INVESTMENT OPPORTUNITIES IN KOREA FASHION &...

FASH

ION

& B

EAU

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FASHION & BEAUTY

INVESTMENT OPPORTUNITIESIN KOREA

KOTRA자료 17-062

Fashion04 Industry Overview Definition of the Industry Status of the Industry Competitiveness of the Industry Prospect for the Industry

13 Locational Competitiveness Status of Fashion Industry Location Conditions and Benefits of Fashion Industry Location

17 Policies, Cost and Success Cases

Government Policies and Related Laws Cost Success Cases of Foreign Investment

22 Related Companies and Associations

Beauty27 Industry Overview and Locational Competitiveness Overview and Status of the Industry Locational Conditions and Benefits 33 Policies, Cost and Success Cases Government Policies and Incentives Cost Success Cases of Foreign Investment

39 Related Companies and Associations

41 Relationship with Other Industries

Contents

Most figures in this report are converted from KRW into USD based on yearly average exchange rates. But growth rates (e.g. CAGR and YoY growth rate) are calculated based on KRW to prevent any distortion caused by changes in exchange rates.

FASHION & BEAUTYI N V E S T M E N T O P P O R T U N I T I E S I N K O R E A

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4FASHION

01 INDUSTRY OVERVIEW

I. FASHION

5 INDUSTRY OVERVIEW

Definition of the Industry

“Fashion” refers to the popular and personal practice of style in clothing, accessories, and behaviors, which are

accepted and popularized by the public during a particular place and time.

•�� In this report, the fashion industry is defined as a manufacturing industry that covers subjects related to apparel

such as yarn (as a finished product mainly made up of fiber), knitted/woven goods, dyeing processing, apparel

manufacturing, accessories, and clothing subsidiary materials.

Fashion as a highly value-added, knowledge-intensive industry.

•�� Fashion goods have practical and aesthetic values. The former centers on the physical aspect of stability,

comfort and functionality, while the latter focuses on aesthetic value and design.

- Along with practicality, fashion goods has been increasing its added value given the strengthening of brand

popularity, visual beauty, self-satisfaction, trends, design, and materials.

Fashion trends spread faster with single cycle.

•�� A trend can catch on globally much quicker nowadays.

- The reasons behind this include the development of communication thanks to the Internet and satellite

communication, the advancement of mass media, and the growing number and diversification of people with

higher income levels.

- In addition, fashion products are highly susceptible to seasons and trends, thus making their life cycle short

while bringing in continuous demand. This creates sustainable growth for the industry as consumers and

preferences diversify, so new products are developed to meet the changing needs of customers.

Status of the Industry

Status of the Global Market

A sharp change in the fashion industry’s consumer pattern.

•�� Consumer demand patterns have become more complicated, especially due to the growing gap between

increased consumption caused by higher income and rational consumption caused by the economic recession.

Other reasons include the demand for individuality and personalized fashion, the expansion of life-enriching

consumption such as leisure and cultural activities, the increase in online purchases, the aging population, and

the shift of core consumers.

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- With this polarization, a variety of brands are expanding into the global market, from high-end luxury brands,

such as Burberry and Louis Vuitton, to mid to low-end SPA brands, such as Zara, H&M, and UNIQLO, which have

a strong advantage in design, planning, and distribution.

- While global brands are competing in domestic and overseas markets, the competition in global production

is further intensifying through strengthened production and technological power. This is a result of increased

foreign investment into China and Southeast Asian countries.

The global fashion market has achieved an average annual growth rate of 4.2% between 2009 and 2013,

reaching USD 1.54 trillion in 2013. The market is expected to grow at approximately 4% annually until 2020.

•�� By clothing type, the womenswear market is worth USD 638.1 billion, accounting for the largest share in the

total market at 41.5%. Menswear accounts for 27.6%, and children's clothing for 14%.

- Products with newly converged technology are growing at a high rate. The “smart” trend is not only being

rapidly developed in clothing that integrates IT technology but also in the production and fashion distribution

process as well.

Scale of Fashion Market by Clothing Type (2013) (USD 100 million, %)

Classification Total Womenswear Menswear Kids wear Shoes

Scale 15,360 6,381 4,232 2,162 2,584

Share 100.0 41.5 27.6 14.1 16.8

Source: Market Line, 2014

Growth Trend in Global Fashion Market (USD billion)

2009 2010 2011 2012 2013

1,600

1,550

1,500

1,450

1,400

1,350

1,300

1,250

1,200

1,150

1,306

1,355

1,418

1,4791,536

Source: Market Line, 2014

•�� By region, the fashion market in America is worth USD 560.6 billion, accounting for 36.3% of the total fashion

market, while Europe accounts for 33% with USD 507.6 billion, and the Asia Pacific region for 27.2% with USD

417.8 billion.

- By country, the market size of the United States stands at USD 445.7 billion (29.0%); China at USD 194.1 billion

(12.6%); Japan at USD 116.0 billion (7.6%); Russia at USD 82.7 billion (5.4%); and South Korea at USD 31.8 billion

(2.1%).

7 INDUSTRY OVERVIEW

Status of Fashion Market by Continent (2013) (USD billion)

U.S.A445.7 Europe

507.6

Brazil50.5

Russia82.7

China194.1

Japan116

Korea31.8

Mexico 8.4India 18

Singapore 3.3

Taiwan 7.9

Austrailia 19.6

Americas 560.6

Asia pacific417.8

Source: Ministry of Commerce, Industry and Energy, Report on the 2014 Korean Fashion Market; requoted (Source: Market Line)

Status of Domestic Market

The domestic fashion market continues to grow slightly despite uncertainties like the sluggish domestic

demand.

•�� The focus of the fashion market is shifting from the sportswear market to the casual wear market, while casual

wear, menswear, womenswear, and underwear are showing consistent growth.

Fashion Market Scale in 2016 and 2017 (USD million, %)

Clothing Type 2016(e) YoY 2017(p) YoY

Casual wear 11,438.1 5.40 12,246.4 6.40

Sportswear 6,059.5 −7.9 5,958.8 −2.3

Shoes 5,361.1 −5.9 5,313.5 −1.5

Menswear 3,991.0 11.80 4,268.6 6.30

Womenswear 3,120.5 2.80 3,363.3 7.10

Shoes 2,153.1 3.60 2,208.4 1.90

Underwear 1,774.9 13.60 1,972.7 10.40

Kids wear 1,051.3 8.90 1,066.2 0.80

Fashion market 34,949.5 1.80 36,397.8 3.50

Source: Korea Federation of Textile Industries(KOFOTI)

- The growth of the domestic fashion market is also attributed to the growth of online and mobile shopping;

the diversification of new distribution channels, such as multi-platform shopping; and the diversification of

consumers, which include the youth, men, and the elderly.

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Production in the domestic fashion industry increased between 2010 and 2014 because of the continued

growth in domestic demand and export volume. However, in the short term, production volume has been

on the decline since 2012 because of worsening domestic production conditions and weakening demand for

locally produced goods.

•�� As a result, a growing importance of aesthetics in product designs, the continued growth of SPA brands,

and increased exports of "Korean wave" content serve as positive factors for domestic production. However,

production has somewhat dwindled as the growing demand in the domestic market is involved more with

imported products than domestic ones.

Production Trend in the Fashion Industry (USD million, %)

Clothing Type 2010 2011 2012 2013 2014 CAGR(10-14)Share

Chemical fibers 3,912 4,557 5,021 5,148 4,945 9.1 5.2

Yarn fibers 2,850 3,208 3,306 3,566 3,449 6.4 4.1

Woven goods 5,497 7,109 7,445 7,294 6,385 11.8 3

Knitted goods 3,921 4,051 4,405 4,825 3,644 6.7 -2.6

Dyed products 2,561 2,479 2,726 2,679 2,622 4.8 -0.2

Clothing materials 18,740 21,404 22,903 23,511 21,044 38.8 2.1

Fashion apparel 24,689 27,677 37,826 35,949 33,200 61.2 6.8

Total 37,480 42,808 45,806 47,023 42,089 100

Source: The Bank of Korea, Input-Output Table, Annual report

•�� Looking at the changes in the production structure of fashion apparel, the share of shirts and workout clothes

increased the most with 28% of the total production in 2014. This is due to the rise in the number of consumers

who are interested in leisure and health, as well as changes in lifestyle. In addition, the boundary among the

types of clothing such as casual style in sportswear and outdoor wear has blurred.

- While the share of women's suits declined slightly, male suits accounted for 19% of the total, because of the

increased interest in fashion among men. Due to better quality and increasing prices, the shares of infant

clothing increased by 2.9% in 2014 despite the low birth rate.

Production Structure for Fashion Apparel (%)

Year Men's Suit Women's Suit Kids wear Underwear/

Pajamas

Shirts/Workout clothes

KnittedClothing

Clothing Accessories Others Total

2010 16.2 29.1 2.6 3.8 28.4 8.2 6.0 5.7 100.0

2011 19.4 28.6 1.9 3.8 25.8 8.8 6.5 5.2 100.0

2012 10.0 36.7 3.0 3.6 27.9 7.2 5.7 5.8 100.0

2013 19.5 26.9 2.2 3.6 27.4 10.3 5.7 4.4 100.0

2014 18.8 25.3 2.9 3.9 28.1 10.0 6.0 5.1 100.0

Source: Statistics Korea, Mining and Manufacturing Survey, Annual

9 INDUSTRY OVERVIEW

•�� While the export of fashion apparel increased by 4.4% since 2010 because of the rising popularity and

recognition of Korean brands brought about by the Korean Wave and improved product competitiveness,

clothing materials like textiles and fabrics, showed a downward trend.

- The increased export volume of such fashion apparel was attributed to export growth in countries influenced

by the Korean Wave such as Vietnam (24.2%), Taiwan (16.0%), Indonesia (10.8%), Myanmar (9.34%), and China

(3.2%).

