On January 6, Yonhap News Agency reported that a data released by Korea’s Korea Trade and Investment Promotion Agency (KOTRA) on the same day showed that the export of Korean rice cookers to China in 2014 was 14.79 million US dollars, only from the leader Japanese rice cooker. The difference is 210,000 US dollars. In view of the average annual growth of Korean rice cookers’ exports to China from 2012 to 2014, the Korean rice cooker’s exports to China in 2015 may have surpassed Japan. In China, the largest battlefield in the rice cooker market, Korean goods are about to become the best-selling foreign goods.
It can be confirmed that on the Chinese shopping website, the Korean and Japanese rice cookers have already staged sales reversal. The above report mentioned that in November last year, South Korea’s leading rice cooker manufacturer Fuku’s rice cooker ranked fourth in Tmall’s sales, second only to Chinese brands such as US, Supor and Jiuyang. Japan’s Matsushita, which once ranked first in the list of imported brands, was the top three in the import list. According to Fuku, it is estimated that if there is no accident, online sales in December last year should also rank first among imported brands.
It is worth mentioning that the sales of Korean rice cookers in China are not related to the high-end and high-price strategy.
In the third quarter of last year, the sales of Fuku’s Huafu Qingdao Fuku Electronics Co., Ltd. increased by 20.2% year-on-year to 24.24 billion won (about RMB 135 million), the first three quarters (1- September) Cumulative sales soared 69% year-on-year. In the same period, the sales of Cool Morning Rice Cooker, which followed closely, also increased by 50% year-on-year.
The Yonhap News Agency quoted the relevant person in charge of Fuku as saying that in order to establish a leading brand position in China, the company is enriching the high-end product line, launching new products with Chinese voice prompts, and implementing a customized localization strategy. The person in charge of Cool Morning said that in addition to offline marketing, it is still digging deep into the online shopping and TV shopping market that is regarded as the largest blue ocean. As Chinese consumers prefer Made In Korea, Cool Morning Rice Cooker is creating a high-end brand image.
In fact, Chinese consumers are not only favoring high-end brands in Japan and South Korea.
Previous data released by some domestic brands showed that during the National Day, the company’s overall sales of rice cookers increased by only 4% year-on-year, but the sales of high-end products increased by 163% year-on-year.
It is worth mentioning that the sales of Korean goods in China are higher, and there is still a big positive support: the China-South Korea Free Trade Agreement has come into effect.
On January 1 this year, China has launched a second round of tariff reductions for Korean goods. According to the agreement reached between China and South Korea, in terms of trade in goods, China will eventually have 91% of its products canceled tariffs on South Korea, covering 85% of imports from South Korea.
Of course, tariff reductions are gradually advanced. Take the Korean rice cooker as an example. The tariff reduction rate set by the Chinese side is that the tariff rate will drop to 12% in 2016, and then it will be declining year by year until the tariff is exempted in 2024.
According to the Development Research Center of the State Council, the China-South Korea Free Trade Agreement will boost real GDP growth in South Korea by 0.97 percentage points.
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