This success story arises from the following service: Finding Distributors and Business Partners in Korea
A large, German-owned company, specializing in the manufacture of European-style food products such as jams, fruit preserves, and sauces, wished to explore entry into the Korean food market through the distribution of its products.
TARGET: PENETRATING THE KOREAN FOOD RETAIL MARKET
The company's products are mainly distributed in food chains across Europe, Israel, and the USA. Despite no presence in East Asia, the rising purchasing power in the East made South Korea a prime target for product penetration through a local distributor.
CHALLENGE: NAVIGATING A SATURATED MARKET WITH DIVERSE LOCAL TASTES
South Korea's food market is highly developed, featuring major players from discount stores to prestigious department stores, local supermarkets, convenience stores, hotels, restaurants, and coffee shops. The market is saturated with Western food products, posing a challenge for new entries. Additionally, the acceptance of new products by local tastes and strict regulations by the Ministry of Food and Drug Safety (MFDS) needed to be addressed.
WORK PROCEDURE: MARKET AND PRODUCT RESEARCH
To navigate these challenges efficiently, KOISRA's team conducted a multifaceted approach. Initially, an internal review of the client’s products and a comparative market analysis, including pricing, were undertaken. Concurrently, customer research was performed to understand the distribution channels, profit margins, and pricing strategies.
Upon analyzing the market and product data, KOISRA developed strategies for market entry, recommending a focus on the premium food product sector. A profile for an optimal distributor was established, emphasizing experience with Western products, presence in leading retail chains, import expertise, and compliance with MFDS regulations. A list of potential distributors was compiled, leading to meetings organized at the distributors’ offices.
The initial meetings were crucial for building familiarity, adhering to local business customs of presenting products and company profiles on-site. KOISRA facilitated these meetings with localized presentations and product samples for evaluation. Follow-up meetings focused on distribution terms, conducted in Korean to align with local cultural practices.
RESULT: ESTABLISHMENT OF LOCAL DISTRIBUTION AND MARKET ENTRY
After several months of discussions, taste tests, and negotiations on distribution terms, a suitable Korean distributor was selected. This distributor, known for its extensive network within prestigious department stores and hotels and experience with Western food brands, matched the client's distribution criteria. In line with the strategic plan, the client's food products were initially sold in high-end stores and hotels, ensuring desirable profitability.
