssem IKEA Hyundai Liveart lloom Casamia Simmons

Jakomo

Enex Fursys Emons

According to a survey among South Korean consumers 1n February 2022, the most

preferred brand of furniture was Acebed with a 14.9 percent response share FollowIng were Hanssem and Swedish frniture brand IKEA, with 13.6 and 12.9 percent of respondents answering that way respectIvely

20