Cause and effect
Locals and expats weigh in on S.Korean market in China as THAAD rift continues
“Ithink as talks about THAAD go on, my shopping habits haven’t been affected much,” said Wu Zhongbin, 24, a policy manager with the China Chamber of International Commerce. “When I go
types of food there are instead of where they are from.”
Wu lives in Wudaokou in Haidian district. The place is known for its large number of Korean restaurants and South Koreans, mostly consisting of college students, and Wu is exposed to a large variety of Korean products.
There has been anti-South Korean sentiment growing among the Chinese public against the deployment of US Terminal High Altitude Area Defense (THAAD) missile defense system in South Korea.
Some Chinese have taken action to boycott Lotte Group for its land-swap deal with the military for THAAD. Media reports say that other South Korean brands including automobile maker Hyundai Motor might have faced declining sales during the past few months.
Metropolitan has invited several South Korean expats in China and Chinese consumers to see how the situation impacts their lives and whether Chinese consumers turn away from Korean products.
Instant noodles, jucies and cosmetics
Wu likes his instant noodles, and buys different brands and compares them. “Domestic products usually come in bags or barrels and hot water is enough to prepare them, while South Korean noodle products usually require boiling,” he said. “You can also add vegetables to it so it feels more homemade.”
It is the thoughtful or unique features that causes Wu to choose some Korean brands. Downstairs where Wu lives are some small shops that sell Korean products, such as Korean rice wines. “The taste is just Okay, but you’ll still want to buy it just to try them. Other fun products include yogurt-flavored candies and thin cigarettes.”
Wu sticks to his personal preferences. And despite the fact that many are claiming to be boycotting South Korean products, Wu does not feel pressure when he buys these products.
“Boycotting won’t make as big of a difference consumers think it will.”
With the anti-South Korean sentiment, some products still seem to maintain business.
According to a report by South Koreabased Aju Business Daily, export of the country’s instant noodles, known as ramyeon in Korean, has been increasing and in 2016, China was the biggest importer of Korean instant noodles. The report also said that in 2016 the shipment of instant noodles to China rose 115.4 percent to $26.98 million, and in the first half of 2017, exports to China jumped 202.4 percent compared to the same time the year before, according to statics from the Beijing office of trade and investment promotion organization KOTRA.
Not only did exports of instant noodles to China grow, data also shows that mixed juice brands and basic cosmetics also did well in the Chinese market. South Korean mixed juice brands account for a market share of 53 percent and basic cosmetics 28.7 percent in the Chinese import market.
Many South Korean brands have done well in analyzing local consumers’ preferences, Wu said, and make products accordingly, which makes consumers loyal to the products. “It’s not easy to change consumers’ habits,” he said.
However, between China, South Korea and Japan, a lot of their products can substitute each other, and that’s more challenging for companies than facing boycotts, according to Wu.
“For instance, my female friends who buy Korean cosmetics are trying other brands at this time.”
Buy, or not to buy
Zhao Teng, who works in the sports industry, is among those who think there should be a boycott. “They hurt our feelings, so they shouldn’t earn money from us.”
Zhao said that the choices of Chinese consumers can help make a point. “I don’t usually use South Korean brands, and I won’t consider choosing them in the future either.”
He told Metropolitan that he is also glad to see that his younger sister, who has been a fan of several South Korean pop stars, including singer G-Dragon who has been very popular in China, has shown less interest. “She said they seem less attractive because there are many good-looking Chinese singers and actors with good work coming out these days.”
Some consumers choose to express their anger openly towards South Korean products. In a viral video, a video blogger crushed and melted his girlfriend’s South Korean makeup to express his anger in March, the Global Times reported.
Lillian Li, a 29-year-old human resources professional living in Beijing, has been using certain masks, creams and makeup products from South Korea for over a year now, and she doesn’t plan to stop as a demonstration of patriotic feelings.
“I like them because there are a lot of choices, and they are not expensive,” she said. But Li said that she is trying to find replacements for the South Korean products. “I have concerns that it might be more difficult to purchase these masks in future. But mostly it’s because I am still experimenting with different brands, and these [South Korean products] are not the best.”
