Essay Color Key

Free Essays
Unrated Essays
Better Essays
Stronger Essays
Powerful Essays
Term Papers
Research Papers




Overview Of The Korean Apparel Industry

Rate This Paper:

Length: 1545 words (4.4 double-spaced pages)
Rating: Red (FREE)      
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Overview of the Korean Apparel Industry

SUMMARY

Korea's apparel industry has shown steady growth over the past few years with the rapid embrace by its consumers of foreign fashions, an increasingly wider variety of apparel in the marketplace and evolving industry marketing channels. The emergence of new distribution networks for apparel has occurred in tandem with changing consumer tastes and purchasing patterns, most notably through E-commerce, TV home shopping, fashion outlets, and discount stores, which for the most part, weren't in existence before the 1997-98 economic crisis. These new channels now account for 40% of all apparel sold in Korea, while traditional channels, such as department and chain stores, comprise the remaining 60%. It is expected that these relatively new marketing options for apparel companies will become even more important in the near future, as Korean firms strive to meet their consumers' increasingly demanding preferences for a wider variety of purchasing options. At the same time, a more diverse selection of apparel has become available for consumers, especially with the larger number of Korean firms offering imported fashions. As a result, more and more Korean consumers have been switching from domestic apparel to foreign brands, while they also have shown greater interest in foreign-labeled apparel that is produced locally. In 2002, the total market size of this industry was USD 15.9 billion, up 5.5% over 2001, and it is forecast to grow by 3%, to USD 16.4 billion, in 2003. END SUMMARY

MARKET ASSESSMENT

A. Apparel Market Profile

In 1975, a "ready-to-wear" Korean clothing industry first developed, providing momentum for Korea's emerging domestic fashion/apparel industry. With the increase in Korea's GNP by the 1980's, and more women entering the workforce, this industry had developed into one which had begun to offer its customers increased choice in styles and fashions. By the mid-90's, the apparel sector had become firmly established as one of Korea's most important, with over 15% growth per year, and sales reaching USD 15 billion by 1996. However, with the onset of Korea's economic troubles in 1997-98, apparel registered a sharp decline in activity as consumer spending for clothes fell, and, as a result, many local firms went out of business. During these challenging two years, most Korean fashion companies once again redirected much of marketing focus on the middle-priced markets. However, within the last five years, the Korean fashion industry has largely recovered, and sales, especially of imported high-end luxury apparel are again spiking upward.

Since the last 1990s, competition from leading foreign brand apparel makers has been intensifying, prompting Korea's apparel firms to further modernize and to expand their selection. Accordingly, most domestic manufacturers have been diversifying their product lines; the country's distribution structure has started to change and distinct "fashion centers", including the Kangnam and Apkujung areas in Seoul, have became established. In addition, Korea's domestic manufacturers have been devoting increasing attention to customer service, by offering better sales options, enhanced product quality, and more choice in fashions. At the same time, the low-end markets have also evolved with increased imports of relatively lower cost apparel, mostly from China, which in turn has contributed to the development of a network discount distribution retailers, offering this apparel.
INTRODUCTION
Korea's major consumers of new apparel have become younger, with their average age ranging from the 30s to the 40s, while the number of its professionals also has grown. In addition, increasing numbers of Korean women have joined the work force. As a result, the average spending per person on apparel goods in 2002 has gone up 8.2% since 2001, to USD 226 per year. As depicted in the following table, the Korean apparel market has registered generally strong growth across its various sectors.

Table 1: Korea's Apparel Market by Sector

(Unit: Million US Dollars)
Item 1999 2000 2001 2002
Men's Wear 2,692 2,927 2,762 3,492
Women's wear 3,906 4,248 4,254 5,263
Kids/Teens 1,385 1,215 1,145 1,271
Babies Garment 243 286 263 290
Under Garments N/A 735 750 899
Total 8,226 9,411 9,174 11,215
Exchange Rate (Won/USD) 1,190 1,261 1,291 1,150
Source: Textile Times, Korea Fashion Association
A. Men's Apparel

Demand for important apparel is up sharply with the increasing number of affluent consumers in their prime spending years combined with Koreans' heightened exposure to foreign fashion trends. Korean men are becoming increasingly fashion conscious in both their leisure and professional apparel needs, spurring a sharp increase in demand for imported casual wear. Foreign brands, such as Polo, Lacoste, Henry Cotton, and Lyle & Scott, are in particularly strong demand by Korean male consumers in their 20s and 30s, given the desire by many members of this younger generation to differentiate themselves from their older peers, as well as from among themselves. This growing interest in foreign fashions has resulted in this market segment alone, comprising about 40% of the total apparel market in 2003.

