Amidst fluctuation of the Korean economy due to unstable situations of the global economy in 2015, such as anxiety over the increases in the interest rates by the United States, China’s slow growth and low oil prices, an export-oriented company in Korea, however, achieved a substantial growth.
As a mid-sized wallpaper company who had been relying on domestic wall-papering market in popular moving seasons until 5 years ago, Shinhan Wallcoverings is recognized as a leading export firm by recently receiving the $10 Million Export Tower. This demonstrates the importance of localization of products in export markets. In an exclusive interview with The Korea Post, Kim Seung-dae, managing director for Overseas Business Department at Shinhan Wallcoverings, stressed, “Product developers need to directly listen to the voices of consumers in the overseas markets.” In the interview, Managing Director Kim Seung-dae elaborated on the company’s export strategy and marketing plans in the Middle East.
Question: Products of your company are popular in the Middle East where the wallpaper culture is yet to be established. What is the reason for that?
Answer: At an industry exposition held in China in 2000, a buyer from the Middle East visited our booth and he ordered our products in quantity of seven 40-feet containers. As we were exporting products primarily to China with culture similar to us in those days, it was an astonishment to export products to the Middle East. In October of the same year, we introduced Korean wallpapers to the Middle East by taking part in an exhibition held in Saudi Arabia. Currently, the company is exporting products to Middle East countries, including Saudi Arabia, Yemen, Qatar and United Arab Emirates. Export of our products to China accounted for 70% of our total export amount by 2012, but the Middle East market is emerging since then as export to China decreased due to slow growth of Chinese economy.
To stimulate purchasing power of the Middle East people, we published 3D sample books under the title of ‘Veluce’. The most popular products in the Middle East and other countries are 8 brands, including NOUR, JUDE, SPLENDOR, KARMA, SILKROAD, PALACE, MARGARET and ROSE WAVE.
Walls of most houses in the Middle East are painted to cover rough walls. But upper class people in the Middle East mainly use wallpapers to decorate walls. While the Middle East has imported wallpapers mainly from Europe, but they increasingly prefer Korea-made wallpapers along with the Korean wave. While Korean people prefer refined and simple colored wall papers, those in the Middle East traditionally love colorful and strong-colored wall papers. But, more consumers in the Middle East are preferring simple and refined wall papers in recent years, demonstrating changing trend of wall paper culture. We realize that wall paper market is growing as an axle of fashion culture.
Q: What is your differentiated marketing strategy?
A: The lifespan of wall paper is typically 1~2 years. About 1,500 different products become available and disappear every year. As the lifespan of wall papers is so short, development and marketing of products are most important factors. So, we need differentiated strategy to approach to consumers. We adopt the collection strategy to differentiate from competitors in Korea and other countries. As a leader in the wall paper industry in Korea, we are investing in developing a variety of new products to lead the wall paper culture.
European companies are already implementing collection marketing strategies. They are striving to satisfy needs of consumers by publishing sample books with diverse concepts, including wall papers for kitchens, living rooms, bed rooms, children’s rooms and commercial purposes. As manufacturers in other countries have already standardized sample books by different concepts, Shinhan Wallcoverings is proposing sample books standardized by spaces and concepts to companies in Korea. We realize that we will fall behind if we don’t change ourselves.
Q: What are your plans for expanding overseas markets and launching new products in 2016?
A: Our major export markets are the Middle East, Turkey and China, and we are exporting small volume of products to Mongolia. However, I believe we need to diversify export regions to survive competitions as export markets are volatile. Since Russia has been importing wall papers from Europe for decades, we need to invest more time in that country, and we will concentrate efforts on marketing in Indonesia, Vietnam, Malaysia and Thailand where many people from China are living.
Wall papers imported from Europe represent over 80% of wall paper market in Russia, which amounts US$1.7 billion a year. Wall paper market in Korea reaches approximately US$304 million. We plan to launch patented new premium products that used natural raw materials in February 2016, and we expect to gain high popularity in Korea and the Middle East.
Q: I believe 2016 is a meaningful year for Shinhan Wallcoverings as it marks its 20th anniversary. What would you say on this occasion?
A: Wall papers need to invest in developing new products as preferences are different depending on individuals and countries. We could succeed in Korea as we concentrated investments in developing diverse products. We aim to expand export markets beyond the domestic market. We plan to declare the second establishment of the company when we move the office to a new building in May 2016. We are assured that the new office building will give pride to employees while apprising of growth of the company to overseas markets. It is expected to grow as a leader of the world wall paper market in 2016. And the company is donating wall papers in value of approximately 1 billion won (US$870,000) a year to volunteer service organizations, jails and military camps.