- In particular, exports to Japan, which accounted for the largest portion of fashion apparel in 2010, grew by

1.5% between 2010 and 2016, while exports to Vietnam surged by more than 20% during the same period.

Meanwhile, exports to China increased by 3.5%, as its major export items changed from apparel parts to

finished apparel. As a result, China surpassed Japan to become Korea's first or second largest fashion export

destination.

- However, fashion apparel imports grew rapidly because of the increase in the reimport of mid to low–priced

foreign products and the rise in the import of high-priced products from advanced economies, which resulted

in the rapidly expanded trade deficit.

Export and Import Trends in the Fashion Industry (USD million, %)

IndustryExport Import Trade Balance

2010 2016 CAGR(10-16) 2010 2016 CAGR

(10-16)　 2010 2016

Textile materials

1,109 1,125 0.2 245 203 −3.1 864 922

Fibers 1,580 1,314 -3.0 2,238 1,862 −3.0 -658 −548

Textile 8,464 7,821 -1.3 1,647 1,838 1.8 6,817 5,983

Fashion apparel

1,462 1,896 4.4 4,247 8,331 11.9 −2,785 −6,435

Total 12,615 12,156 -0.6 8,377 12,234 6.5 4,238 −78

Source: Korea International Trade Association, kita.net

Status of Foreign Direct Investment in the Industry

Foreign direct investment in the Korean fashion industry has somewhat slowed down since 2013 but remains

stable.

•��Unlike in the past when global fashion companies preferred Japan or Hong Kong as their base for entering the

Asian market, they recently preferred to go straight to the Korean market for Chinese and Korean consumers.

Foreign Investment Trend in the Fashion Industry (Textiles/Fabrics/Clothing) (no. of cases, USD million)

Classification 2008 2009 2010 2011 2012 2013 2014 2015

Cases 19 20 28 17 29 16 15 15

Amount 86 55 74 10 316 51 35 363

Source: The Ministry of Trade, Industry and Energy, Statistics on Foreign Direct Investment, based on notification

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However, foreign investment tends to be concentrated more on the distribution of global fashion brands than

on apparel manufacturing, and it mainly includes joint ventures with global SPA brands such as UNIQLO and

Zara.

•�� Burberry and Gucci are the luxury brands that have directly entered the Korean market to benefit from the

sustained growth in the Korean fashion industry and attract foreign tourists.

Major Foreign Investment Companies in the Fashion Apparel Sectors

Company Entered Sectors Foreign

Investment First Registered

Major investing countries

Sales in 2016 (KRW billion)

FRL Korea(UNIQLO)

Wholesale of shirts and others (46413) 2004 Japan 1,117

ZARA Retail Korea Wholesale of shirts and others (46413) 2008 Spain 290.5

H&M Hennes & Mauritz KoreaRetail sale of shirts and other clothing

(47416)2009 Sweden 156.8

Gucci Korea (Ltd.) Wholesale of goods (46800) 1998 Netherlands242.5(2013)

Burberry Korea Wholesale of shirts and others (46413) 2002 UK 251.2

Source: The Ministry of Trade, Industry and Energy, Information on Foreign Investment CompaniesNote: ( ) Indicates HS Code

Competitiveness of the Industry

Global Market Share

Korea's export market share of fashion apparel continues to decline because of lowered production

competitiveness such as rising labor costs in Korea, emerging competitors, and expanding overseas production.

•�� The export of Korean fashion apparel accounted for 7.3% of the world's export market in 1990, ranking 5th, but

its share fell to 0.5%, ranking 30th in 2014 because of the increased production and the export from emerging

countries such as Bangladesh, Vietnam, and India.

Apparel Export Market Share of Major Countries (%, USD million)

Rank1990 2000 2014

Country Market share Country Market share Country Market share

1 Hong Kong 14.2 China 18.2 China 38.6

2 Germany 13.8 Hong Kong 12.2 Italy 5.1

3 Italy 10.9 Italy 6.8 Bangladesh 5.1

11 INDUSTRY OVERVIEW

Rank1990 2000 2014

Country Market share Country Market share Country Market share

4 China 8.9 Mexico 4.4 Hong Kong 4.2

5 South Korea 7.3 US 4.4 Germany 4.1

6 France 4.3 Germany 3.7 Veitnam 4.0

11 South Korea 2.5

30 South Korea 0.5

Total exports amount

108,129 197,903 483,280

Source : World Trade Organization

•�� However, as the backbone of fashion apparel, the share of textile materials for apparel in the export market

is 35.6% in 2014 for China, 5.8% for India, 4.9% for Germany, 4.6% for the US, 4.4% for Italy, and 4% for

Turkey, followed by 3.8% for Korea, ranking seventh in the global export market, which shows relatively high

competitiveness.

Technology Competitiveness

The US and Europe have the highest level of production technology for raw materials and new applications,

while Japan is the strongest in commercialization technology. Korea is ahead of China overall, but the gap is

narrowing rapidly.

Korea has a gap of 1.5 years in terms of technology for fashion apparel compared to the highest level in the

world.

•�� Europe is number one in the world in terms of culture and design as well as the development of luxury brands

for traditional technology, high-speed inkjet printing technology, and dyeing processing technology, while the

US is the best in product planning and biz model development technology.

Korea has a gap of 2.2 years in terms of fashion apparel and living fabric materials, compared to the highest level

in the world.

•�� The US is the world's best in the fields of safety protection, sports leisure, and smart textiles, while the EU is the

strongest in the field of interior textiles. With this, Japan is the most competitive in eco-friendly, highly sensitive,

and highly functional textiles.

Comparison of Technology Level by Area (score, year)

Category TechnologyTechnology Level Technology Gap

Korea US Japan Europe China Korea US Japan Europe China

Fashionapparel

Fashion apparel 86.3 90.4 92.1 100 71.9 1.4 0.8 0.7 0.0 2.8

Innovative process 85.6 93.8 100 92.5 76.1 1.5 0.6 0.0 0.7 2.6

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Category TechnologyTechnology Level Technology Gap

Korea US Japan Europe China Korea US Japan Europe China

Fashion apparel / textile

materials for living

Eco-friendly, highly sensitive, highly functional textile

85.1 94.8 100 97.2 71.4 1.5 0.6 0.0 0.3 2.9

Textile for safety protection

78.1 100 94.5 95.3 68.3 2.2 0.0 0.6 0.5 3.2

Smart textile 81.0 100 95.6 94.7 68.3 1.9 0.0 0.5 0.5 3.2

Interior, well-being textile

84.8 93.6 97.8 100 71.4 1.5 0.5 0.0 0.0 2.8

Sports, leisure textile 88.0 100 95.8 99.5 73.4 1.2 0.0 0.0 0.0 2.8

Source: 2013 Report on the Industrial Technology Level, KEIT

Prospect for the Industry

The global textile demand in 2013 stood at 90 million tons and was worth USD 1.8 trillion. By 2020, it will grow at a CAGR of 3.2% by 2020 in terms of quantity. (Source: Fiber Organon, 2014, WTO, 2013, Capital Markets Day 2014, Lenzing)

•�� In terms of quantity, it is comprised of 54% for clothing, 28% for living, and 18% for industrial fiber. (Source: Estimated based on Capital Markets Day 2012 and 2013, Lenzing, Transparency Market Research, 2013)

•�� The global fashion apparel market volume in 2013 was estimated to be worth USD 1.33 trillion, and it is expected to show an annual growth rate of about 4% by 2020.

(Source: Market Line 2014)

- As the market boundaries between countries fall and the O2O business strategy linking online and off-line converge, the globalization and centralization of the supply chain from production to distribution is being accelerated.•�� The global market for textile materials for apparel amounted to about 9.69 million tons and was worth about

USD 60 billion in 2012. The market will grow at an average growth rate of 3% per year in terms of quantity. While Japan, the EU, and the US are leading the market, Korea and China are close behind.

(Source: Transparency Market Research, 2013)

The Korean fashion industry is also expected to grow steadily with progress in diversification, segmentation, and integration along with increasing demand. •�� Korea has a balanced production base in the upstream, midstream and downstream industries. It possesses

world-class synthetic fiber materials companies and infrastructure, and has the potential to utilize convergence

technologies such as IT and Nano Technology (NT).

- Meanwhile, the increasing demand for high performance and eco-friendly textiles, as well as consumer preferences for high quality, unique and diverse clothing are expected to be a driving force of the growth of the fashion market in the future.

- As fashion apparel shifts to a diverse-type, small-quantity production structure, the markets for fashion apparel are expected to be diversified, segmented, and converged such as eco-friendly, highly functional, design-oriented, smart, and highly sensitive apparel.

13 LOCATION COMPETITIVENESS


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Status of Fashion Industry Location

The most concentrated locations for the fashion industry in Korea include Seoul, Incheon, and Gyeonggi-do, which are leading the trend and distribution sector and possess the largest consumer market.

The knitting industry is concentrated in the northern part of Gyeonggi-do and the northern part of Jeolla-do. •�� The northern part of Gyeonggi-do is the world's top knitting production area, and accounts for about 40% of

the world market for high-quality knitwear (golf wear, sportswear/leisure wear, etc.), while accounting for about 90% of the domestic knitting production. It is also the largest consumer of yarn, consuming 60% of the locally produced yarn. •�� The northern part of Gyeonggi-do has the world's only short-term delivery (within one week) production

system, and all production processes from yarn to post-processing are done in the region, providing an advantageous structure for new product development and commercialization. •�� The northern part of Jeolla-do is home to various producers, from the spinning industry to the sewing and

clothing manufacturing industry. It also has a production structure mainly based on natural fibers such as cotton yarn, knitting yarn, and sewing, among others. In terms of products, knitwear (which mainly includes underwear and kids wear) is the mainstay of the textile industry in the region.

