How South Korea Became a Consumer Product Juggernaut
An example in the Matthews portfolio is Orion Corp., a snack manufacturer that has been moving into mass consumer markets in China, Vietnam and Russia.
Orion discovered that it could export to China the same products it sold to its Korean customers and “not really change their marketing strategy,” Oh says.
Other consumer goods companies seeking to expand outside Korea are KT&G, (Korea Tobacco & Ginseng), a tobacco company; CJ CheilJedang, a food manufacturer; and Amorepacific, a personal care and cosmetics company, according to Samsung Securities.
As the firm’s analysts wrote: These companies “have consistently offered products that reflect an understanding of consumer needs, and are likely to do well overseas.”
But some analysts think domestic-oriented companies, including banks and insurance ones, will gain attention from investors, as Korea’s policymakers shift focus to growing domestic industries as a means of spurring jobs growth, according to JPMorgan’s Asia Pacific Equity Research.
Oh likes Korea’s life insurers now, given that the average income in Korea is half that of Japan, and should continue to grow.
“We’re focusing on companies and industries that will benefit from growing income growth in Korea,” he says.