The Ministry of Agriculture, Food and Rural Affairs (Minister Hyun-soo Kim, hereinafter 'MAFRA') announced that agri-food exports recorded USD 6,845 million (as of November 2020), up by 6.8% year-over-year.
❍ Despite rapid changes in overseas circumstances due to the spread of COVID-19, agri-food export volumes have reached record-breaking numbers thanks to prompt policy supports.
❍ In particular, the agri-food exports to the 'new southern*' region rose 8.4% yoy, and emerged as the number 1 export area** for the first time in history by surpassing Japan.
* Exports to New Southern Region: USD 1,287 million in November 2019 → USD 1,395 million in November 2020 / 8.4%↑
** Proportion of Exports to New Southern Region: 19.6% in 2018 → 20.3% in 2019 → 20.4% in November 2020
❍ The favorable performances in most new southern countries such as Thailand (9.8%↑), Indonesia (4%↑), Philippines (33.1%↑), Singapore (19.8%↑), Malaysia (23.1%↑), and India (34.7%↑) are continuing, leading us to the conclusion that this area has positioned itself as the next-generation key market that drives agri-food exports.
So far, MAFRA has been strengthening the export basis by establishing online and offline sales platforms mainly for products suitable for characteristics of each new southern country, and provided marketing supports to meet rapid changes in the distribution toward online and non-face-to-face due to COVID-19.
<Major Exporting Products>
As for the major exporting products, the demand for HMR rose and delivery apps* linked to online platforms (O2O) expanded, leading to an increase in noodles (USD 138 million/16.1%↑), sauces (54/15.8%↑), baby formulas (24/43.9%↑), kimchi (8/55.2%↑), and yuja tea (6.4/160.3%↑).
* Vietnamese Food Delivery Market (2020): USD 38 million (approx. KRW 46.1 billion)
- Since the exports began in full swing after the initial quarantine settlement in Vietnam, the exports of fresh agricultural products are continuing on the rise for grapes (34.5%↑), chicken (12.3%↑), and ginseng (6.9%↑).
❍ During the COVID-19 pandemic, Korean food recipes for tteokbokki, bibimbap, kimchi fried rice and gochujang bulgogi started trending on Hallyu TV series such as 'Itaewon Class' and video platforms such as 'Stay Home Playbook'.
- This provided an opportunity for the rapid trending of Korea's representative healthy food 'ginseng', main food ingredients 'gochujang and kimchi', snacks 'instant tteokbokki* and ramyun' as well as premium fruits 'grapes and persimmons'.
* Tteokbokki Exports to New Southern Region: USD 31 million in November 2019 → USD 48 million in November 2020 (Up 58%)
<Formation of Online & Offline Sales Platforms>
❍ MAFRA is continuously strengthening the basis for producing farms and SMEs to advance in the market by expanding online and offline platforms* that combine local major distribution stores in Vietnam, Indonesia and Singapore with online shopping malls.
* Vietnam (45 stores): Vinmart (31 stores), Lotte Mart (14 stores), 211 products newly launched in 25 businesses
* Indonesia (50 stores): Lotte Mart (Retail, 15 stores), Lotte Grossier (Wholesale, 35 stores), 148 products in 22 businesses
* Fresh Agri-food Stores (K-Fresh Zone): 50 stores in 4 countries (Singapore, Vietnam, Thailand and Malaysia)
- Established permanent K-food sales zones ('I-Like K-Food', joint brand hall) in large distribution stores, and is implementing a marketing strategy that links delivery apps with online e-commerce platforms
* Linking with 'I LIKE K-FOOD hall' in online shopping malls and social commerce via QR code from online and offline stores, giving out delivery coupons when searching and ordering product, supporting event participation such as points, etc.
- Carried out various marketing promotions such as live special sales events with professional power influencers based on e-commerce platforms (Shopee & Q10), and social media social commerce platforms (Facebook, Line, Instagram, etc.) that are growing simultaneously in new southern region
- Through this, the awareness that 'permanent Korean agri-food sales zone = purchasing window for high quality Korean food' is increasing.
New southern region is an essential market for diversification of the export markets that are focused on the US, China and Japan, and through the conclusion of the Regional Comprehensive Economic Partnership (RCEP), the export growth is expected to accelerate further.
❍ In order for 'high quality, premium' agri-food to position itself as early as possible mainly with products that will be tariff-free as a result of the enforcement of RCEP,
- The ministry plans to raise competitiveness by meticulously phasing in policies from variety development to product development, storage technology after harvesting, improving sorting and packaging, reducing logistics fees through air to ship conversion and marketing.
❍ The ministry will carry out various marketing strategies* to ensure Korean food to become more familiar to local consumers by actively utilizing 'Hallyu' as a core instrument for exports.
* Producing Korean agri-food contents based on strategic participation of CJ K-CON and expanding consumer participation through live communication on global social media platforms, etc.
❍ The ministry plans to establish 'K-food Sales Zones' in major e-commerce platforms in Southeast Asia to organically link with offline platforms and continuously expand the launching and sales support of promising products suitable for market conditions in each country.
Jong-gu Kim, the Food Industry Policy Officer at MAFRA said, "Korean businesses are going through hardships due to slowing global economy and deteriorating logistics conditions."
❍ "But by selecting strategic products for each country and expanding online and offline bases, the export market has turned favorably."
❍ "By taking advantage of Korea's position that has improved due to COVID-19 response, we will expand policy supports so that our food businesses can revitalize in new southern region."