Location of Korea Fashion Industry

North Gyeonggi-do:KnitGyeonggi, Incheon: Fashion apparel

Seoul: Fashion apparel

Chungcheongnam-do: Jacquard

Jeollabuk-do: KnitBusan: Woolen fabrics

Gyeongsangnam-do (Jinju):Silk

Daegu: Textiles

Gyeongsangbuk-do: Synthetic fabrics

Capital Area Gangwon-

do

Daegu and Gyeongsangbuk-do

Chungcheong-do

Busan and Gyeongsangnam-do

Jeolla-do

The jacquard industry in Chungcheongnam-do is mainly occupied by companies that develop fashion and home interior products using jacquard. •�� To develop jacquard products, a variety of labor-intensive work, such as material development, design, and

product planning, is required. Korea has a great deal of design database and colorway tools, which makes a strong foundation for jacquard development.

In Busan, large-scale apparel companies, such as Parkland, Indian, Colping, and Greenjoy, operate a sewing factory equipped with automation facilities. Facilities for OEMs are located within a 50 km radius of Busan. •�� The city's geographical characteristics, its proximity to the sea, ports, and an international airport, allow the fast

introduction of global trends, giving Busan strong logistics competitiveness and ease in promptly responding


to global demands. It has an abundant source of technology personnel on standby and new skilled workforce with its universities.

In the Daegu and Gyeongbuk region, the production base has sharply decreased because of bankruptcy and the restructuring of marginal firms until 2005; however, the textile production base has remained stable since 2006.•�� As the largest textile and chemical fiber center in Korea, it is the country's leading textile exporter.

The Gyeongsangnam-do and Jinju areas account for 80% of the domestic silk production, occupying more than 70% of the market.•�� By shifting its production from OEM to ODM, a direct production method, it is paving the way for the expansion

of a sales channel from the local market to export destinations and its development of highly sensitive materials for various purposes from products mainly focused on traditional Korean dress ("Hanbok") and ties. It is also focusing on brand marketing by shifting from fabric-oriented to finished product brands.

Conditions and Benefits of Fashion Industry Location

To promote foreign investment, specific areas, such as foreign investment zones, free trade zones, free economic

zones, and complexes exclusively for components and materials, have been designated. Companies can also receive various benefits and incentives in these regions.•�� Among them, foreign investment zones and free economic zones are closely related to the fashion and beauty

industries.

The foreign investment areas are classified into three types: complex (23), individual zone (75), and lease zone (4). Benefits include tax reduction, rent discount, etc.

Among 23 complex-type foreign investment areas, Gumi (textile, fabrics) is the most highly concentrated area for the fashion industry.

Incentives for Lease of Government-owned Land

Eligible appplicant Rent discount Note

1. Companies in individual-type foreign investment zone. 100% * Only for government-owned lands according to, - the National Property Act; - the Public Property Act; - the Law on Operation of Public Organizations.

* For joint ventures, - foreign investment should account for more than 30% of its shares; - or the largest stakeholder should be a foreigner.

2. Business over USD 1 million requiring highly advanced technology & Industrial support service business.

100% for foreign investment zones.50% for industrial complexes.

3. Manufacturing business over USD 5 million.

In Foreign Investment Zone, - 100% for parts and material; - 75% for others.In Industrial Complexes, 50%.

4. Manufacturing business over USD 2.5 million.

By no. of regular employees, - 100% for over 200; - 90% for over 150; - 75% for over 70.

* Private contract is possible

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Incentives for Tax Exemption

Eligible appplicantTax exemption

National tax Local tax Customs

1. Business requiring highly advanced technology or industrial support service business.

100% for 5 years, 50% for 2 years

100% (maximum 15 years by the laws of the local government)

* 7 years-type- exemption for customs, individual consumption, and value-added tax for 3 years.

* 5 years-type- only customs are exempted.

2. Companies in individual-type foreign investment zone.


"

3. Complex-type foreign investment zone. -Manufacturing business over USD 10 million. -Logistics business over USD 5 million.


"

Source: Korea Industrial Complex Corporation

Exemption of corporate tax, income tax, customs tax, acquisition tax, and property tax for foreign investment firms in the free economic zones•�� In addition, for 10/1,000 of the government-owned land, lease is permitted for 50 years, and rent can be

reduced by 50%–100% according to the local government ordinance. •�� In particular, for the Daegu-Gyeongbuk Economic Freedom Zone, support will be concentrated on the fashion

design sector.

Benefits for Foreign Investment Companies in Free Economic Zones

Tax type Details of Reduction Condition for Reduction

National Tax

Corporate TaxIncome Tax

Five-Year Tax Reduction. •�For�three�years:�100%�exemption.•�For�the�next�two�years:�50%�reduction.

Manufacturing business: Over USD 10 million.

7-Year Tax Reduction. •�For�five�years:�100%�exemption.•�For�the�next�two�years:�50%�reduction.

Manufacturing business: Over USD 30 million.

Customs 100% exemption for five years. Limited to imported capital goods.

Local TaxAcquisition Tax 100% exemption for up to 15 years according to laws and regulations of the local government.

Property Tax Reduction for up to 15 years according to laws and regulations of the local government.

Source: Korean Free Economic Zones; KFEZ

17 POLICIES, COST AND SUCCESS CASES


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Government Policies and Related Laws

Government Policies and Incentives

Project to Develop Global ExpertiseThe project aims to develop small and medium-sized companies with the technological innovation capacity

to become a global professional enterprise by supporting the development of major short-term industrial

technology.

Project to Develop Special Technology for Material PartsThe project promotes the development of new technologies and differentiated products by offering financial

aid for technology development to a consortium that plans to jointly implement planning, technology

development, production and marketing between textile and fashion stream (or between the textile fashion

industry and other industries). The textile fashion stream refers to textile fields used for clothing, living and

industrial purposes.

Project to Develop Key Industrial TechnologyThe project fosters new future industries by offering intensive support for the strategic development of key and

original technologies based on national growth strategies, and creates future growth engines by enhancing

industrial competitiveness of key industries.

Applicable areas include high value–added key technology, source technology and engineering technology that

can have a significant ripple effect and substantially enhance industrial technology competitiveness within 10

years.

The fields of support, meanwhile, are divided into creative industries and material parts industries. The textile

apparel falls into the rebuilt parts industry. Regarding fashion apparel, support is mainly concentrated on the

development of new materials for yarns and fabrics.

Project to Strengthen Design Innovation Capability

The project fosters specialized global companies and upgrades the design ecosystem by strengthening design

innovation capacity of small and medium-sized firms and exploring new design markets.

Applicable Areas

Classification Purpose and Description

Fostering global companies specialized in design.

Fostering global design (design utilizing) companies equipped with key capabilities to lead the design innovation *A “design utilizing company” refers to a manufacturing business with design capabilities (department exclusively for design or designers).

Developing professional design technology.

Supporting design technology development to commercialize promising technology/products and business ideas of small and medium-sized companies*In case of collaborative development among manufacturing companies and design specializing companies*, it is necessary to submit a royalty contract.


Classification Purpose and Description

Developing next-generation key design technology.

Supporting the research and development of key and basic design technologies to preoccupy the future market

Building new ecosystem for service design-based manufacturing industry.

Discovering–supporting new business areas by integrating service design based on products※In case of collaborative development among manufacturing companies and design specializing companies*, it is necessary to submit a royalty contract.

* Companies specialized in design according to Article 9 of the Industrial Design Promotion Act

Applicable Laws and Regulations

A verification of origin of textiles and apparel is conducted under the Korea–US Free Trade Agreement: "Free Trade Agreement between Korea and US of America” Article 4.2 (8). Upon the request of the importing party, the exporting party shall carry out the verification for the purpose of enabling the party of import to determine that the country of origin for the textile or apparel product is correct.

For order cancellations and returns, Article 17 (1) of the "Consumer Protection Act on Electronic Commerce etc.” states that consumers can freely cancel the subscription within the period of withdrawal of the subscription or contract termination (normally seven days) regardless of the contents of the e-commerce contract entered into by themselves.

In regards to the common safety standards for hazardous substances for children's commodities, Notification No. 2010-676 of the Korean Agency for Technology and Standards sets the standard for harmful substances only for children's products. This standard applies to metal products that are in direct contact with the skin (nickel used in toys, jewelry, eyeglass frames, sunglasses, clothing, etc.).

The Chemical Control Act protects the lives, property or the environment of all people from chemical substances by preventing harmful effects on public health and the environment from occurring, manages chemical substances appropriately and promptly responds to accidents caused by such substances.

The Act on the Registration and Evaluation of Chemical Substances protects the health of the people and the environment by defining details on the registration of chemical substances, examines and evaluates the products containing chemical and hazardous chemical substances, and designates hazardous chemical substances, allowing people to produce or utilize the information on chemical substances.

Cost

Price and Workforce Supply

The proportion of labor costs relative to the production value of the fashion industry is about KRW 1.7 trillion in fashion apparel, accounting for 9.6% of the total production, while textile materials account for 12.8%.

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•�� For major production costs out of gross output, textile materials account for 65.1%, and fashion apparel accounts for 55.2%. •�� Among the elements of major production costs, the share of the raw material costs is 75.8% for textile materials

and 55.6% for fashion apparel.

•�� In particular, as for fashion apparel, the share of outsourced processing, such as sewing, is very high with 43.3%,

while electricity and fuel costs are relatively high for textile materials because of processes such as chemical fiber manufacturing, knitting, and dyeing.

The share of the sales cost out of the sales of fashion manufacturing companies was the highest for textile materials, being 98% in 2012; however, it gradually improved and dropped to 88.5% in 2015.

