The South Korean outdoor market remains one of the biggest ones in the world, but it is estimated to have declined by about 15 percent last year, due to economic sluggishness and unfavorable trends in consumption, but several protagonists predict that the situation may at least stabilize this year.

The Korea Outdoor & Sports Industry Association (KOIA) estimates that the market shrank by about 40 percent over the last three years. Fast-growing enthusiasm for outdoor activities and products led to a sustained rise in demand that saw the market expand from an estimated 1.2 trillion Korean won (€0.9bn-$1bn) in 2006 to nearly KW 4.0 trillion (€3.1bn-$3.3bn) in 2011 - at retail level excluding bicycles. But in the more recent years, it has been affected by a wide range of unfavorable factors, from over-supply to warm weather, economic uncertainties and public health concerns.

The KOIA thinks that the five leading outdoor brands in the country have all been affected by the downturn, and that the turnover of this group was nearly halved in the three years to 2016. The leading suppliers include The North Face, Black Yak, Kolon Sports, Nepa and K2, which is unrelated to the U.S. winter sports company. Other brands including Eider, Gregory, Mammut and Wild Roses were offering discounts of 50 to 70 percent in stores just outside the city center of Seoul a few weeks ago.

Some other brands have raised their market shares because they have been faster in adjusting to the demand for more urban products. Sources in the Korean industry most frequently pointed to Discovery, which has become a prominent supplier to department stores. Other brands that have apparently been faring relatively well are Descente and Beanpole, plus some smaller brands with particularly active distributors.

The trend away from outdoor to sports and athleisure has become quite clear in the offerings at department stores and shopping malls. Outdoor brands continue to have strong exposure in the upper floors of the leading department stores, from Lotte to Shinsegae and Hyundai, but the mix of the brands has markedly changed in the last years. Colors have been toned down, with more variations of brown, white and dark blue. The trend plays in favor of brands such as Fjällräven and Aigle. The White Label range by The North Face is resolutely urban, with its own space in the fashion section.

  

In the outdoor equipment sector, younger consumers are trending toward light and varied outdoor activities, such as short hikes, water sports or even a picnic. This has given rise to a trend that Koreans have described as “campnic.” Among the busiest stores in the outdoor department of Shinsegae in Gangnam is Hollain, a Korean brand of outdoor apparel and small equipment, which may be suitable for a short camping trip as well as a festival or just an afternoon in the sun. It ties in with the “healing” trend, which has been growing in Korea in the last three years. It appeals to urban residents who want to focus less on money and consumption and more on healthy and mindful activities.

As previously reported, some of the international brands have decided to reduce their investments or to pull out of the market altogether. LS Networks, which is part of the LS conglomerate, is one of the latest companies to cut back its business in the sports and outdoor market. The company behind the Prospecs brand, one of the leading players in the Korean sports footwear market, was formerly involved with Skechers as well as Mont-Bell, Jack Wolfskin and Peak Performance. However, it was reported in Korea that LS Networks has decided to focus on Prospecs. Skechers has found a new partner in Korea.

LS Networks had also tried to move into multi-brand outdoor retailing. It opened nine stores trading as Walk & Talk, which raised high hopes among the smaller brands unable to open their own stores, but it appears that this venture is no longer active.

The tensions of the last years have made it harder for foreign retailers to break through with multi-brand concepts. Intersport International Corporation tried it in the sports market in 2010, when it gave a license to LG Fashion, a spinoff of the huge LG group. This partner opened eleven stores, but the two companies decided to end their partnership after five years and the stores were closed. Xebio, the Japanese sports retailer, which started a joint venture in Korea in 2012, is apparently still operating four stores in Korea.

The number of independent multi-brand outdoor stores is estimated to have dropped to about 30, compared to more than 80 a few years ago. Among the most dynamic specialists is Outdoor Park, the distributor for Montane. The company has its own store in Seoul, selling Montane along with other brands, such as Arc'teryx and Millet. Outdoor Park has been relatively resilient due to its involvement in the bicycle market, as the partner for Merida, among others. However, such intermediaries are under increasing pressure to compete with the franchises of Korean-owned brands, who work on a consignment basis.

Along with the slump in demand, the price structure of the Korean market has been affected by the opening of more outlets and the rise of online retailers. They include the online malls of the department stores, along with a few specialists. OK Outdoor, a multi-brand retailer that formerly had a dozen stores, has shifted its focus to online retailing. The country's outdoor suppliers, who have no control over the pricing in the online malls run by department stores, often try to differentiate the ranges intended for such channels.

Another disruptive factor is the rise of private imports, which are exempted, under a specific value, from import duties. Consumers are thus increasingly ordering foreign products online, or even turning directly to suppliers.

Some of the country's suppliers and distributors feel that the market would continue to decline this year, due to continued over-supply and a further shift toward athleisure. However, the KOIA sees the market situation possibly improving due to several factors, ranging from presidential elections to the preparations for the Winter Olympics to be held in PyeongChang in 2018. The elections may reduce uncertainties as Korea has been embroiled in a political scandal, leading to a vote by the National Assembly to impeach its president late last year. It reduced its GDP growth forecast for 2017 from 3.0 to 2.6 percent for 2017. Koreans who refrained from outings due to the outbreak of a respiratory syndrome virus may be eager to catch up with outdoor leisure this year.

The KOIA boasts about 250 members and 70 of them will be attending the Ispo Munich fair. The international market has become increasingly appealing for Korean outdoor brands in the last years, given the contraction in their own market.