The health functional food sector in South Korea can be divided into the following major areas: red ginseng (market share of 52 percent), product-specific (8.3 percent), vitamin & mineral supplements (7.9 percent), aloe (6.7 percent) and ginseng (3.8 percent).
Among individually approved products, the popular ranges target weight-loss, liver care and bone/joint-care.
Korea’s functional food market is expected to grow rapidly at 10 percent annually due to a number of factors such as ageing population and lifestyle.
Domestic functional food production remains strong, however it is unable to meet the demand for high-end advanced products and these products are mostly sourced from offshore.
The key players in the market are mostly well-established corporations, as the Korea Food and Drug Administration’s (KFDA) recognition is required and this involves a long and costly process.
Getting your product into market
Companies who are interested in exporting health functional products to Korea should be aware of the government regulations which control the market.
If products are not recognised by KFDA as health functional foods, there are limitations on the health claims that can be used when marketing.
It is also critical to identify the right business partners, who are experienced and able to facilitate opportunities for your brand in the market place.
Online sales have the largest market share (26 percent) in terms of distribution for health functional foods.
Korea is a very price-sensitive market, however people are willing to pay more for premium products.
Marketing
Packaging is very important to Korean consumers as it gives them the first impression of the product itself. People tend to assume that the quality will be good if the product is nicely packaged.
Regulations
KFDA oversees licensing, inspection and import control. All health functional food imports need to file for an import notification.
KFDA only issues import notification certificates to Korea-based firms requiring international firms to work through their importers.
Opportunities
- As medical expenses are climbing, people are becoming conscious of “self-care”, which has created a consumer-base for health functional foods in the market.
- Korea’s functional food imports are expected to grow by 10 percent per annum over the next 2 years.
