Getting active in South Korea’s fast-paced health and wellness sector

Blink and you’ll miss it.

This can be said of South Korea’s KTX bullet train—it travels at a top speed of 330 kilometre/hour—but it’s also true of the fast-paced trends driving South Korea’s robust and expanding health and wellness industry.

Home to the world’s ninth-largest health and wellness market valued at US$113 billion, 84.4% of South Korea’s 51.8 million people consume health supplements, according to the Korean Health Functional Food Association (KHFF). This association oversees policy and development of the nutritional supplement (also known as functional food and beverage) industry.

Driven in part by a high standard of living and a competitive culture that reveres traditional hanbang (the use of natural and holistic medicine), South Korea is a driving force in global health trends and a vast consumer market with potential for Canadian exporters of agri-food and wellness products.

But it’s also a place where fads and the resulting demand for new and innovative beauty treatments and nutraceuticals come and go at an astonishing rate.

“Korea is a fast-growth culture, based on competition. It’s always been something that makes people very reactive to trends. So, there are opportunities for setting new trends and creating new things,” says Yuna Hong, a commercial officer for agri-food and consumer goods with the British Columbia Trade and Investment Office located in the Embassy of Canada to Korea in Seoul. The office is one of several locations worldwide that promote trade with BC companies.

It’s such a dynamic and fluctuating environment to enter that in some cases, by the time a product is ready for market, consumers may have already moved on. Recently, Hong’s office planned a trade show to showcase Canadian craft beer. 

“We tried to prepare six months in advance, but in that time, the trend had changed from craft beer to whiskey, and no one was interested. Once they see a trend, they want to follow it,” she says.

The hectic buzz of consumer demand also fuels the country’s research and development (R&D) of the world’s most cutting-edge extracts from raw materials, like volcanic soil, chia seeds, snail mucus—even potatoes—for new beauty and wellness products.

With current health trends in South Korea focused on clear skin, youth and slim physiques as benchmarks of beauty, South Korean consumers will pay premium prices for high-end or what South Koreans call “prestige quality” goods.

In 2021, South Koreans spent eight times more per capita on skincare compared to the rest of the world. And, as the country’s population ages and fertility rates continue to be the lowest worldwide, consumers are eager for anti-aging and longevity treatments, as well as dietary and body fat reduction supplements.

The pursuit of perfection translates into a strong market for health apps and lifestyle products.  Overall, South Korea ranks sixth globally for physical activity and is strongly focused on healthy eating, nutrition, clean beauty, personalized medicine, and wellness, according to the Global Wellness Institute (GWI), a non-profit and leading research organization for the wellness industry. South Korea’s appetite for health and wellness products represents a significant export opportunity for Canada because of our abundance of natural resources and high quality, premium ingredients for nutritional supplements.

“To Canadian exporters, South Korea is a global juggernaut and it’s a very strong influence on the global marketplace. End products, or OEM (original equipment manufacturer) products, are used by South Korean companies to produce their own products. Food ingredients are interesting to South Korean players,” says Joy Rankothge, Export Development Canada’s chief representative for South Korea. In 2023, EDC opened an office in Seoul, as part of its renewed focus on the Indo-Pacific region.

For “Korea-curious” Canadian exporters eager to tap into the dynamic wellness and nutritional supplement or nutraceuticals market, the key to success is to research deeply, but act decisively, says Shawn Byun, sales team leader with Natural Life Nutrition (NLN), a BC-based manufacturer of supplements and the largest Canadian exporter of nutraceuticals to South Korea. 

“Even though we fully research the market in advance and prepare a new product, the popularity of it is over by the time we’re ready to launch. So, the advice is to choose an (export) item very carefully, but make a decision very quickly,” he says.

Like Canada, South Korea’s import landscape is highly regulated when it comes to nutraceuticals. The country’s Health Functional Food Code lists publicly notified functional ingredients that are already approved such as milk thistle, probiotics, green tea and gingko. For supplements not listed, exporters must apply to the Ministry of Food and Drug Safety (MFDS), the government authority overseeing labelling standards, as well and functional food policies. Organic products imported into South Korea must also comply with the South Korea’s labelling requirements and may display the Korea Organic Logo, or the Canada Organic Logo—or both.

Once in market, exporters will find South Korean consumers aren’t just trendsetters—they’re invested in researching functional ingredients and their health benefits, particularly through virtual shopping malls, like Naver Shopping, Coupang, SSG and Gmarket. In 2023, 67.9% of supplements purchased were sold online, according to a study by KHFF. Another 47% of study respondents bought supplements through other forms of e-commerce, like online marketplaces. 

Despite the barriers of distance, language and fast-moving health trends, Canadian exporters can benefit from the strength of our existing trade relationship, built through the 2015 Canada-Korea Free Trade Agreement (CKFTA), to enter South Korean markets.

Since 2021, 98.5% of Canada’s exports have been eligible for duty-free status with South Korea. That number is expected to reach 99.75% once the CKFTA is fully implemented in 2032. Preferential tariff treatment is also available for other products such as beef, grains and pork. In 2022, the two countries also signed a Comprehensive Strategic Partnership that aligns values, security and sustainability. 
 

In 2023, the Canada – South Korea Organic Equivalency Arrangement (CSKOEA) came into effect. The arrangement means that certified processed organic products in South Korea or in Canada may be sold as organic in either country, provided the terms of the arrangement are met.

Exporters can also rely on resources like EDC’s financial and knowledge solutions, which exist to help exporters understand where opportunities are and how to reduce export risks, says Rankothge. 

“EDC is looking to inspire more Canadian companies to seriously consider Korea as a market to explore, given the strong potential, he says. “Along with our current Team Canada partners, and the new partners we’re building relationships with on the ground here, we look forward to welcoming more Canadian companies to South Korea.” 

• EDC offers the Business Connections Program which promotes Canadian export capabilities to international buyers.
• EDC is enhancing financial and risk management solutions in the Indo-Pacific region. 
• Learn more about EDC’s Indo-Pacific strategy in South Korea and how EDC is building strategic and financial relationships to support exporters.
• Canada’s Trade Commissioner Service (TCS) helps exporters learn more about opportunities on the global stage and offers resources to find business solutions.