Since the global financial crisis of 2008, the gap in global market share between Korea and Japan narrowed down significantly. Yet, it could widen anytime as Japanese companies became aggressive in seeking to boost exports late last year buoyed by a weak Japanese yen.
According to the report released on March 31 by the Institute for International Trade (IIT), an organization affiliated with the Korea International Trade Association (KITA), Korea’s share in global export markets went up modestly to 3.1% last year from around 2.7%, a level that had persisted until 2008. During the same period, Japan’s share shrank to 4.6% from 5.1%.
Japan’s market share remained strong at around 7.5% until the early 2000s, but after that, the percentage continued to slide. The gap in market share between Korea and Japan was as wide as nearly 5% in the past, but it narrowed down to 1.5% points last year.
Korean products’ market share in the U.S., the world’s biggest importer, rose to 2.6% last year, from 2.3% in 2008. During the same period, Japanese products’ share shrank to 6.4% from 6.6%. Korean products’ share in the second biggest market, China, slid 0.7% points while that of Japanese products tumbled by more than 3.5% points.
According to the IIT’s analysis, Korean products’ share in key markets such as the U.S. and China has risen since 2008 as they have become more competitive compared to the Japanese ones. Price competitiveness as a result of a strong yen and a weak won, aggressive marketing push by Korean firms, their technological developments, and enhanced brand image all have played a role in boosting exports. Since late last year, however, Japanese firms have been fighting back, helped in part by depreciation of the yen, which has been pushed at a central government level, thus making the situation difficult.
One IIT official said, “As the yen continues to weaken, Japanese firms’ profitability has been improving and they are beefing up efforts to keep Korean firms in line through massive facility investments,” and then added, “we also have to make every effort to beat out Chinese firms, which are making aggressive push to catch up with Korean firms in areas in which they are enhancing competitiveness such as textile, cell phones, and semiconductor.”