SEOUL, Dec. 18 (Korea Bizwire) – Famous Korean snacks have captivated the taste buds of Asian consumers, making overseas sales more important for local confectionery companies grappling with slower growth on home turf, data showed Friday.
Major Korean confectionery companies are increasingly setting their sights on a wider market after seeing robust growth in China and Southeast Asia over the past years.
Orion Confectionery Co. is leading the latest trend with double-digit growth in sales of its potato chips, choco snacks and chewing gum in China.
The company’s overseas revenue accounted for 68.5 percent of 1.69 trillion won (US$1.42 billion) in sales through September, its regulatory filing showed.
Sales in China jumped 15.9 percent on-year to 994.5 billion won during the period, seeing its ratio rising from 42.9 percent in 2011 to 58.7 percent of the total this year.
Orion launched Chinese operations in 1993, and now runs five plants in the country, including in Beijing and Shanghai.
In contrast, its domestic sales have continued to fall since 2012, with sales in the January-September period slipping 5.6 percent from a year ago, it said.
Lotte Confectionery Co., a food unit under retail giant Lotte, also has stepped up its overseas push through a series of merger and acquisitions as well as local partnerships.
Lotte acquired Belgian chocolate maker Guylean in 2008 and took over food brands in China, Vietnam, Kazakhstan and India to target local customers.
Out of 2.6 trillion won sales last year, Lotte Confectionery said it earned 800 billion won in foreign markets.
While the ratio of its overseas revenue rose from 14 percent in 2010 to 30 percent in 2014, its domestic sales has remained at a similar level over the past five year, it said.
Market watchers say the upward pace is expected to continue next year on the back of growing middle-class consumers in China.
“China’s confectionery market temporarily slowed down in 2014 and 2015 due to an anti-corruption campaign and Korean discount markets’ withdrawal from China, but it is expected to recover next year considering the household income growth,” Baek Woon-mok, an analyst at KDB Daewoo Securities, said.