Overview Of The Korean Apparel Industry

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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.

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