Korea's corporate organization in a report Tuesday recommended that local services firms find growth outlets in China, laying out four specific strategies to improve their chances of success.
The Korea Chamber of Commerce and Industry (KCCI) advised Korean companies to look closely into Chinese markets for children, the aging generation, the rich and broadcasting content to land strong in a country with an economy being reshaped around the services industry that has been growing at an annual rate of 17 percent for the past 10 years.
The report gives a bleak picture of Korea's own services sector as it is now, its expansion diminished from 15 percent to 4 percent over the past five years and its role in the national economy stagnant since 2010.
In China, the kids' market is expected to boom after the government lifts its one-child policy for the first time in 35 years. Up to 25 million newborns are possible next year alone, according to the KCCI report.
At the other end, the silver industry is also likely to create special demand as China's population of 65 and older is projected to increase to approximately 300 million by 2035, more than double the current 130 million, the report said, adding Japan has already taken notice and is making market moves.
The business organization also recommended making inroads into the market for the wealthy, honing in on Beijing, Shanghai and other Chinese provinces with heavy concentrations of rich residents stocked with disposable income. The report cited the success of a Korean apparel company that catered specifically to rich Chinese clientele.
Lastly, the KCCI report said Korean companies need to establish partnerships with their Chinese counterparts to reach into the broadcasting content market. An example would be the recently aired Korean drama "Descendants of the Sun," planned jointly with a Chinese production company. The partnership helped the drama pass Chinese regulatory scrutiny and hit 2.5 billion views in China.
"In order to enter the Chinese market, companies need to input a lot of time and effort," said Chun Soo-bong, head of the economic research division at the KCCI. "They need the strategy of seizing potential demand by investing in untapped services markets that promise big expansions." (Yonhap)
