Domestic Market Growth Slows Down
South Korean multilevel marketers such as Atomy and Gcoop are focusing on overseas markets with the domestic market remaining stagnant. According to the Korea Fair Trade Commission, domestic market growth has slowed down rapidly since 2016 although it reached 5,220.8 billion won with a year-on-year growth of 3.7 percent last year.
Atomy, which is currently the second-largest in the domestic market, has penetrated overseas markets very successfully since 2010. At present, it has local subsidiaries in 13 countries, including the United States, Japan, Canada, Taiwan, Singapore, Cambodia, the Philippines, Malaysia, Mexico, Thailand and Indonesia, and is planning to enter Vietnam, China, Hong Kong, India, Turkey, Germany, Britain, Italy, South Africa, Kazakhstan, Kyrgyzstan, Colombia and Brazil.
The main office of Atomy China is located in Yantai. Last year, China became the largest multilevel marketing market in the world by beating the United States. According to the World Federation of Direct Selling Association, the sizes of the Chinese and U.S. markets were approximately US$35.73 billion and approximately US$35.35 billion in 2018, respectively. The Chinese multilevel marketing market’s three-year average annual growth amounts to 12.9 percent.
Gcoop, in the meantime, obtained a multilevel marketing license in Vietnam in November last year to become the first South Korean multilevel marketer in Vietnam. The company established in 2015 entered the U.S. and Taiwanese markets in 2017 and enters the Japanese market this month. In 2018, Gcoop’s sales totaled 84.3 billion won, up 74 percent from a year earlier, and it ranked ninth among the 130 network marketing companies in South Korea.
Although many South Korean multilevel marketers are turning their eyes to overseas markets, those are not easy to penetrate, and this is because of sales above all things. Those markets are already led by larger global players and competition is impossible without a sufficient investment. It is said that the minimum initial investment required for local corporation and supply network establishment is 20 billion won to 30 billion won and it is equivalent to at least 70 billion won in annual sales. At present, most South Korean multilevel marketers’ annual sales stand at less than 10 billion won.