A Study on Entry Strategy in the VRICs Markets for Korean Retail Industry

다국어 초록 (Multilingual Abstract)

Since the Korean domestic retail market was opened up in 1996, a ground-breaking reform has been made in the market structure, primarily led by new ‘retail giants’such as big supermarkets, convenience stores and TV shopping channels. The domestic retail industries increasingly suffer from the limitations of the domestic market arising from economic depression, deepening competition in the retail industry, etc. They are now turning their eyes to new emerging markets with great potential, particularly VRICs (Vietnam, Russia, India and China) to gain new driving force for their businesses.
Fighting to take the lead in the VRICs markets among the global retailers is getting serious. This study is aimed at suggesting to the domestic retail industries possible business strategies to enter the VRICs markets. First, the retailers have to establish a regional strategy in a way that clusters the target market based on certain criteria first and gradually increases the number of hubs across the clusters. Second, the retailers have to develop localized and customized products suitable for specific ages and classes in the target market as well as an appropriate merchandising strategy. Third, a strong partnership between the Korean retailers, manufacturers and local partners has to be formed to fulfill a co-marketing strategy. Forth, the Korean government should financially subsidize the domestic retailers newly entering the VRICs markets so that they suffer as little financial hardship as possible in their business during market entering. The government also needs to pursue Free Trade Agreement (FTA) with the VRICs to facilitate the domestic retailers’ businesses.

다국어 초록 (Multilingual Abstract)

Since the Korean domestic retail market was opened up in 1996, a ground-breaking reform has been made in the market structure, primarily led by new ‘retail giants’such as big supermarkets, convenience stores and TV shopping channels. The domestic retail industries increasingly suffer from the limitations of the domestic market arising from economic depression, deepening competition in the retail industry, etc. They are now turning their eyes to new emerging markets with great potential, particularly VRICs (Vietnam, Russia, India and China) to gain new driving force for their businesses.
Fighting to take the lead in the VRICs markets among the global retailers is getting serious. This study is aimed at suggesting to the domestic retail industries possible business strategies to enter the VRICs markets. First, the retailers have to establish a regional strategy in a way that clusters the target market based on certain criteria first and gradually increases the number of hubs across the clusters. Second, the retailers have to develop localized and customized products suitable for specific ages and classes in the target market as well as an appropriate merchandising strategy. Third, a strong partnership between the Korean retailers, manufacturers and local partners has to be formed to fulfill a co-marketing strategy. Forth, the Korean government should financially subsidize the domestic retailers newly entering the VRICs markets so that they suffer as little financial hardship as possible in their business during market entering. The government also needs to pursue Free Trade Agreement (FTA) with the VRICs to facilitate the domestic retailers’ businesses.

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