Structure of Production Costs for Fashion Industry (2014) (KRW billion, %)

　Industry Gross OutputAdded Value Major Production

CostsLabor CostTextile Materials 18,796 (100) 6,551 (34.9) 2,403 (12.8) 12,243 (65.1)

Fashion Apparel 16,130 (100) 7,227 (44.8) 1,541 (9.6) 8,903 (55.2)

Source: Mining and Manufacturing Survey, for companies with more than 10 peopleNote: ( ) refers to the share out of the gross output -The share of the sales cost for fashion apparel also started to improve slightly from 2013, accounting for 60.3% of the total in 2015, and the price competitiveness is relatively higher than that of textile materials

Structure of Major Production Costs for Fashion Industry (%)

IndustryMajor

Production Cost

Raw Material Cost Fuel Cost Electricity

CostWaterCost

Outsourced Processing

Cost

Repairing Cost

Textile Materials 100.0 75.8 3.2 4.8 1.3 14.2 0.8

Fashion Apparel 100.0 55.6 0.1 0.4 0.2 43.3 0.4

Source: Statistics Korea, Mining and Manufacturing Survey, for companies with more than 10 people

Share of Sales Cost to Sales for the Fashion Industry (%)

Industry 2010 2011 2012 2013 2014 2015Textile Materials 87.6 96.4 97.9 91.8 94.4 88.5

Fashion Apparel 56.0 56.5 59.5 67.2 60.0 60.3

Source: Based on KISVALUE, KOSPI

Cost-to-Profit

The fashion industry’s operating profit in proportion to sales is declining to some extent, and profitability is decreasing. As of 2015, the operating profit margin to sales of textile materials is 3.5% and that of fashion apparel is 4.9%.

Trend in Operating Profit Margin to Sales for Fashion Industry (%)

Industry 2010 2011 2012 2013 2014 2015

Textile Materials 7.8 −5.1 −3.2 3.5 −0.7 3.5

Fashion Apparel 7.3 7.7 5.3 4.7 5.3 4.9



The profitability of the fashion apparel market in Korea is highly dependent on the distribution structure.•�� The largest share is the distribution fee. For department stores, which account for a large portion of retail sales,

the distribution fee is around 35% for clothing, burdening manufacturers and increasing consumer prices.

In addition, the profitability of the fashion industry is determined by the markup. Selling price is determined by adding a certain level of markup (including distribution fee) to the manufacturing cost. The higher the brand awareness and loyalty, the higher the markup is applied, resulting in increased profitability.

Success Cases of Foreign Investment

UNIQLO

FRL Korea, an operator of UNIQLO Korea is a joint venture between Lotte Shopping and Fast Retailing in Japan, holding 49% and 51% of its shares, respectively. •�� Lotte Shopping's strong distribution network was the most attractive factor behind the joint venture, which

enabled UNIQLO to grow into a leader in the domestic SPA industry.•�� Out of 180 UNIQLO stores, 58 stores are located in Lotte Department Stores, Lotte Outlets, and Lotte Marts.

Because it is a joint-venture corporation, it has a competitive advantage in terms of price over other apparel brands because of the lower rent.

UNIQLO's innovation capability minimizes the cost of all stages from raw materials to sales, simplifies design, attempts to sharply cut down prices by not engraving the logo, and creates a new market by upgrading its materials and products. UNIQLO leads the Korean SPA market with sales of over KRW 1 trillion in Korea in 2015.•�� It diversified the way of opening its stores in Korea, for example, utilizing major distribution channels, such

as department stores, outlets, and marts, or opening roadside stores. It implements strategies to enhance convenience and accessibility by expanding its business in local areas.

Growth Trend of UNIQLO (KRW 100 million)

Operating profit Sales

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

341 726 1,2262,260

3,2805,050

6,9408,954

11,169

16,00014,00012,00010,000

8,0006,0004,0002,000

0

2,0001,5001,0005000

-500-1,000-1,500-2,000-2,500-3,000

11,822

1,0731,564

1,0777686425203511077917

22FASHION

04 RELATED COMPANIES AND ASSOCIATIONS


Lists of Companies Related to Fashion Apparel

Company Name Major Items Website Location

Namyeung Vivien Women's lingerie www.namyeung.co.kr Yongsan-gu, Seoul

BYC Co., Ltd. Undershirt, lingerie, T-shirt www.byc.co.kr Jeonju-si, Jeollabuk-do

Beaucre Merchandising Womenswear www.ibeaucre.co.kr Geumcheon-gu, Seoul

E-Land Group Kids wear, casual, SPA www.elandretail.com Mapo-gu, Seoul

LF GroupReady-to-wear

clothing, fashion accessories www.lfcorp.com Gangnam-gu, Seoul

Samsung C&T Corporation Fashion Division

Casual, menswear samsungcnt.com Seocho-gu, Seoul

KOLON IndustryFnC Division

Outdoor, golf, women, casual, etc. kolonindustries.comGwacheon-si, Gyeonggi-do

FRL Korea Wholesale and retail of casual wear www.uniqlo.com Jung-gu, Seoul

Adidas Korea Sportswear www.adidas.co.kr Seocho-gu, Seoul

Hyungji Group Women casual www.hyungji.co.kr Gangnam-gu, Seoul

NIKE Korea Sportswear www.nike.co.kr Gangnam-gu, Seoul

Sejung GroupWomenswear, menswear, outdoor,

sports www.sejung.co.kr Geumjeong-gu, Busan

Shinsung Tongsang Men's casual, men's dress suit, SPA www.ssts.co.kr Gangdong-gu, Seoul

Descente Korea Sportswear, golf www.descentekorea.co.kr Gangnam-gu, Seoul

K2 Korea Outdoor www.k2.co.kr Seongdong-gu, Seoul

Blackyak Outdoor www.blackyak.com Seocho-gu, Seoul

F&F Group Outdoor www.fnf.co.kr Gangnam-gu, Seoul

Kumkang Outdoor, golf www.kumkang.com Gyeyang-gu, Incheon

Parkland Menswear www.parkland.co.kr Geumjeong-gu Busan

Sungjoo Group Casual www.sungjoogroup.com Gangnam-gu, Seoul

LS Networks Sports www.lsnetworks.co.kr Yongsan-gu, Seoul

Youngone Outdoor Outdoor www.yooutdoor.co.krChangwon-si,

Gyeongsangnam-do

FILA Korea Sportswear www.fila.co.kr Seocho-gu, Seoul

ZARA Retail Korea SPA www.zara.com/kr Gangnam-gu, Seoul

Shinwon Women's suit www.sw.co.kr Mapo-gu, Seoul

MK Trend Casual www.mktrend.co.kr Gangnam-gu, Seoul

Millet Outdoor, climbing suit www.millet.co.kr Mapo-gu, Seoul

Aioli Women's casual, women's suit www.aioli.co.kr Gangnam-gu, Seoul

Lee and Han Casual, outdoor shop.exrkorea.com Gangnam-gu, Seoul

Baba Fashion Women's suit www.babafashion.com Seocho-gu, Seoul

Giordano Casual www.giordano.co.kr Seocho-gu, Seoul

Indong FN Womenswear indongfn.co.kr Seocho-gu, Seoul

Handsome Womenswear www.handsome.co.kr Gangnam-gu, Seoul

24FASHION


YK038 Womenswear www.yk038.co.kr Seocho-gu, Seoul

GSGM Casual www.gsgm.co.kr Gangnam-gu, Seoul

Biltmore Menswear www.ibiltmore.com Gangdong-gu, Seoul

The Basic House Casual, kids wear www.basichouse.co.kr Gangnam-gu, Seoul

Demoo Women's www.demoo.com Gangnam-gu, Seoul

Valencia Womenswear www.valencia.co.kr Seongdong-gu, Seoul

Chatelaine Womenswear www.chatelaine.co.kr Gangnam-gu, Seoul

Songjungwan Womenswear sonjungwan.com Gangnam-gu, Seoul

Agabang Company Kids wearwww.

agabangncompany.comGangnam-gu, Seoul

List of Companies Related to Textile Materials


Hyosung Co., Ltd. Filament yarn www.hyosung.co.krNam-gu, Ulsan

Gumi, Gyeogsangbuk-do

HUVIS Co., Ltd. PSF www.huvis.com Jeongju, Jeollabuk-do

Taekwang Industrial Co., Ltd. Acrylic tow, spandex, nylon, polyester

fabricwww.taekwang.co.kr

Nam-gu, Ulsan, Gyeongju, Gyeongsangbuk-do

TK Chemical Co., Ltd. PF, DTY, spandex www.tkchemi.co.krChilgok, Gyeongsangbuk-do

Gumi, Gyeongsangbuk-do

Seongan Synthetics Co., Ltd. Polyester filament yarn www.sasyn.co.kr Gumi, Gyeongsangbuk-do

Daenong Co., Ltd. Modal cotton, Tencel, modal www.daenong21.comCheongwon-gun,

Chungcheongbuk-do

SG Choongnam Spinning Co., Ltd.

