Information contained in this report relies heavily on sources that may or may not include various government publications, opinions of industry experts, and unofficial Embassy estimates. Statistical data originate from a variety of sources including Government Census surveys, trade reports, industry associations and trade publications. All figures referenced throughout the report are provided in U.S. dollars.
OVERVIEW:
The Korean apparel market continues to recover from
the country s economic crisis, which had resulted in a sharp
decline in sales in 1997 and 1998. At the same time, although
Korea's strong economic recession during this period impacted
most of the population, most relatively well-off consumers were
able to continue their purchases of high-end items, resulting in
the continued expansion of high-end clothing sales. With the
continuing economic recovery and return of consumer confidence,
the growth in sales of more-expensive, high-end apparel will
accelerate. Local apparel firms and manufacturers, following
this trend, are reshaping their product lines in order to target
this market. End Summary.
Market Overview: Due to the 1997-98 economic crisis, the size
of the Korean apparel market contracted 5.7 percent, from USD
15.8 billion in 1997 to USD 14.9 billion in 1998. With the
country s economy recovery beginning and its economic
restructuring process starting to bring positive results, the
Korean apparel market segment is expected to expand by over 10
percent in 2000. The young casual wear segment, with sales of
USD 3.8 billion in 1998, was the leading market segment,
registering 25.4 percent of total apparel sales, followed
closely by women s wear with 1998 sales totaling USD 2.7 billion
(23.8 percent of the market). The men's wear segment accounted
for 18.4 percent of total apparel sales, followed by children s
apparel sales and inner wear, which accounted for 10.8 percent
and 10.4 percent, respectively. Miscellaneous market segments
accounted for the remaining 11.2 percent.
3.Korea s apparel market steadily expanded from 1988,
contracting only in late 1997 and through 1998, with the onset
of the economic recession. As depicted in the following tables,
the three major market segments, men s wear, women s fashion and
young casual wear, showed vigorous sales growth until 1998.
Men s wear sales increased 294 percent, from USD 1,016 million
in 1991 to USD 2,989 million in 1997. At the same time, the
women's wear market segment expanded by 185 percent, while young
casual clothing sales grew 179 percent. The economic recession
led to a reversal in this steady growth. In 1998, shipments in
the men's wear segment dropped 8.3 percent, women s wear sales
were off 0.3 percent while young casual clothing sales declined
1.5 percent from the previous year. As Korea's economic
recovery continues, the apparel market is expected to resume the
brisk growth it exhibited before the recession.
Men s Wear Market
Year Value (USD million)
Annual Growth Rate (%)
1991 1,016 125.8
1992 1,229
120.0
1993 1,639
133.4
1994 2,113
128.9
1995 2,620
124.0
1996 2,953
112.7
1997 2,989
101.2
1998
2,744 91.8
Women s Wear Market
Year Value (USD million)
Annual Growth Rate (%)
1991 1,479
124.7
1992 1,770
119.7
1993 2,259
127.7
1994 2,698
119.4
1995 3,092
114.6
1996 3,445
111.4
1997 3,562
103.4
1998
3,550 99.7
Young Casual Market
Year Value (USD million)
Annual Growth Rate (%)
1991 1,358
120.4
1992 1,649
121.4
1993 1,952
118.4
1994 2,349
120.3
1995 2,854
121.5
1996 3,472
121.7
1997 3,847
110.8
1998
3,788 98.5
Source: Korea Trade Information Services, 1999
4.Market Analysis: While total sales in the Korean apparel
market showed a sharp decline in 1997 and 1998, sales of
high-priced garments continued their steady climb. Korean
manufacturers, having misjudged consumer preferences, were
carrying excessive inventories of lower-priced garments, and
with the onset of the 1997-98 economic recession, sharply cut
back on production. But, despite the sharp economic downturn,
the growth in sales of more-expensive garments continued to
increase, as wealthy consumers generally were able to continue
purchasing high-end garments, including imported brand-name
fashions. This trend can be seen in sales of men s business
suits, which fell 25.4 percent during this period, while
lower-priced business apparel sales were down by 5.8 percent.
At the same time, however, sales of more expensive business
attire increased by 8.4 percent.
While Korean manufacturers of high-quality fashions are starting
to take advantage of this market trend, large Korean apparel
manufacturers, including LG Fashion, Kolon, Shinwon, Nasan, and
Cheil Textile, plan to target Korea s high-priced apparel
market. The Tongdaemun wholesale and retail market district is
rapidly emerging as a distribution center for imported
clothing. In this vast and busy marketplace, approximately 800
import shops, handling boutique and designer brands, were active
in 1999.
The near-term outlook for casual wear imports also looks very
good. Sales of high-priced textile garments and imports will
rapidly expand because of renewed consumer confidence and
continued preference for higher-quality clothing. Most growth in
casual wear imports will be in well-known luxury brands like
Levi, Calvin Klein Jeans, DKNY, and Polo Jeans.
5.Conclusion: With the beginning of Korean's economic recovery,
the country's apparel market trends indicate a more favorable
import and investment climate for American apparel manufacturers
and suppliers. Accordingly, increased market opportunities are
emerging for foreign apparel suppliers that can offer high
quality name-brand clothing to Korean customers. U.S. exporters
looking to sell to the Korean market should consider this an
excellent time to take advantage of Korea s economic recovery.