Ko Weon-young from South Korea, who has been living in Beijing for five years, finds that her Chinese friends have not given up using South Korean products they are fond of. Most of Ko’s Chinese friends are women and many of them like South Korean cosmetics brands such as Amore Pacific and Leaders.
“Personally, I think THAAD has hurt Chinese people’s feelings, but it has limited impact on their habits and preferences as customers,” she said. “If using those products has already become a part of their habits and they find the products have good quality, no matter where the products are made, they will continue to use them.”
Ko admits that the boycotting makes her feel sad. “And some South Korean companies are suffering, so seeing that
makes me feel bad too.”
ShoppingShopp and tourism
Park Ji-Yu (pseudonym) is a purchasing agent currently residing in Shenzhen, Guangdong Province. Park told Metropolitan that THAAD deployment has affected South Korean business in China. Park has been living in China for more than four years, and she goes back and forth between the two countries often. She said that one can see the impact on business in South Korea, especially this May, with less Chinese tourists and customers. According to the Korea Tourism Organization, the number of Chinese tourists visiting South Korea dropped 46.5 percent on-year to 2.53 million in the first seven months of 2017. But in China, the purchasing agents’ businesses are recovering. According to what Ko has learned from her friends, sales dropped when news about THAAD implementation originally came out a couple of months ago but now have recovered. However, her friends who work at duty-free shops back in South Korea said that sales have dropped greatly, as fewer Chinese tourists have chosen to visit South Korea this year. Ko thinks that there are multiple factors at play, such as the decline of South Korean cultural influences. “K-pop music, movies, TV dramas and other cultural products have already repeated the same patterns, making Chinese consumers bored,” Ko said. “To attract more Chinese tourists and Chinese customers, South Korea will have to think of better ways.”
As an English-speaking agent who mostly caters to expat customers, Park’s business was not affected. She noted the businesses of South Korean restaurants have been increasing and food products, especially trustworthy baby food brands, are getting popular too.
However, Park is not very confident that Korean products will continue to sell well in China. “It depends on the products. [There are] a lot of Chinese products to replace them. They develop so fast.”
Pressure on South Korean expats
Ko works in the Internet industry at Wangjing in Chaoyang district, known as the Korean town of the city. She told Metropolitan that because of the tensions, she tries her best not to speak Korean in public and when she has to, she speaks in a lower voice. She continues to feel psychological pressure during this time, but it’s getting better.
“I think the anti-South Korea sentiment does exist. But it’s getting better,” she said.
When THAAD was first enacted, she sometimes felt she was being stared at when speaking Korean in public or taxi drivers might start asking whether she is South Korean, which would possibly be followed by comments on THAAD deployment. But now she feels the tensions have eased.
“It’s not intimidating,” she said. She added that some of her Chinese friends also try to understand and comfort her and other South Korean expats in China.
Ko doesn’t support THAAD implementation herself. “It costs a lot, and I believe that it benefits the US in the end,” she said. There have been demonstrators against THAAD deployment on the street in South Korea, according to media reports.
Ko said that she does notice a decline in the number of South Koreans in Beijing, but she also pointed out that reasons behind it are complicated. “Some companies have left and moved to second-tier cities for cost and other reasons,” she said.
Some South Koreans in Shanghai have already moved or are considering moving to Vietnam. Advertisements of research trips for relocation and apartment rentals in Ho Chi Minh City have been posted in local community newspapers, reported huanqiu.com. Ko herself also took a tourism trip to Vietnam last month and is considering it as an option.
According to Park, some South Korean families are considering leaving Shenzhen, too, but the major reason would be living costs.
“The reason they are leaving Beijing is not necessarily THAAD related,” Ko said. “Part of the reason is that, just like China, Vietnam also has a lot of possibilities. And many South Korean enterprises have developed new locations in Vietnam, Cambodia or Indonesia, which makes the demand of talent increase there as well.”
Deployment of THAAD in South Korea against China’s interests becomes a factor that affects Chinese customers’ choices.
Instant noodles still sell well despite anti-South Korea sentiment among Chinese consumers.