Korean consumers’ interest in furnishing and decorating their homes is growing rapidly and becoming increasingly more sophisticated. Driven by the increasing number of single households, income growth, and a new social trend to spend more time at home, Korea’s furnishing market value has doubled over the past five years to 8 billion GBP and is projected to reach 12 billion GBP by 2023. Seeing the enormous opportunity in this space, prominent foreign brands, such as IKEA, Miniso, Flying Tiger Copenhagen, Niko, H&M Home, and Zara Home, have recently opened stores in Korea.
Hygge: Changing Lifestyles & Perceptions
The word ‘Hygge,’ meaning ‘comfort’ in Danish, is often used to explain the growing demand for home furnishing in Korea. After years of accepting notoriously long working hours, Koreans are now placing more emphasis on a better work-life balance than ever before. This change in lifestyle has in turn transformed how Koreans view their home – as a cherished place for rest and quality time rather than just an asset. As such, Korean consumers find ‘comfort’ in purchasing home furnishing items and decorating their homes. Another notable trend is that Koreans no longer see furniture as a one-time investment or a permanent fixture, but rather as a trend-driven fashion item, which will likely lead to a higher volume of sales in furniture.
Single-Person Households Drive Growth
Due to the rise of single-person households in Korea, small-sized and multi-purpose furniture that can fit into small single household homes is in high demand. Korean single households of people in their 20s and 30s, trend-conscious and active on social media, are driving this trend with a 478% increase in spend on such items between 2015 and 2016. Koreans in their 20s and 30s accounted for 62% of the total home furnishing purchases in 2016, compared with 53% in 2014. To meet this exponential growth in demand, market players have been focusing on designing mobile furniture as well as new products that are both multi-functional and smaller in size.
Importance of Social Media
The growing interest in home furnishing in Korea is clearly evidenced by the large amount of related content online. There are over 3 million hashtags on keywords such as ‘interior,’ ‘interior items’ and ‘home furnishing” on Instagram at any given time. This consumer frenzy is also fed by more online TV shows, online portal sites and blog articles about the subject. These online channels broadcast ‘Do-It-Together’ or ‘DIY’ activities whereby consumers can learn home furnishing know-how and assemble products themselves.
Retailers Tap into the Lucrative Opportunity
Generally Korean retailers, department stores in particular, do not operate on a wholesale basis. This means that foreign companies often need an in-market distributor to sell their products through retail channels like department stores. However, an increasing number of Korean retailers have recently been entering into distribution partnerships directly with global home furnishing companies to make most out of the lucrative opportunity. The recent partnership between Hyundai Department Store Group and Williams-Sonoma, Inc. is the case in point: Hyundai signed an exclusive deal in which four of Williams-Sonoma brands could be sold through Hyundai’s online and offline channels. Prior to this, Hyundai Department Store Group also merged with Hyundai Livart, the second largest furniture manufacturer in Korea, while Lotte Shopping, which holds a number of retail business entities including Lotte Department Store, also opened its own multi-brand store, ‘Eli’den,’ that directly sources all of its home furnishing products from overseas.
Opportunities for UK Companies in Home Furnishing
Home furnishing in Korea is an attractive market for many foreign companies. Given the growing demand for European home furnishing products, UK firms in this industry have plenty of opportunities in the Korean market. Furthermore, the Korean government’s mandate to rebuild aged apartment complexes over 30 years old should see the demand for home furnishing products grow and homes are re-built with more consideration for furniture placement. As major local retailers are now also acknowledging this trend by distributing foreign products directly through their existing stores, UK home furnishing brands should see a wider window of opportunity available in the market.
To learn more about the Korean market and the BCCK’s market entry services, please contact us at firstname.lastname@example.org.Posted by BCCK Posted on 05 Jun