Recycled staple fiber yarnwww.sgchoongbang.

comNonsan, Chungcheongnam-

do

Daehan Synthetic Fiber Co., Ltd. Polyester www.daehansf.co.kr Nam-gu, Ulsan

Samyang Corporation Co., Ltd. Polyester high-strength yarn www.samtangcorp.com Jongno-gu, Seoul

KP Chemtech Co., Ltd. Nylon yarn www.kpchemtech.co.kr Nam-gu, Ulsan

Toray Chemical polyester filament yarn www.toray-tck.com Gumi, Gyeongsangbuk-do

Samheung Co., Ltd. PP filament yarn www.maxlon.co.kr Pocheon, Gyeonggi-do

Shinwon Textile Co., Ltd. Polyester DTY www.chewon.co.kr Gumi, Gyeongsangbuk-do

Dongil Corporation Komasa (combed yarn) 60 www.dong-il.comSeocheon-gun,

Chungcheongnam-do

Jayoung Co., Ltd. Worsted, carded wool, pure wool and

blended wool www.daewon.co.kr

Cheongju, Chungcheongbuk-do

TAIHAN Textile Co., Ltd.Cotton fabrics, knitted fabrics, cotton

yarn, etc.www.thtc.co.kr/

Yeongdeungpo-gu, Seoul

SEONG-AN Co., Ltd. Polyester fabric Buk-gu, Daegu

Duckwoo Corporation Polyester fabricChilgok-gun,

Gyeongsangbuk-do



Woongjin Textile Co., Ltd. Two-way stretch (PET, nylon, etc.) www.tcktextiles.com Gumi, Gyeongsangbuk-do

Eulhwa Co., Ltd. Chador fabric www.peacetex.co.kr Gumi, Gyeongsangbuk-do

Chonbang Co., Ltd. Denim, cotton cloth, cotton blend fabric www.chonbang.co.krSeodaemun-gu, Seoul

Yeongam-gun, Jeollanam-do

Jeongsan International Co., Ltd. Laminated fabric www.jeongsan.com Gangseo-gu Busan

Shinhan Spinning Co., Ltd. Circular knitted fabric shinhan.net Guro-gu, Seoul

Ducksan Enterprise Co., Ltd. Brushed cotton knit fabric Pocheon, Gyeonggi-do

Saechang Commercial Co., Ltd. Light knitted fabric www.saechang.co.kr Icheon, Gyeonggi-do

Mogae Textile Co., Ltd. Polyester knitted fabric www.mogaetextile.com Saha-gu, Busan

Young Shin Textile Co., Ltd. Fabric dyeing processing Yangju Gyeonggi-do

Bomyung Industrial Co., Ltd. Poly blend / printed products www.bomyung.co.kr Ansan, Gyeonggi-do

Seong An Dyeing and Finishing Co., Ltd.

Mixed fabric, poly knit Seo-gu, Daegu

Hyundai Wool Textile Co., Ltd. Products with worsted and carded wool www.hyundaitex.co.kr Yangsan, Gyeongsangnam-do

Aztech WB 100% wool dyeing www.aztechwb.co.kr Saha-gu, Busan

Hyundai Special Print Co., Ltd. Printed goods www.specialprint.co.kr Siheung, Gyeonggi-do

Bukwang Co., Ltd. Mesh fabric www.bukwang.com Saha-gu, Busan

SungGwang Co., Ltd. Polyester fabric www.sunggwang.co.kr Jung-gu, Seoul

Seong-An High-twist polyester fabric www.startex.co.kr Songpa-gu, Seoul

Pucheon Co., Ltd. Light knitted and circular knitted fabric www.pucheon.co.kr Gangnam-gu, Seoul

Vision Land Natural fiber, synthetic fiber, soil release

processing www.visionland.co.kr Gangbuk-gu, Seoul

Youngpoong Filltex Skin plus processing www.filltex.com Guro-gu, Seoul

Ducksan EnterpriseOutdoor and active casual knitted

material www.ducksanbj.co.kr Seongdong-gu, Seoul

ShinheungFabric mixed with soft fiber and

memory fabricswww.monotex.co.kr Gangnam-gu, Seoul

Alpha FabricCOTTON-NYLON fabric, jacquard, special

post-processing www.alphafabric.co.kr Gangnam-gu, Seoul

Young Textile Weaving mixed fabric www.youngtex.com Gangnam-gu, Seoul

26FASHION

List of Organizations Related to Fashion Apparel

Company Name Website Major Roles

Korea Federation of Textile Industry

www.kofoti.or.krTo promote the growth and development of the textile industry by seeking ways to promote restructuring and enhance the competitiveness of the textile industry.

Korea Chemical Fibers Association

www.kcfa.or.krTo promote mutual partnership and benefits among member companies by promoting technology development, improvement of quality and productivity, and strengthening the global competitiveness of the Korean synthetic fiber industry.

Korea Textile Trade Association

www.textra.or.krTo respond to the government's policy for promoting the export of textiles and the sound development of the textiles and fabrics trade, and promote the common interests of members.

Spinners & Weavers Association of Korea

www.swak.orgTo expand demand for cotton products, carry out a joint purchase of parts and materials and joint maintenance of facilities, and provide domestic and overseas industrial trends surveys and data.

Korea Textile Development Institute

www.textopia.or.kr

To help Korean textile companies prepare for new trends and improve their competitiveness with application and process technology.

Korean Apparel Industry Association

www.kaia.or.krTo open up the overseas market of the fashion apparel export industry, implement global marketing for exporting goods, conduct global market research, and make a proposal to the government.

Korea Fashion Associationwww.

koreafashion.orgTo protect the interests of members in the high fashion industry and strengthen competitiveness of the Korean fashion industry.

Korea Research Institute for Fashion Industry

www.krifi.re.kr To strengthen the capabilities of the fashion industry, carry out R&D activities, and support companies.

Federation of Korea Knit Industry Cooperative

www.knit.or.kr To strengthen competitiveness of companies producing knitted items.

Korea Institute for Knit Industry

www.knitcenter.re.kr

To support R&D of SMEs, prototype production, fashion and design development, marketing, and incubation for the development of the knit industry.

Korea Sewing Technology Institute

www.sewtec.re.kr

To promote R&D in the sewing industry that integrates the IT field and support prototype production for sewing companies, and provide technical guidance and workforce training.

Korea Textile Machinery Association

www.kotma.orgTo build a system for collaborative research such as key development, development of an automated system, etc., while supporting R&D of small and medium-sized textile machinery companies.

KOTITI Testing & Research Institute

kotiti.re.krTo perform tasks such as test analysis, quality inspection, and R&D on textile products, environmental sanitation, and industrial materials.

Korea High Tech Textile Research Institute

www.koteri.re.krTo develop advanced key technology for the textile business, provide support to textile industry development, cultivate professional production and an operational workforce, support prototype production, and analyze and disseminate technical information.

Dyetec, Korea Dyeing & Finishing Technology

Institute

www.dyetec.or.kr

To develop cutting-edge processing technology in the dyeing processing sector, secure original technology, and provide enterprise-friendly research and development.

FITI Testing & Research Institute

www.fiti.re.kr

To provide comprehensive solutions ranging from tests, inspections, certifications, assessments, education, and consulting to research and development for industrial areas, including fashion apparel and consumer goods; the environment, such as water quality, air, and soil; and other industrial areas, such as automobile, architecture, and electrical and electronic materials, with its professional workforce and advanced testing equipment.

Korea Apparel Testing & Research Institute

www.katri.re.kr To perform test, inspection, and certification for the textile fashion industry.

Korea Color & Fashion Trend Center

www.cft.or.krTo provide key information for product development by collecting, analyzing, and distributing international information on color and systematically accumulating various data such as design and lifestyle.

Korea Garment Industry Cooperative

www.uniform.or.kr

To perform joint sale and joint purchase, provide bidding information, implement a mutual-aid project for small businesses, provide financial support, implement a new product development project, and make a proposal to the government, etc.

27 INDUSTRY OVERVIEW AND LOCATIONAL COMPETITIVENESS


II. BEAUTY

28BEAUTY

Overview and Status of the Industry

Definition of the Industry

Cosmetics are products applied to the human body for various purposes such as to clean, enhance features, and

maintain or improve the health of skin and hair, among others. It is defined as an object that is used on the body

with a mild impact.

•�� Cosmetics are distinguished from medicine and quasidrugs in that it would be difficult for people to expect

clear results from a short period of use. In 1999, the Korean government enacted the Korean Cosmetics Act and

distinguished cosmetics from pharmaceuticals.

Recently, as functional cosmetics continue to be developed, consumer demand for environmental friendliness

and high functionality, in addition to aesthetic factors and safety, has been increasing.

Status of the Industry

Status of the Global Market

The global cosmetics market, which represents the beauty industry, grew by 4.3% year on year to USD 259.8

billion in 2014 and is expected to grow to USD 330 billion by 2019. (Source: Datamonitor)

•�� Despite the sluggish global economy, the global cosmetics market continued to grow thanks to the high

growth in the Asian market, the expansion of the eco-friendly organic cosmetics market, increased interest in

skin care, and the growth of the men's cosmetics market.

Scale of the Global Cosmetics Market (USD billion)

2010 2011 2012 2013 2014 2015(e) 2016(e) 2017(e) 2018(e) 2019(e)

350

300

250

200

150

100

50

0

314330

299

260285

249231

272240

222

Source: Korea Health Industry Development Institute (KHIDI), Requoted from the Report on the 2015 Cosmetics Industry Analysis


By region, Europe accounted for 37% of the total market, followed by the Asia Pacific market with 32.1% and the

Americas with 28.2%.

•�� The US market stood at USD 38.7 billion (14.9%); China at USD 26.7 billion (10.3%); Japan at USD 23.5 billion

(9.0%); Germany at USD 15.5 billion (6.0%); Brazil at USD 15.2 billion (5.9%); France at USD 14.3 billion (5.5%);

and Korea at USD 7.4 billion (2.9%).

Scale of Cosmetics Market by Region (USD billion, %)

Region 2010 2011 2012 20132014 CAGR

(10–14)Market Size YoY

Europe 86.9 89.1 91.3 93.5 96.2 2.8 2.6

Asia/Pacific 67.7 71.2 74.9 78.8 83.3 5.7 5.3

North America/ Latin America

61.8 64.8 67.3 70.2 73.3 4.5 4.4

Middle East/ Africa 5.5 5.8 6.2 6.6 7.0 6.0 6.2

Total 221.9 230.9 239.7 249.0 259.8 4.3 4.0

Source: KHIDI, Report on the 2015 Cosmetics Industry Analysis

Status of the Korean Market

Domestic cosmetics production grew by more than 13% thanks to the continued expansion of exports and

rapid growth in the domestic market.

