Chinese market no longer land of opportunity for Korean products
SEOUL-- China's consumer market that once offered vast opportunities for South Korean exporters has become less penetrable as Chinese firms make goods that compete with imports, industry data showed Friday.
Samsung Electronics, which in 2012 ousted Apple Inc. to hold the top market share for smartphones in China, fell to eighth place in the first quarter of this year. Samsung's market share in handsets hit 17.7 percent in 2012, then rose to 19.7 percent the following year before losing ground. It dropped to 13.8 percent in 2014, slid to 7.6 percent in the following year and stood at 4.9 percent in 2016. In the first quarter this year, its market share was a marginal 3.1 percent.
China's own brand Huawei raised its market portion from 9.9 percent to 18.9 percent over the past five years. Another local firm OPPO, who had no presence in 2012, soared to grab 18.7 percent during the period. Together with Vivo, the three are dominating the Chinese smartphone market.
South Korea's exports and other China-connected businesses like tourism and shopping have all been suffering from the diplomatic row between the neighboring countries over the deployment of the U.S. anti-missile system. China is seen as retaliating against South Korea's decision to host the Terminal High Altitude Area Defense (THAAD) system on its soil. Beijing is concerned that the system, which is intended to counter threats from North Korea, will also catch China's own missile movements.
Industry officials say that data indicates THAAD may not be the only cause of falling South Korean exports to China as firms there are quickly catching up in technology and no longer relying on foreign products.
Samsung Electronics is a dominant label in the global TV market but not so in China. Its first-quarter standing in the Chinese market was 3.9 percent, placing it at 10th place. All nine higher rankings went to Chinese makers.
The Korean Electronics Association in its recent report noted this phenomenon.
"As late as five years ago, Chinese TV makers mostly used to manufacture products on orders from overseas. Now, they are developing their own brands and making them," the report said. "It has begun to aggressively compete with European, U.S. and Japanese firms."
South Korea's auto exporters have also been nudged out by Chinese companies, data showed.
Hyundai Motor and its sister firm Kia Motors reported their market share in China had been cut in half compared with five years ago. The carmakers said their numbers fell from 8.6 percent to 3.8 percent. They were routed by Chinese local labels, which claimed 46.1 percent of the market, followed by European (21.4 percent) and Japanese (17.6 percent) automakers.
"The speed at which Chinese products are pushing out South Korean products is startling," a corporate official said. "We have nearly lost the Chinese market, and the situation is serious in India and other countries as well."
He stressed local companies must move quickly to come up with ways to deal with the trend or face even tougher challenges going forward.
Source: Yonhap News Agency