"Exports to China Must Shift from Manufacturing Intermediate Goods to Consumer Goods"

"Emphasizing the Need to Participate in Guochao Marketing"

[Asia Economy Reporter Jin-ho Kim] It has been pointed out that in order to break away from South Korea's export structure to China, which is heavily focused on manufacturing intermediate goods, a strategy for entering the consumer goods market reflecting trends such as patriotic consumption is necessary.

The Korea International Trade Association's International Trade and Commerce Research Institute stated this in its report titled "China's Guochao (Patriotic Consumption) Craze and Response Strategies for Our Consumer Goods Companies," published on the 28th.

According to the report, fueled by the patriotic consumption (Guochao) craze, China's consumer market grew by 12.5% year-on-year last year, effectively overcoming the COVID-19 crisis. As the Chinese consumer goods market expanded, South Korea's consumer goods exports also reached a record high of $8.81 billion last year.

However, the report pointed out the limitation that over the past decade, manufacturing intermediate goods accounted for nearly 80% of South Korea's exports to China, while consumer goods remained at only 3-5%.

According to the report, 'Guochao (??潮),' created by the increase in Chinese income and consumption, the qualitative growth of Chinese companies, and the patriotic tendencies of the MZ generation, has established itself as a unique market trend in China beyond a temporary fad.

In fact, many Chinese consumer goods companies owning Guochao brands have shown growth. Among the top 20 companies in the Chinese cosmetics market, the number of Chinese companies increased from 6 in 2017 to 8 in 2020.

Specifically, companies like Yishion and Zhejiang Eger ranked 69th and 70th in market share in 2018, but jumped to 19th and 30th in 2020, respectively. In the apparel industry, companies such as Li-Ning and Anta recorded growth rates of 44.2% and 73.8% in 2021 based on excellent quality. Global brands like L'Or?al, Est?e Lauder, Shiseido, and Skechers are also participating in Guochao marketing, intensifying their efforts to target the Chinese market.

Senior Researcher Byeon Myeong-seon of the Trade Association said, "To expand consumer goods exports, strategies such as developing products that meet trends like Guochao and consumer expectations, entering the premium market, and actively expanding into regional cities are necessary."

This content was produced with the assistance of AI translation services.