Advice on entering the wine market of South Korea

James Lawrence interviews four wine experts who reveal the secrets to thriving in the South Korean wine market.

Aaron Brasher, Marco Fizialetti and Michel Moosbrugger
Aaron Brasher, Marco Fizialetti and Michel Moosbrugger

South Korea, a country of 55m people, is the world’s 11th largest economy. A global leader in technology and innovation, the country boasts the world’s fastest internet connection speeds, and is recognized for its innovation in technology. It’s renowned throughout Asia as the place where popular trends emerge, particularly in pop music and television drama.

Aaron Brasher
business development director,
Robert Oatley Vineyards, Australia

Robert Oatley entered the Korean market around six years ago, after meeting our importer at ProWein. The market has flourished since the Free Trade Agreement came into force in 2014 – it has created a much more level playing field for Australian wine against the likes of the USA, Chile and EU countries. Australian wine is currently the sixth largest force in the market by volume, and we’re catching up. I also sense the market is understanding, and in turn purchasing a more premium proposition from Australia. The market grew 21% in value last year and its five year CAGR (compound annual growth rate9 was 17% in value, so there’s some real growth momentum in sales. The nation is the third largest wine market in Asia and South Koreans identify Australia as a country that has a clean, green environment, therefore Australian products are held in high esteem. Both the retail and hospitality sector are growing, there is growth in the mid-price range for Australian wine and we also see a demand for premium and super premium offerings.

In terms of geographical hubs, Seoul is the wine centre for South Korea. This is where the bulk of Robert Oatley and indeed Australian wine is sold. There are also increasing opportunities for Australian wine in cities such as Busan and Incheon. Overall I’m very optimistic about our future in this country; there aren’t too many risks. It is a regulated market that offers much potential reward. The sector just needs to propagate messages of high quality and value – the average price of Australian wine going into South Korea is double the global price. We need to build on this quality message.

Cyril Delarue
business development manager,
Champagne Bollinger, France

In 1995, our importer Shindong Wines accepted its first consignment of Bollinger into the Korean market. Today the market for Champagne is growing; however, a few brands, namely Moët & Chandon and Veuve Clicquot, continue to dominate sales in Korea. Yet in recent years we have noticed a growing consumer demand for alternatives to the major Champagne brands. This is, of course, great for Champagne Bollinger. However, for a long time Korea remained frustratingly out of reach for Bollinger, due to the massive bias towards the famous names. It is only since 2018 that we have viewed Korea as a market with real potential.

Today we see the bulk of our growth occurring in the on-trade. Shindong wines stopped selling to supermarkets a few years back, preferring to focus on the upmarket on-trade and department stores. That being said, the competition for by-the-glass listings is fierce, with around 130 different producers exporting to the country and three brands leading the market. This is a market of about 51m people, divided into three key areas: Seoul with 18m people; Bustan 3.5m and Daego 2.5m. The expat community is quite small, unlike Japan and Hong Kong, and so consumption is largely driven by Koreans. 

The main risk to brands is to rush to invest in a market that is still very immature. The level of knowledge about Champagne – production methods, differences in quality, etc – is overall very low. It is so very brand driven. I often make a comparison with the automotive industry; in most countries, consumers don’t need an explanation as to why Aston Martin is more expensive than Ford or Toyota. But for a Champagne brand, explaining the qualitative differences that justify a higher price can be challenge. For this reason, a luxury brand like Bollinger should pick the right time to invest in a country with a growing interest in Champagne. Otherwise, the risk is to remain invisible because the market is not ready.

Marco Fizialetti 
sales manager,
Castello di Querceto, Italy

Castello di Querceto entered the Korean market around 20 years ago. Since our initial foray into the market, the concept of drinking wine has changed in Korea. In the past, drinking wine was considered a curious and unpopular habit. Today wine can be normally found in the vast majority of Korean homes and the diffusion of Italian restaurants has helped this change. Nevertheless, the market’s growth has been slow but solid, as the base of regular wine consumers remains overall low. Recently, we have noticed growth in the retail sector, although the key market for us remains the on-trade. In comparison to other Asian countries, we consider the Korean market dynamic and open to new products. Geographically, demand is dominated by Seoul and a few other cities where the wine culture is more deep-seated, as you would expect. 

In terms of risks, the rules and bureaucracy change very quickly in Korea, mirroring other Asian economies. Only the big players in Korea have a base to follow the changes. Make sure your partner is not a new face on the scene – I would advocate only working with businesses that have an established presence. Also remember that the market for imported wine isn’t currently that large, even if it is growing. There is a danger that your market turnover won’t cover the investment costs. 

Michael Moosbrugger 
director,
Schloss Gobelsburg, Austria

Schloss Gobelsburg entered the Korean market in 2012. The key change I have observed in recent times is a growing interest in white wine. This is a sign of growing maturity, although there is still a long way to go. For the vast majority of Koreans, wine is not seen as a partner to food. In traditional restaurants you rarely find wine on the table. So from that perspective, our growth in the market has been satisfactory only, but what we expected. Austrian wines are ‘carried’ by the on-trade sector in Korea – brands that originate from outside of France, Italy and Australia need a personal recommendation. So the retail sector currently makes no sense for us. Korea is something of a contradictory arena, a dynamic market this is still immature. The level of specialist knowledge is growing, but it remains to be seen whether wine enjoyment will become a widespread feature of Korean culture, as opposed to a niche hobby. 

My advice to prospective brands is to think hard before entering Korea. You need to have a strong commitment to this country and its culture. If you want to build up your presence in this market you need to come at least once or twice a year, and work with the importer. I know a lot of colleagues who find an importer during a trade fair in Europe, but are not willing to visit Korea on a regular basis. All these wines simply ‘disappear’ over the longer term. Take a deep breath, formulate a long term strategy and invest heavily in the first five to 10 years.

Interview by James Lawrence

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