Production Trend of the Korean Cosmetics Industry (USD million, %)

2010 2011 2012 2013 2014

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

-

4,418 4,4965,279

CAGR 13.26,459

7,477

Source: The Bank of Korea, Input-Output Table, Annual

While cosmetics for basic skin care account for the largest portion of the cosmetics market, color cosmetics and

personal care products are growing significantly.

•�� For color cosmetics, cushion products continue to grow because of the rapid changes in trends and the

growing interest in color cosmetics among young people. In addition, the demand for point makeup products,

such as lip tint, lipsticks, and blush, is constant.

•�� The share of personal hygiene products is continuously growing because of the increasing interest in physical

beauty, regardless of gender. Most notably, there is a strong growth in men's care products (including shaving

cream, aftershave, etc.) and a steady rise in body cleansing products.

•�� On the other hand, the growth of functional cosmetics, which are between pharmaceuticals and cosmetics, is

30BEAUTY

prominent. Functional cosmetics, such as wrinkle reducing products, brightening products, and sunscreen, are

growing sharply with 41% of CAGR between 2010 and 2014 with a rising demand from busy consumers in the

modern era.

Trend in Korea's Cosmetics Production Structure (%)

Year Basic Skin Care Cosmetics

Color Makeup Products

Hair Care Products

Body Cleansing Products

Eye Makeup Products Others Total

2010 58.6 12.8 15.4 4.2 2.6 6.4 100.0

2011 61.3 11.7 15.3 4.1 2.6 5.1 100.0

2012 60.4 12.5 14.8 6.5 2.0 3.8 100.0

2013 56.7 14.1 15.3 7.6 2.1 4.3 100.0

2014 56.8 15.9 14.5 7.2 2.3 3.3 100.0

Source: Korea Cosmetics Association, Data on Production of Cosmetics, Annual

The cosmetics distribution structure is largely divided into the premium market consisting of department stores,

duty-free shops, and door-to-door sales, and the mid to low-end market including large discount stores, brand

shops, health and beauty shops, and home shopping and Internet shopping malls.

•�� The recent distribution of the cosmetics industry has been reorganized with the rapid emergence of home

shopping and online malls while brand shops are diminishing. The K-beauty craze, which has enabled new

companies to enter the Chinese market, is also contributing to the change.

•�� As online and home shopping users are increasing, latecomers, such as Aekyung, L&P Cosmetics, and Cover

Korea, grew sharply with their "hit products" on home shopping channels, threatening existing companies such

as Missha and Nature Republic, among others.

•�� The sales of Able C&C (Missha), a representative of the brand shops, was estimated to have declined slightly

from KRW 442.4 billion in 2013 to KRW 400 billion in 2016, while Cover Korea (A.H.C) grew rapidly from KRW

30.0 billion to KRW 400.0 billion for the same period.

Cosmetics sales grew at an annual average growth rate of 28.6% because of the impact of the Korean wave such

as K-beauty, while the import declined because of the domestic economic recession, which changed the country

to an exporter of cosmetics from an importer since 2014.

Korea's Export-Import Trend of Cosmetics (USD million, %)

ClassificationExport Import Trade Balance

2010 2016 CAGR 2010 2016 CAGR　 2010 2016

To Global Market 781 3,971 31.1 1,011 1,371 5.2 −230 2,599

China321

(41.1)1,450(36.5)

28.624

(2.4)49

(3.6)12.6 297 1,401

Hong Kong61

(7.8)1221(30.7)

64.80.7

(0.1)6.0

(0.4)43.1 61 1,215

Source: Korea International Trade Association, kita.netNote: ( ) refers to the share of the total export

•�� The export of cosmetics, which nearly reached 30% for the past five years, is attributed to the growth of imports

to China, Hong Kong, and Taiwan.


•�� In particular, the export of the Korean cosmetics to Hong Kong grew sharply as the country has no tariffs, VAT,

or commodity tax for all imported goods. It is also a tourist destination, with Chinese tourists accounting for

more than half of the total visitors, and serves as a gateway to China. Meanwhile, China continues to set stricter

standards in granting health certificates.

Status of Foreign Direct Investment in the Industry

Foreign investors continue to expand their stock holdings for KOSPI-listed cosmetics companies.

•�� The total market value of the stocks held by foreigners for eight cosmetics companies listed on the KOSPI is

KRW 15.26 billion based on the closing price on April 18, 2016, which is equivalent to 34.4% of the total market

capitalization of the eight companies (KRW 44.39 trillion).

- The share of the stocks held by foreigners for the eight companies: Amore Pacific (32.0%), LG Household &

Health Care (42.3%), COSMAX (17.0%), Kolmar Korea (46.2%), It’S SKIN (4.6%), TONYMOLY (0.9%), Hankook

Cosmetics (0.9%), Dongsung Pharmaceutical (3.8%), and so on.

- The aggregate market price for foreign ownership stocks for cosmetics companies listed on KOSPI jumped by

82.4% from KRW 8.29 billion as of January 2, 2015 to KRW 15.13 billion as of January 4, 2016.

Industry Competitiveness

Share of the Global Market

•�� The world market for cosmetics is expected to reach USD 259.8 billion for 47 countries in 2014, up 4.3% year

on year. (source: Datamonitor Personal Care Market Data, 2016)

- By country, the US accounted for 14.9% of the total market, followed by China with 10.3%, Japan with 9.0%,

Germany with 6.0%, Brazil with 5.9%, France with 5.5%, the UK with 4.6%, Italy with 4.0%, and Russia with 3.1%

and Korea with 2.9%, ranking 10th.

- The market size of Korean cosmetics is rising from 12th in the world in 2011 to 10th in 2014.

Technology Competitiveness

•�� Along with leading domestic brands like Amore Pacific at the frontline, Korean cosmetics are rapidly growing by

leveraging the sharp growth of Korea’s one-brand shops, promoting the development of hit items and product

innovation, fostering brands, targeting China and ASEAN markets, and improving a fast response to trends.

- In addition, Korean ODM companies, such as Kolmar Korea and Cosmax, are also experiencing a rapid growth

because of ODM orders from global cosmetics brands, product development, the emerging Chinese market,

and growing number of orders for Korean companies.

Industry Outlook

The global cosmetics market is expected to grow at a CAGR of 6.4% until 2020, while the domestic cosmetics

industry is also expected to witness fast growth.

32BEAUTY

•�� The global cosmetics market will grow from USD 460 billion in 2014 to USD 6.75 billion (KRW 785.16 trillion) by

2020 at a CAGR of 6.4%. (Source: Research and Market, 2015)

- With strengthening consumer awareness on beauty products, the Asia Pacific region is expected to lead the

cosmetics industry, accounting for 35% of the market, following Western Europe and North America.

•�� The Korean cosmetics industry is expected to continue its growth in the ODM and OEM markets while

alternative distribution channels, such as one-brand shops, online, mobile channels in addition to department

stores, and door-to-door sales, are developing.

- In particular, major domestic brands, such as Amore Pacific, LG Household & Health Care, and Able C&C, are

expected to grow continuously by enhancing their technological prowess, strengthening their premium

product line, launching new brands, and improving brand power to enter the Asian market such as China.

Locational Conditions and Benefits

Regional Status of Cosmetics Industry

The most concentrated area for the cosmetics industry is in the capital area where market and distribution

infrastructure is available; 64% of the total number of businesses and 60% of the total number of workers are

located in the area.

•�� The Gyeonggi-do has the largest number of companies and employees, each taking up 37% of the national

cosmetics market.

•�� Chungcheong-do is the second largest cosmetics market in Korea, with its share of 11% and 23% in the number

of companies and employees, respectively. In particular, in Chungcheongbuk-do, 7% of the companies and

15% of the workers are located.

Conditions and Benefits of the Cosmetics Industry Locations

Chungcheongbuk-do is home to many leading cosmetics companies. In December 2015, the local development

committee decided to establish a complex specializing in cosmetics in Jincheon, Chungcheongbuk-do.

•�� In addition, the area is emerging as a base for cosmetics production as the Global Cosmeceutical Center in

Osong, Chungcheongbuk-do, will launch in April 2017, and the Chungbuk Cosmetics Promotion Center will be

established by 2018. *Osong Global Cosmeceutical Center: It will take charge of overseas export and import certification by conducting R&D and clinical tests for new materials and antiaging cosmetics, accessing and testing the safety of functional cosmetics of the venture SMEs in Chungcheongbuk-do. *Cosmetics Promotion Center: It will house office and research space for 30 venture companies and GMP (Good Manufacturing Practice, standard for good manufacturing and management of food and drug) facilities for basic care, color cosmetics, and hair care products.

34BEAUTY

Government Policies and Incentives

Project to Develop Specialized Global Technology

The purpose of this project is to develop small and medium-sized enterprises with technological innovation

capacity into specialized global companies by supporting the short-term development of key industrial

technologies.

Most notably the project seeks to develop specialized technology for the creative industry by upgrading the

consumer goods industry. It also aims to advance the life and consumer goods industry and promote exports by

upgrading household and consumer products and developing technologies related to export business models. * Development of premium household goods: supporting R&D, such as creating convergent products and export business models, to enhance product value and marketability for major items in the daily living industry. ※Living industry: furniture, stationery, glasses, watches, jewelry, leisure goods, bags, kitchenware, beauty products, etc. * Convergence alliance: Supporting a convergence technology development project discovered by operating the Convergence Alliance Division of the Living Industry. * Global premium goods for living: Supporting a technological advancement project selected in a contest among the companies designated as producers of high-end goods for living.

Regulatory Reform Measures

The Korean government has laid out regulatory reform measures to promote foreign investment (May 5, 2015).

In particular, it selected 12 industries, including cosmetics, pharmaceuticals and food, as promising sectors for

investment and identified tasks to improve regulations and systems.