According to the Korean Federation of Textile Industries, its men's business suit market in 2002 increased by 12.6% in 2002 over 2001, since most Korean men still wear formal business attire in the office. At the same time, while these consumers are showing a greater interest in foreign brands, foreign suppliers have been challenged to produce clothing tailored to fit Koreans' body sizes and also to stay current on the rapidly changing Korean market. As a result, many foreign firms have been licensing Korean companies to produce their apparel locally. For instance, Kolon Fashion, one of the largest fashion companies in Korea, has signed a license agreement with Christian Lacroix, a brand of LVMH, to launch its men's suit line starting next spring. It reports that the Christian Lacroix in Korea will keep its original apparel brand name and styles while, at the same time, localizing for Korean market needs. Kolon also plans to import goods from Christian Lacroix as well.
B. Women's Apparel

During the past couple of years, as their tastes have evolved, many Korean working women have shown a declining interest in formal attire in the office, with their preferences shifting toward to less formal, casual or even unisex wear while at work. This trend is depicted in statistics published by the Korea Fashion Association, which indicate a decline in the women's business suit market from 20% of the total market in 1999 to 15.5% in 2002. The changing preferences have led a number of domestic fashion companies, including Cheil Industries, a subsidiary of Samsung, LG fashion, and FnC Kolon, a subsidiary of Kolon Group, to redirect their marketing efforts toward more luxurious casual women's wear. For example, FnC Kolon has launched its Marc Jacobs line early this year, while its sister company, Kolon Fashion, is planning on launching a family brand in 2004.
C. Infants and Kids' Apparel

This market segment has been growing substantially recently, as producers realize the rising profit potential of this new consumer group. With the rising numbers of Korean parents which have elected to have just one child per family, many of them have become more willing to lavish particular attention on their only child, including pampering them with high-end apparel. At the same time, large outlet malls offering "one stop shopping" for infants and younger kids needs have opened up, including the Korean retail companies "Mom's Mom" and "Our Kids Mall." "Mom's Mom" provides one stop shopping for most kids' needs, ranging from books to apparel, and even food, while "Our Kids Mall" goes even further by also offering playgrounds, an education center, culture centers, food courts, and even pediatricians on site.

Korea's luxury infant and kids apparel market has expanded. For example, Gianfranco Ferre, Petit Bateau, Simonetta, Rooksfield, Pom Dapi, Baby Botte, and others have been launched in many of Seoul's more upscale neighborhoods. These shops are offering their `luxury and sophisticated' apparel concepts to higher income parents of working professionals, and most of their garments sell for about USD 165 to USD 250 each.

On the opposite end of price spectrum, mid to low priced goods also are increasingly being offered through various distribution channels, including discount stores, TV home shopping networks, as well as on-line shopping malls. Korean companies, such as Intercrew Kids, Panic, Michiko London Kids, Snoopy, and TwinKids, dominate this market, and these companies also have shown the most sales growth during the past year. For instance, in 1995, Intercrew Kids opened its first outlet in department stores. Since then, this company has faced some difficulties due to the financial crisis in 1997 - 1998 and higher department store space rental fees. It therefore shifted its changed its marketing activities away from the major department stores, toward the lower cost discount stores, and it has been able to offer its apparel at an average 30 to 40% off of prices charged at the major department stores. It also has begun to franchise its own brand, and within the last year, it has opened 80 outlets nationwide. In the near future, Intercrew Kids also is planning to open additional branches within other discount stores, including Tesco/Samsung Homeplus and Lotte Mart.

At the major department stores, licensed foreign brands, including Catimini, Guess Kids, and Levi's Kids, have gained rapid consumer acceptance, usually within a year of launching, mostly because of their strong brand awareness among Korean consumers. For example, Levi's Kids has opened up in seven locations in Korea in the last year, and it already operates the largest number of "branded" apparel shops in Korea. Its locations report averaging about USD 1,250 in sales per day (about USD 2,500 per day during the weekends). Levi's Kids plans to open free-standing shops, starting this fall, and hopes to operate about 20 to 25 stores this year, generating about USD 8.3 million per year.

How to Cite this Page

MLA Citation:
"Overview Of The Korean Apparel Industry." 123HelpMe.com. 20 Oct 2014
    <http://www.123HelpMe.com/view.asp?id=166785>.








Important Note: If you'd like to save a copy of the paper on your computer, you can COPY and PASTE it into your word processor. Please, follow these steps to do that in Windows:

1. Select the text of the paper with the mouse and press Ctrl+C.
2. Open your word processor and press Ctrl+V.

Company's Liability

123HelpMe.com (the "Web Site") is produced by the "Company". The contents of this Web Site, such as text, graphics, images, audio, video and all other material ("Material"), are protected by copyright under both United States and foreign laws. The Company makes no representations about the accuracy, reliability, completeness, or timeliness of the Material or about the results to be obtained from using the Material. You expressly agree that any use of the Material is entirely at your own risk. Most of the Material on the Web Site is provided and maintained by third parties. This third party Material may not be screened by the Company prior to its inclusion on the Web Site. You expressly agree that the Company is not liable or responsible for any defamatory, offensive, or illegal conduct of other subscribers or third parties.

The Materials are provided on an as-is basis without warranty express or implied. The Company and its suppliers and affiliates disclaim all warranties, including the warranty of non-infringement of proprietary or third party rights, and the warranty of fitness for a particular purpose. The Company and its suppliers make no warranties as to the accuracy, reliability, completeness, or timeliness of the material, services, text, graphics and links.

For a complete statement of the Terms of Service, please see our website. By obtaining these materials you agree to abide by the terms herein, by our Terms of Service as posted on the website and any and all alterations, revisions and amendments thereto.



Return to 123HelpMe.com

Copyright © 2000-2014 123HelpMe.com. All rights reserved. Terms of Service