At a recent Alberta-Korea Business Session hosted by the Government of Alberta, Han Changyun, Director & Trade Commissioner of the Korea Trade-Investment Promotion Agency KOTRA, made an unexpected suggestion: bring A&W to South Korea.
Building on opportunities provided by the newly enforced Canada-Korea Free Trade Agreement (CKFTA – see previous post), Mr. Han shared some interesting insight into Korean trends that a business savvy individual can take advantage of.
As the third largest economy in Asia behind only China and Japan, trends in South Korean food consumption are changing from traditional diets to more westernized ones. Recognized as a nation predominantly concerned about their health and well-being, South Korea surprisingly registered the fastest growth in burger fast food chains with an 8% rise in outlet numbers and 12% value increase (Euromonitor). “Though fast food is generally known to be bad for health, its market is increasing every year in Korea” the Commissioner affirmed.
Due to the ongoing socio-economical shifts, which includes the rise of an affluent consumer group, a well-travelled/educated young generation, the urbanization and adoption of new information technology combined with the busy lifestyle of Koreans; products and businesses that offer good value with new tastes and a convenience factor, are naturally showing stronger growth in the food market.
Taking into consideration A&W’s guarantee that their ingredients are of the highest standards – beef raised without the use of hormones or steroids, Mr. Han believes the possibility of success for the Canadian fast food chain will depend on the marketing approach and business strategy. “If A&W can differentiate themselves from McDonald’s, Burger King and Lotteria (who currently have a strong foothold in the market) with a distinctive feature, it is plausible to attract and be accepted by the Korean customers.” He suggests introducing high quality and good value products with an emphasis on the organic, eco-friendly and naturally grown aspects, while catering to the tastes of the Korean market – for instance, using highly marbled meat for the patty versus lean ground beef. Finally, Mr. Han recommends businesses to “look for a Korean partner who is familiar with the Korean fast food market” as a possible entry strategy.
So will these comments spur a move by A&W or other similar franchises into the Southern Korean Peninsula? We can only wait to see. Regardless, the trade liberalization of the CKFTA certainly introduces more opportunities to explore and develop for both Canada and South Korea.