With the uncertainty of what a Donald Trump presidency will do for Korean companies, Korea needs to have a “plan B”. That “plan B” needs to be with China. Korea already has a great trade relationship with China but that could grow even more under a Trump presidency. So why is China the perfect market for Korean startups to target?
First off China loves Korea. More Chinese tourists come to Korea than Japanese tourists. Chinese tourists account for more than 35% of all total visitors coming into Korea. They love Korean fashion, beauty, and culture. South Korea has seen the number of Chinese tourists coming to Korea during the holiday seasons increase year after year. From 2015 to 2016 the number of Chinese tourists has increased by 23%. The data is taken from the amount of China issued credit cards purchases which totaled $419.9 million between mid-September to mid-October. This does not take into account the cash used which could be an additional $300 million. The biggest week is during China’s National Holiday season which goes from October 1st – 7th.
The South Korean government has been promoting to China heavily during these peak days, even running nationwide shopping events with discount promotions and live K-Pop performances.
So why does China spend so much money in Korea? Korea has become the “new Japan”, the new land of cool. Korea offers something different for Chinese people looking to get away from their busy cramped lives. Korea offers clean streets, a close destination, great food, and more than anything the latest in pop-culture. Pop-culture from music to fashion to movies and television, China just can’t get enough of it. Sure Chinese tourists come for the big brand names but they also come for very relevant local Korean brands that are hot at the moment.
This is great news for Korean startups in the beauty/fashion space. Compared to Japanese tourists that like to spend a lot on high-end accommodations, Chinese tourists spend less on accommodation and more on retail. As long as Korean culture continues to influence consumers in China, there won’t be a decrease in the amount of Chinese tourists coming into Korea.
This is why Korean startups need to start catering to the Chinese market. They need to somehow incorporate the Korean wave into their products or services to attract the Chinese market. Building a better relationship with China should be Korean startups #1 priority moving forward.