To maximize the effect of the Korean Wave, the government has implemented a plan to establish a base for

highly functional and expensive products. It abolished the requirement to submit medical certificates, such as

the CEO's medical certificate for mental illness, when registering cosmetics business (Cosmetics Act revised, since

2015). The related law required cosmetics manufacturing businesses to submit a medical certificate certifying

that the CEO of the company is not mentally ill or a drug abuser, when registering the business. If the foreign

CEO does not reside in Korea, it is difficult to issue a medical certificate, hindering the company from registering

its business (a foreign doctor's medical certificate is not accepted).

The revised law expands the scope of functional cosmetics (e.g., atopy, etc.), and downgrades the level of the

law to a lower-class regulation to ensure flexibility (Law -> Enforcement Regulation, since 2015). The current

Cosmetics Act restricts functional cosmetics to three areas of whitening, wrinkle reduction and ultraviolet

protection (Article 2 of the Cosmetics Act). This led to many difficulties in developing new products or premium

products in the functional cosmetics area. The law also exempts functional cosmetics for export from the

functionality test. Test exemption of functional cosmetics is included in the list of exemptions for cosmetics,

particularly for exports (Article 30 of the Cosmetics Act revised, since 2015).


Cosmetics exclusively for exports are exempted from certain duties (Cosmetics Act, Articles 8–16) and are subject

to the regulations of the importing country. However, functional cosmetics were not exempted from screening.

Even though these products are exclusively for export, they were subject to a functionality test following

domestic regulations, resulting in delayed export and excessive cost. Before the revision, it took a long time for

the concerned authority in charge to review the evaluation report on certain functional cosmetics for their safety

and efficacy. After the result, the processing time was reduced when submitting a report on functional cosmetics

and shortened the time for implementation after submission. (May 2015).

Applicable Laws and Regulations

Following laws stipulate matters concerning the manufacturing, import, and sales of cosmetics

Chemical Control Act.

•�� The purpose of the act is to protect the lives, property, or the environment of all people from chemical

substances by preventing harmful effects on public health and the environment from occurring, managing

chemical substances appropriately, and promptly responding to accidents caused by such substances.

Act on the Registration and Evaluation of Chemical Substances

•�� The purpose of the act is to protect the health of the people and the environment by defining details on the

registration of chemical substances, examination, evaluation of products containing chemical and hazardous

chemical substances, and designation of hazardous chemical substances, and allowing the people to produce

or utilize the information on chemical substances.

Other regulations on cosmetics

•�� Regulations on Cosmetics Labeling and Advertising Demonstration

•�� Regulations on Examination of Functional Cosmetics

•�� Cosmetic Safety Information Management Regulations

•�� Standards for Manufacturing Excellent Cosmetics and Quality Control

•�� Guidance on Cosmetics Price Indication

•�� Regulations on Reporting on Production and Import of Cosmetics and Raw Material List

36BEAUTY

Cost

Price and Workforce Supply

The share of labor costs out of the gross output in the cosmetics industry was low at 5.3% in 2014, but the share

of the added value is 58% of the gross output.

•�� The share of the main production cost out of the gross output in the cosmetics industry accounted for 41.3%,

while the largest portion of the main production cost was the raw material cost, accounting for 87.1% of the

total.

•�� Among the elements of the main production cost, raw material cost accounted for the largest portion (87.1%),

and outsourced processing cost accounted for 11.3%.

Production Cost Structure of the Cosmetics Industry (2014) (USD million, %)

Classification Gross OutputAdded Value

Major Production CostLabor Cost

Cost structure 7,372 (100.0) 4,329 (58.7) 389 (5.3) 3,043 (41.3)

Source: Statistics Korea, Mining and Manufacturing Survey, for companies with more than 10 peopleNote: ( ) refers to the share of the gross output

Major Production Cost Structure of the Cosmetics Industry (%, USD million in parenthesis)

ClassificationMajor

Production Cost

Raw Material cost Fuel Cost Electricity

Cost Water CostOutsourcedProcessing

Cost

Repairing Cost

Proportion 100.0 (3,043) 87.1 0.3 0.6 0.2 11.3 0.5

Source: Statistics Korea, Mining and Manufacturing Survey, for companies with more than 10 people

The share of the sales cost to sales for the cosmetics manufacturing companies accounted for 40%, and the share

was gradually dropped to 39.5% in 2015, after reaching 43.6% in 2011.

•�� In particular, the share of cosmetics sales cost has been on the rise along with the growth in the domestic

cosmetic production, but it dropped as the sales increased faster due to the improving business performance

of domestic cosmetics.

Share of Sales Cost to Sales in Cosmetics Industry (%)

Classification 2010 2011 2012 2013 2014 2015

Cost to Sale ratio 40.4 43.6 42.2 41.6 41.6 39.5



Cost-to-Profit

The operating profit to sales of the cosmetics industry has steadily risen from 13.5% in 2010 to 15.3% in 2015, leading to a marked improvement in profitability.•�� The improvement in profitability of domestic cosmetics is attributable to steady development of the products

and stable growth of overseas businesses such as in China.

Trend in Operating Profit Margin to Sales for the Cosmetics Industry (%)

Classification　 2010 2011 2012 2013 2014 2015

Operating profit 13.5 13.2 13.2 11.3 12.7 15.3


Meanwhile, the profitability of the cosmetics market in Korea depends heavily on price structure (Source: Korea Distribution Map).•�� Looking at the cosmetics price structure, distributors' sales commissions account for as much as 40% of the

consumer price. When another 25% for advertising and promotional expenses are added, distribution and marketing expenses account for a whopping 65%. •�� In addition, according to data released by the Korea Fair Trade Commission, the sales commissions for the

cosmetics in the department stores are up to over 35%, while those in the duty-free shops account for more than 55% including a broker's fee. •�� In the case of large-sized marts, sales commissions are usually 20%–30%, but vendors' fee, which is normally

7%–10%, is added additionally, while TV home shopping requires about 38% of the sales commissions, resulting in weak profitability for small and medium businesses.

Success Cases of Foreign Investment

Kolmar Korea

On May 15, 1990, KM Korea Co., Ltd. was established as a joint venture with Kolmar Japan Co., Ltd. It then

changed its name to Kolmar Korea in December and registered as a foreign invested company in January 1991.

•�� What drove the joint venture with Kolmar Japan is its R&D capacity. The company invests around 6% of its

annual sales in R&D, sharing technology with the Kolmar Group in the US and Japan. As a result, it has raised its

R&D power to the world-class level.

38BEAUTY

Kolmar Korea was granted a quasidrug manufacturing license in 1992 and was selected by the Ministry of Health

and Welfare in 1994 as a company that meets the CGMP (Standards for Manufacturing Excellent Cosmetics and

Quality Control).

•�� It was listed on the KOSDAQ in 1996, completed the electrical factory in 1997 (color cosmetics), and was selected as a promising export company by the Small and Medium Business Corporation in 1998. It also obtained a patent on manufacturing method and device for multicolored bar-shaped cosmetics.•�� In 2001, it received ISO 9001 certification, and was approved as KGMP (excellent pharmaceutical manufacturing

and quality control standard) compliant company in 2002. In 2007, it established a Chinese corporation. Afterward, it acquired Ecocert certification from the International Organic Certification Authority and LOHAS certification from Korean Standards Association in 2009.•�� In 2010, it was awarded the grand prize in the Korean premium brand technology development category,

and in 2011, it received ISO 22716 International Excellent Cosmetics Manufacturing and Quality Management Certification.

Kolmar Korea has started to make cosmetics through the ODM (Original Development Manufacturing) method, escaping from production by simple subcontractors when OEM production was stabilized to a certain point.•�� It is evaluated as having competitiveness in R&D, planning, design, etc.•�� Kolmar Korea's main business areas in Korea include cosmetics and pharmaceuticals, supplying its products to

160 leading companies locally and abroad including LG Household & Health Care, Amore Pacific, US Johnson & Johnson, Herbal Life, and more.

Kolmar Korea recorded sales of KRW 535.8 billion in 2015, an increase by 16.1% year on year, while the operating profit was KRW 60.7 billion, up by 29.6% year on year. •�� Kolmar Korea has started a new plant in Sejong in June 2016 and started to receive new orders from overseas

clients. As the equipment verification process by major makers is completed in order, its export is expected to increase further.

40BEAUTY

List of Related Companies and Associations

List of Companies Related to Cosmetics


Amore Pacific Co., Ltd. Total cosmetics www.amorepacific.com Jung-gu, Seoul

LG Household & Health Care Co., Ltd. Total cosmetics www.lgcare.co.kr Jongno-gu, Seoul

The Face Shop Co., Ltd. Total cosmetics www.thefaceshop.com Jongno-gu, Seoul

Innisfree Co., Ltd. Total cosmetics www.innisfree.co.kr Yongsan-gu, Seoul

Kolmar Korea Co., Ltd. Total cosmetics www.kolmar.co.kr Seocho-gu, Seoul

Aekyung Co., Ltd. Total cosmetics www.aekyung.co.kr Guro-gu, Seoul

Able C&C Co., Ltd. Total cosmetics www.able-cnc.co.kr Geumcheon-gu, Seoul

CJ Olive Networks Co., Ltd. Total cosmetics www.cjolivenetworks.co.kr Seongnam, Gyeonggi-do

Atomy Co., Ltd. Total cosmetics www.atomy.kr Gongju, Chungcheongnam-do

Nuskin Korea Co., Ltd. Total cosmetics www.nuskinkorea.co.kr Gangnam-gu, Seoul

Etude Co., Ltd. Total cosmetics www.etude.co.kr Jung-gu, Seoul

Nature Republic Co., Ltd. Total cosmetics www.naturerepublic.com Gangnam-gu, Seoul

Cosmax Co., Ltd. Total cosmetics www.cosmax.com Seongnam, Gyeonggi-do

It'S SKIN Co., Ltd. Total cosmetics www.itsskin.co.kr Gangnam-gu, Seoul

TONYMOLY Co., Ltd. Total cosmetics www.etonymoly.com Seocho-gu, Seoul

Skin Food Co., Ltd. Total cosmetics www.theskinfood.co.kr Seocho-gu, Seoul

Boryung Medience Co., Ltd.Baby products, Total cosmetics

www.medience.co.kr Jongno-gu, Seoul

HLMC Co., Ltd. Total cosmetics www.hlmc.co.kr Gangnam-gu, Seoul

Cos Vision Co., Ltd. Total cosmetics www.cosvision.com Suwon, Gyeonggi-go

Johnson & Johnson Co., Ltd. Total cosmetics www.jnj.com Yongsan-gu, Seoul

List of Associations Related to Cosmetics

Name Website Major Role

Korea Cosmetic Association www.kcia.or.krTo perform R&D, reform laws and regulations, and support the development of cosmetics-related technologies and international competitiveness to contribute to the development of the cosmetics industry.

