South Korea remains the second-largest market for outdoor products after the U.S., due to a combination of active outdoor participation and outdoor-oriented lifestyle fashion, but it is not growing as rapidly as before. According to Dong Chil Kwon, president of Treksta and chairman of the Korean Footwear Industries Association, the Korean outdoor market is likely to grow by only between 5 and 10 percent this year, after rising by 11.3 percent to the equivalent of US$6.40 billion in 2013. It was previously growing by more than 30 percent a year.
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Because of this trend, Treksta and other local producers are increasingly targeting the emerging Chinese market which, as we previously reported, grew last year by an estimated 16.2 percent to the equivalent of around US$2.5 billion. The process will be facilitated by the recent signing of a Free Trade Agreement between the governments of South Korea and the People's Republic of China, which calls for the elimination of import duties on footwear on both sides by the end of this year.
South Korea already has FTAs in place with the U.S., the European Union and several other countries including India, Chile and Peru. This is encouraging companies like Treksta to internationalize further, making more use of their production facilities in the country. Treksta, whose sales were boosted last year by a big national military contract, is about to finalize numerous new distribution deals in Europe. The company is also planning to offer internationally next year its growing line of clothing for trail running and other purposes, which is already selling well in Korea, China, Taiwan and Hong Kong.
Kwon's definition of the outdoor market is relatively broad, as it includes the lifestyle offerings of the outdoor brands. It includes camping products, but not fishing, hunting or cycling. While the technical outdoor market continues to expand, fewer people are wearing outdoor clothing as casual wear in Seoul's subway and in other urban settings since last April, Kwon said.
He added that consumers seem to have become confused by the proliferation of local and international outdoor brands in the Korean market, which has reached a state of near-saturation, leading to a situation where only the fittest will survive. Columbia Sportswear's management mentioned this while commenting on its latest quarterly results (see the article in this issue). Some outdoor shops have closed down. A Korean brand of outdoor clothing, Yesol, went out of business recently. Ternua, the Spanish brand of outdoor apparel, entered the market about three years ago, but then disappeared.