Matthew Miller
Jul 20, 2020

Patriotic streak: Many international brands lose ground in Korea

ASIA's TOP 1000 BRANDS: With Adidas, Gucci and Bud Light as notable exceptions, it was a tough year to be an international brand in Korea—especially if your brand is from Japan.

Patriotic streak: Many international brands lose ground in Korea

SOUTH KOREA'S TOP 100 BRANDS: RANKING ANALYSIS

A perusal of the Top 100 brands as chosen by consumers in South Korea in this year's Asia's Top 1000 Brands research reveals that a preponderance of the brands losing ground since 2019—including many of those falling the furthest—hail from overseas, with Japanese brands suffering some of the worst blows. At the same time, the number of locally owned brands gaining ground is also notable. 

Top 10

The trend is visible in the top 10, where Samsung, LG and Chanel held on to the first three positions while Lotte moved up a spot to fourth; that makes 75% of the top four brands local concerns. 

Meanwhile, both Starbucks (seventh) and Coca-Cola (eighth) moved up by one position. Then there are two new top-10 members: Gucci, which rose five slots from 14th last year to take the ninth spot, and Nestle, which gained two spots to occupy 10th. Those two bumped Johnson & Johnson (from seventh last year to 11th) and local search-engine/portal Naver (from 10th to 12th).   

Gucci's strong rise can perhaps be partly attributed to the brand's signing of mega-popular singer and actor Lee Ji-eun (aka IU) as an ambassador. Lee made headlines when she appeared with the brand's designer Alessandro Michele at Milan Fashion Week in February (pictured below).

(Getty Images)


Biggest gains

Looking at the brands that made the biggest advances, two of Gucci's peers, Dior (+17 to 66th) and Louis Vuitton (+31 to 90th), suggest a rising tide in the luxury segment. However, that tide didn't lift all yachts, as Burberry saw one of the year's biggest drops  (-23 to 78th). 

Adidas enjoyed the biggest gain among the top 25, going up eight spots to 14th. And again it seems that a K-pop association is at least partly to thank: The youth-aware brand released a collection with popular quartet Blackpink in late 2019.

Korean Air made a somewhat surprising improvement (+19 to 35th). The flagship carrier clearly remains a point of pride even though it reported that its sales dropped by 2.5% as it lost $529 million in 2019 (and that was before the pandemic hit).

Korea-owned convenience chain GS25 improved 14 spots and now sits just outside the top 25 at 33rd. The brand reportedly surpassed rival CU in number of stores (nearly 14,000) and per-store revenue early this year. The brand's partnership for with Seoul Broadcasting System on a drama series, 'Backstreet Rookie', which was largely set in a GS25 store, might have played a role here, according to Jay Lee, senior vice president and MD with GroupM agency Essence in Seoul.

Hyundai Motors made one the second biggest gain in the top 100 (the biggest gain will be explained later on), moving up 138 slots to 65th. The brand has introduced a completely revamped model lineup and has made strides in build quality, said Lee. See "Korea's love for homegrown companies isn't just about national pride" and "South Korea wants brands that make life better—on all levels" for more discussion of Hyundai's rise and the factors that made other local brands successful.

Other notable risers:

  • A pair of Korean food companies, Samyang (+32 to 74th) and Ottogi (+19 to 72nd)
  • Dove (+16 to 53)
  • Heinz (+19 to 54)
  • Facebook (+38 to 62)
  • Tyre-maker Hankook (+18 to 64)

Worst falls

Sony took a remarkable plunge among Korean consumers, not only for the main brand, which dropped 31 spots to 52nd, but also for Playstation, which fell 44 spots to 93rd. These declines reflect (and are a factor in) the brand's first-ever drop out of the top five in our all-brand, all-APAC ranking—a fall that made room for LG to ascend there.

Another Japanese electronics brand also experienced an even more devastating drop: Panasonic fell 42 places, from 98th last year to 142nd. 

Clearly, these drops reflect widespread consumer boycotts of Japanese goods that took place starting in summer of 2019 as part of a trade dispute with Japan, which itself served as proxy for longstanding enmity between the two nations. However, national pride is not the only factor driving the change (again, see "Korea's love for homegrown companies isn't just about national pride").

Other brands that lost notable brand equity include: 

  • Haagen-Dazs (-15 to 73)
  • Nutella (-28 to 81)
  • McDonald's (-23 to 82)
  • Gatorade (-23 to 88)
  • Evian (-27 to 99)
  • A few more who have fallen right out of the top 100 (see below).

In and out

Brands joining the Top 100 (but not already mentioned) include KakaoTalk (+107 to 34) because we added a messaging category this year, Instagram (+96 to 80), Car-rental agency KT Kumho (+20 to 85) and, most eye-poppingly, Bud Light, which rocketed upward by an extraordinary 679 spots to reach the final slot on the list of 100. Essence's Lee attributes this change to Korean consumers rejecting formerly popular Japanese brands due to the geopolitical tensions. Japanese brands used to account for 50% of the beer market, but now it's "all gone", Lee said. Convenience and grocery stores likely gave some of that all-important shelf space to the AB InBev brand, which also has a taste profile that suits Korean beer fans, Lee said.

The list of brands that fell out of the Top 100 shows a surfeit of MNCs, with Panasonic (mentioned above) joined by Hilton (-57 to 154) and Mastercard (-46 to 131), followed by Lipton (-32 to 109), Armani (-26 to 102) and Lego (-9 to 105). Local restaurant chain VIPS fell 37 spots to 101; the chain has closed more than a third of its locations, and it seems that its noodle-making robot chef may have been poorly received. 

 

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