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Aussie brands can now tap into lucrative Korean online market

Aussie brands can now tap into lucrative Korean online market article image

Australian businesses can now take advantage of a new reciprocal agreement that allows them to list niche products on a major online shopping platform in South Korea.

Hyundai’s HMall online shopping platform carries more than two million product lines and has relationships with more than 3,500 suppliers of quality products and global brands.

HMall is part of the Hyundai Department Store Group – one of the biggest retailers, home shopping and online businesses in South Korea.

Yes Shop, one of Australasia’s leading home shopping channels, reached agreement with the group to list Australian and New Zealand products on the HMall site.

Under the agreement, a special Australasian section will be set up on the site with a vast selection of home grown products listed with Korean translation.

Yes Shop is now in the process of sourcing products to include on the site.

The agreement creates an outstanding opportunity for Australian brands to enter the Korean market through an established online retail channel, without incurring significant up front marketing and inventory stocking costs, says Yes Shop director Paul Ding.

It comes hot on the heels of a recently signed Free Trade Agreement (FTA) between Australia and South Korea.

“Small and medium size businesses that may not ordinarily have the opportunity to export to a major shopping conglomerate like Hyundai, says Mr Ding. “And the Korean market can now sell their products safely and cost-effectively.”

Mr Ding says his company is not targeting big name brands, preferring to list boutique products that will appeal to the Korean market.

“Australian and New Zealand products enjoy a ‘clean, green’ image in Korea – this is our biggest selling point.”

Products in demand

Mr Ding says items weighing less than 5kg can be shipped from Australia and New Zealand directly to end-users in South Korea with no red tape hold-ups and free of tariffs.

Food, health and beauty brands from Australia and New Zealand are particularly sought after by Korean shoppers, he says.

“Korean companies have developed a sophisticated and fully integrated shopping experience. They have successfully integrated e-commerce with television and Internet marketing to make home shopping a part of everyday life,” he says.

“TV home shopping is a massive business in South Korea.

“Korea is now setting the global benchmark for innovative retailing strategies that minimise sales and marketing costs, while maximising retail opportunities for brands.”

With a population in excess of 50 million, South Korea boasts seven TV shopping channels.

Last year alone these channels generated more than US$20 billion in revenue.

And for the first time, e-commerce turnover in South Korea last year eclipsed total “bricks and mortar” retail sales.Korea2

Local online shopping market has a long way to go

“In New Zealand e-commerce represents about 15% of total retail spend,” Mr Ding says. 

And Australia has roughly the same percentage, according to recent estimates.

“So the online market still has a long way to go.”

NZ born, with Chinese parents, Mr Ding launched Yes Shop, a 24-hour TV shopping channel and online store, some two years ago.

And the venture continues to grow from strength to strength.

It is based largely on the Amazon model, offering a broad selection of products at highly competitive prices.

Like Hyundai Home Shopping’s channel, Yes Shop offers global brands and high-quality products.

It’s been so successful, Mr Ding is currently negotiating with networks to set up a similar home shopping channel in Australia.

“Hopefully that will happen before the end of the year,” he says.

“We are currently seeking producers and suppliers to provide product.”

Vast network of products and suppliers

YesShop in New Zealand (Sky Channel 23 and Freeview Channel 21) currently has access to more than 200 product suppliers. 

Under the new bi-lateral agreement signed earlier this year, Yes Shop clients in Australia and New Zealand will have access to HMall’s vast network of products and suppliers.

“Products can be ordered via our website in New Zealand and will be shipped from Korea directly to the doorstep of consumers in Australia and New Zealand,” says Mr Ding. 

Though it’s still early days, the new online deal has generated great interest on both sides of the Tasman.

“We’ve already had several enquiries from organic food producers and baby foods as well as health and well-being and cosmetics companies,” Mr Ding says.

It is free to list products on the new site, however, each product must first go through a careful screening and testing process to determine its suitability for the sophisticated Korean market.

Massive opportunity

“We ask companies to send samples of their products for assessment, Mr Ding says.

“Basically, if HMall like the product, they will list it. “But in many cases products have to be re-designed or re-packaged to suit the market ... this may involve re-labelling.” 

With the new arrangement Australian and New Zealand companies looking to export to South Korea no longer have to find a reliable distributor and can avoid the usual red tape and language barriers. 

And as an added bonus, HMall may select some products to feature on its home shopping channels.

“This presents a massive opportunity (for Australian and NZ companies),” says Mr Ding.

“If a product becomes popular on TV home shopping channels in Korea it can reach ‘rock star’ status very quickly,” he adds.

Mr Ding encouraged Australian businesses to take advantage of the opportunities the new shopping site presents.  

For more information or to enquire about listing your products, contact:

export@yesshop.co.nz

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