Korea Health Industry Development Institute

www.khidi.or.krTo enhance the international competitiveness of the health industry and improve the public health by performing projects to improve the health industry and health services professionally and systematically.

Korea Specialty Chemical Industry Association

www.kscia.or.krTo implement R&D to develop the fine chemical industry and international agreements in the chemical field.

Korea Cosmetic Industry Cooperative

www.kcic.or.krTo implement joint projects in the cosmetics industry, such as joint purchase, joint selling, and common brand business, and provide support for members to help their business management.

Korea Pharmaceutical Test & Research Institute

www.kptr.or.krTo ensure the stability in quality and establish the distribution order through self-quality control for medicines and cosmetics.

Korea Testing & Research Institute

www.ktr.or.krTo perform comprehensive examination, certification, and technical consulting for all industries.

Dema Pro www.demapro.co.krTo evaluate the safety and efficacy of cosmetics, hair products, quasidrugs, and beauty functional food related to the human skin as a professional dermatology test agency.

IEC Korea www.ieckorea.co.kr

To improve quality and productivity, complement and reduce various risk factors, and review and provide certification services in conjunction with international organizations to ensure international regulatory compliance and sustainable business management.

Ellead www.ellead.comTo evaluate and analyze safety of cosmetics, quasi-drugs, household goods and perform a clinical research.

41 RELATIONSHIP WITH OTHER INDUSTRIES

APPENDIX RELATIONSHIP WITH OTHER INDUSTRIES

42FASHION & BEAUTY

Distribution Industry

Fashion and cosmetics are considered as final consumer goods and have a close relationship with the

distribution industry. They are both expected to observe rapid growth as sales through online channels

continues to rise despite the sluggish distribution market caused by the economic recession and the slowed

trend in consumption.

•�� Online sales have grown at a CAGR of 9.7% over the past five years, leading the growth in the retail sales of

clothing. In 2015, they grew by 14.6% year on year, representing a fast growth rate.

•�� In particular, out of online purchases, purchase via mobile grew by a staggering 55.7% YoY in 2015, emerging as

a hub of the fashion distribution.

•�� On the other hand, the share of the conventional markets, such as department stores, and traditional markets in

the distribution showed a downward trend.

List of Distribution Companies

Category Name Website Location

Department stores

Lotte www.lotte.com Jung-gu, Seoul

Shinsegae www.shinsegae.com Jung-gu, Seoul

Hyundai www.ehyundai.com Gangnam-gu, Seoul

Large-sized marts

Emart www.emartcompany.com Seongdong-gu, Seoul

Homeplus corporate.homeplus.co.kr Gangseo-gu, Seoul

Lotte Mart company.lottemart.com Songpa-gu, Seoul

Shopping centers

Save Zone www.savezone.co.kr Nowon-gu, Seoul

Central City www.centralcityseoul.co.kr Jung-gu, Seoul

Times Square www.timessquare.co.kr Yeongdeungpo-gu, Seoul

IFC Mall www.ifcmallseoul.co Yeongdeungpo-gu, Seoul

Garden 5 www.garden5.com Songpa-gu, Seoul

Techno Mart www.tm21.com Gwangjin-gu, Seoul

Premium outlets

Lotte Premium Outlet www.lotteoutlets.com Jung-gu, Seoul

Hyundai Premium Outlet www.ehyundai.comGimpo,

Gyeonggi-do

Shinsegae Premium Outlet

premiumoutlets.co.kr Gangnam-gu, Seoul

Open markets

Gmarket www.gmarket.co.kr Gangnam-gu, Seoul

Auction www.auction.co.kr Gangnam-gu, Seoul

11th Street www.11st.co.krSeongnam,

Gyeonggi-do

Interpark www.interpark.com Gangnam-gu, Seoul

Social commerce

WEMAKEPRICE www.wemakeprice.com Gangnam-gu, Seoul

Coupang www.coupang.com Gangnam-gu, Seoul

Ticket Monster www.ticketmonster.co.kr Gangnam-gu, Seoul

Shocking Deals deal.11st.co.kr Seongnam, Gyeonggi-do

43 RELATIONSHIP WITH OTHER INDUSTRIES

Category Name Website Location

Integrated shopping mall

GS SHOP www.gsshop.com Yeongdeungpo-gu, Seoul

Lotte.com www.lotte.com Jung-gu, Seoul

CJmall www.cjmall.com Seocho-gu, Seoul

Hyundai Hmall www.hyundaihmall.com Gangdong-gu, Seoul

Shinsegae Mall shinsegaemall.ssg.com Jung-gu, Seoul

AK Mall www.akmall.com Seongnam, Gyeonggi-do

Home&Shopping www.hnsmall.com Mapo-gu, Seoul

Apparel shopping mall

Stylenanda www.stylenanda.com Mapo-gu, Seoul

Naning9 www.naning9.com Jongno-gu, Seoul

Imvely www.imvely.com Geumcheon-gu, Seoul

Niponjjuya niponjjuya.com Seo-gu, Incheon

Bagazimuri bagazimuri.com Gangnam-gu, Seoul

Aura-J www.aura-j.kr Gangnam-gu, Seoul

Supporting foreign investors worldwide

Headquarters

Address 13, Heolleung-ro, Seocho-gu, Seoul, Republic of Korea

Tel (82-2) 1600-7119 Fax (82-2) 3460-7920

E-mail [email protected]

Homepage www.investkorea.org

NORTH AMERICA

New York, USATel (212) 826-0900E-mail [email protected]

Los Angeles, USATel (323) 954-9500E-mail [email protected]

Chicago, USATel (312) 644-4323E-mail [email protected]

Dallas, USATel (972) 243-9300E-mail [email protected]

Washington D.C., USATel (202) 857-7919E-mail [email protected]

Silicon Valley, USATel (408) 432-5000E-mail [email protected]

Detroit, USATel (248) 619-1601E-mail [email protected]

Vancouver, CanadaTel (604) 683-1820E-mail [email protected]

Toronto, CanadaTel (416) 368-3399E-mail [email protected]

EUROPE

Frankfurt, GermanyTel (49-69) 2429-920/9E-mail [email protected]

Hamburg, GermanyTel (49-40) 3405-740E-mail [email protected]

Munich, GermanyTel (49-89) 2424-2630E-mail [email protected]

Paris, FranceTel (33-1) 5535-8888E-mail [email protected]

London, U.K.Tel (44-20) 7520-5300E-mail [email protected]

Brussels, BelgiumTel (32-2) 205-0089E-mail [email protected]

Milan, ItalyTel (39-02) 79-5813E-mail [email protected]

Zurich, SwitzerlandTel (41-44) 202-1232E-mail [email protected]

Stockholm, SwedenTel (46-8) 30-8090E-mail [email protected]

Copenhagen, DenmarkTel (45) 3347-7221E-mail [email protected]

Amsterdam, NetherlandsTel (31-20) 754-6903E-mail [email protected]

Vienna, AustriaTel (43-1) 586-3876E-mail [email protected]

Madrid, SpainTel (34-91) 556-6241E-mail [email protected]

ASIA & OCEANIA

SingaporeTel (65) 6426-7200E-mail [email protected]

Sydney, AustraliaTel (61-2) 9264-5199E-mail [email protected]

Melbourne, AustraliaTel (61-3) 9860-0500E-mail [email protected]

Tokyo, JapanTel (81-3) 3214-6951E-mail [email protected]

Osaka, JapanTel (81-6) 6262-3831E-mail [email protected]

Nagoya, JapanTel (81-52) 561-3936E-mail [email protected]

Fukuoka, JapanTel (81-92) 473-2005E-mail [email protected]

Beijing, ChinaTel (86-10) 6410-6162E-mail [email protected]

Shanghai, ChinaTel (86-21) 5108-8771/2E-mail [email protected]

Guangzhou, ChinaTel (86-20) 2208-1600E-mail [email protected]

Qingdao, ChinaTel (86-532) 8388-7931/4E-mail [email protected]

Hong Kong, ChinaTel (852) 2545-9500E-mail [email protected]

Taipei, TaiwanTel (886-2) 2725-2324E-mail [email protected]

MIDDLE EAST

Dubai, United Arab EmiratesTel (971-4) 450-4360E-mail [email protected]

INVEST KOREA'SGLOBAL NETWORK

You want to do business in Korea but don’t know where to start. Where should you turn? Invest Korea.

As the national investment promotion organization of Korea, Invest Korea helps foreign companies

enter the Korean market. It offers a free one-stop service that includes a wide range of pre-investment,

investment and post-investment support, with offices located around the world.

Contact the Invest Korea office nearest you or visit our website (www.investkorea.org)

Global Link to Success, Invest Korea

www.investkorea.org13, Heolleung-ro, Seocho-gu, Seoul, Republic of Korea (137-749) Tel (82-2)1600-7119 Fax (82-2)3460-7920

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