South Korea, which has a population of 52 million, is the fourth-largest economy in Asia and a growing market for EU exports. It represents the EU’s 9th largest export destination for goods, with total bilateral trade in goods reaching €107.3 billion in 2021 – up by over 70% from a decade earler.¹

The country’s story is quite remarkable, having transformed its economy over recent decades to emerge as technology leader and an important consumer market.

Between 1988 and 2022, South Korea’s GDP grew by an average of 4.9%. Perhaps more impressively, gross national income per capita rose from $67 in the early 1950s to $32,661 in 2022.²

This growth has turned the country into a strong consumer society – one that embraces overseas brands, sets trends for the region, and has capitalised on a high internet penetration rate to make online shopping the leading retail channel.³

It also has a strong cross-border e-commerce market. Annual growth was 12% between 2018 and 2022, and over half of consumers (52%) have bought online from overseas sellers.⁴ One of the reasons it’s so successful is down to economics – it’s often cheaper to buy from overseas sellers than it is from domestic ones.

Not only are consumers in South Korea very digitally engaged, they are also distinctly mobile first, with mobile platforms accounting for almost three quarters of the total ecommerce value.¹⁰

Almost all the population (97%) owns a smartphone, and South Koreans spend an average of 2.5 hours a day using them. They are also engaged in social networks, which are used to both explore products and make purchases, while influencers can have an important impact on their decision making.¹¹  

The mobile focus, combined with an established 5G network and a high internet penetration rate, means that e-commerce can be a great way to target consumers as almost all of them can be reached online.¹²

In fact, 97% of 20-39-year-olds say they shop online regularly, while mobile shopping is seen by many consumers as an entertaining way to pass the time with over 40% saying they use mobile shopping apps when they are bored.¹³

Consumers in the market are also very brand conscious, and will make purchases to show status.¹⁴ With that in mind, it’s perhaps unsurprising that the country is also one of the world’s leading markets for luxury goods.¹⁵

Trade between the EU and South Korea is concentrated in industrial sectors, which represented 95.9% of bilateral trade in 2021. The main categories include machinery and appliances (33.9%), transport equipment (18.9%), and chemicals (15.1%).¹⁶

The EU and South Korea are also collaborating on research and development in important areas. These include:

The EU and South Korea launched a digital partnership in June 2023 to strengthen cooperation and economic resilience. The main focus areas include semiconductors, high performance computing, artificial intelligence and cybersecurity.¹⁷

A Green Partnership was launched in May 2023 with the aim of strengthening bilateral cooperation and exchanging best practice. Priority areas include combating climate change, cooperation on environmental issues, and renewable energies, with the partnership also prioritising business cooperation and research & innovation.¹⁸

As the two parties strengthen ties and share knowledge in these areas, it’s possible that new opportunities could emerge for EU businesses – whether that’s through increased competitiveness, potential trade partnerships or simply on the back of overall growth and development in these sectors.

The EU and UK both have free trade agreements with South Korea, so it’s worth seeing how your business could take advantage. The EU-South Korea FTA eliminates duties on nearly all products and has removed barriers to exporting in key categories. Exporters also benefit from simplified paperwork and streamlined technical regulations, customs procedures and testing requirements. The UK’s FTA with South Korea was rolled over from the one it previously had as a member of the EU. Negotiations on an enhanced deal are ongoing. As with all destinations, it’s worth keeping an eye on the latest updates to international trade regulations to see how they could affect your business.

If you’re targeting South Korean consumers, it could be a good idea to base sales and promotions around key holiday dates. Many of these differ from Europe, and include Korean New Year, Children’s Day, Parents’ Day, and Chuseok – a three-day holiday in the autumn. Christmas is also a major buying holiday, while online consumers will also monitor overseas holidays such as Black Friday and Singles Day to get good deals.¹⁹

Cultural norms in South Korea can be different to those in Europe. For example, society can be hierarchical, there’s a strong emphasis on etiquette and gift-giving is common practice in the country’s culture.²⁰ These could all be relevant to how you conduct business in South Korea. Similarly, Korean is the official language and, while many people speak good English, it’s still preferable to translate your content into Korean and localise your marketing and website.²¹