Direct Overseas Sales
As the market size of overseas direct purchases has surpassed 1 trillion won (US$941 million) a year, the industry points out it is a time for Korea to target the direct “reverse purchasing” market so that Korean distribution industry can capture the competitiveness in the air and marine combined transportation system, and Korean products can be directly sold to consumers in foreign countries.
Direct overseas reverse purchasing means that consumers in foreign countries purchase Korean products directly from Korean shopping malls. From the perspective of Korea, direct purchasing from foreign countries is imports, and direct overseas reverse purchasing is exports.
The Korea Chamber of Commerce and Industry (KCCI) commented in the report Trend Changes in Distribution Industry and Responding Strategies on Oct. 1, “Korean local distribution industry is already saturated due to intense competition. In order to overcome stagnation in growth, the industry needs to seize an opportunity for new growth momentum out of the 1 trillion overseas direct reverse purchasing market.”
According to the Korea Customs Service, there were 11.16 million cases of direct purchasing from foreign countries last year, and the total amount was 1.129 trillion won (US$1.062 billion), a historical high. This year’s figures as of August are expected to surpass that of last year, with 988 cases and over 1 trillion won.
The KCCI emphasized responding preemptively to dominate the direct overseas reverse purchasing market, in particular targeting China and Southeast Asia. Last year, the size of China’s direct overseas purchases was US$35.2 billion, 35 times greater than that of Korea. This number is expected to grow over four times to US$120 billion by 2018.
The KCCI projected, “Due to the effects of Hallyu, the demand for direct overseas purchasing of Korean products is constantly increasing. Chinese especially prefer Korean cosmetics and baby food, and Korea is geographically close to China. The market of direct sales to China will keep growing.”
The Korea Chamber of Commerce and Industry added, “Korea needs to be prepared for a competition with Chinese distribution companies such as S.F. Express and ZTO Express, which started overseas delivery and purchasing services.”