New Zealand cleaning products company ecostore has signed a deal that will see the company export to South Korea from next year, a destination being viewed as having "huge potential" for New Zealand business.
New Zealand's Trade Commissioner for Korea Ryan Freer said the country was a growing market for New Zealand following the completion of a free trade agreement last month, and said he expected to see many more Kiwi companies taking advantage of export opportunities to the country.
"I see increasing opportunities in Korea for New Zealand exporters and this free trade agreement. Once it's in place, it's going to increase the competitive position of our exporters against many of our exporting competitors and that's going to open up a lot of opportunities in the market," Freer said.
"South Korea is a market of affluent and sophisticated consumers where demand for premium natural and organic products is on the rise. Ecostore is an excellent example of a company taking advantage of NZTE's services to grow and prosper in international markets."
The free trade deal would give businesses a lot more freedom to export and trade globally, with fewer restrictions as well as giving companies equal rights when bidding for government deals in other countries.
Freer said New Zealand already exported a number of products to South Korea with ICT, food and beverage and natural products, including healthcare, seen as high growth areas for exports. In 2012, New Zealand exported around $628 million of food and beverage goods to the country, with dairy products making up $193 million, and meat making up $205 million. Freer added that New Zealand was well placed to benefit from these exports.
"South Korea's consumers are demanding quality and products they can trust so our exporters in this space are certainly well matched to meet that demand," Freer said.
Ecostore is aiming to start exporting to South Korea early next year, in a move that chief executive Malcolm Rands said was "a huge deal" for the business.
"South Korea is one of the most advanced online markets in the world, with some of the product categories ecostore operates in showing up to 80 per cent of the category sales coming from online," Rands said. "Korea is New Zealand's [fifth] largest trading partner with bilateral trade worth $4 billion which will rise with the new agreement the two governments have formed; this is a huge deal."
With a population of 50 million and retail sales in the cleaning, personal care and skin care categories totalling $6.26 billion, South Korea provides a significant opportunity for ecostore.
The company has collected several awards this year, including two at the NZI National Sustainable Business Network Awards for its roll-out of Carbon Capture Paks - bottles made from sugarcane that minimise the amount of carbon released into the atmosphere. Ecostore is reportedly the first company in the world to replace its entire packaging with the carbon neutral bottles, something Rands said had helped them to secure the South Korean deal.
"Korean consumers are highly conscious of the chemicals they use on themselves and especially their children," Rands said.
"Now South Korea is arguably the most aware country in the world about nasty chemicals, hence the strong fit with ecostore. They loved if we have any concerns about a chemical we find a healthier alternative and the Carbon Capture packaging was incredibly well received."
Ecostore will partner with South Korean start-up company Ellusben, led by chief executive Cho Jae-Yong. Rands said Ellusben offered a significant opportunity for ecostore, with the South Korean company focused particularly on the "mother baby" market.
"Becoming a parent is a key driver for people altering their habits to ensure they live a healthier lifestyle," Rands said. "When you combine this with Koreans' concern for nasty chemicals it is a significant opportunity for ecostore."
*South Korea is the world's 13th largest economy
*It is New Zealand's fifth largest bilateral trading partner with two-way merchandise trade totalling around $4 billion
*Its rapid economic growth has been export-led
*New Zealand exported around $1.7 billion of products to South Korea last year
*Food and beverage exports account for 41 per cent of exports to South Korea at $628 million