February 28, 2023
SEOUL – Four years since the “No Japan” boycott in South Korea, Japanese goods are making a comeback in the local market.
The boycott, which followed Japan’s introduction of control on exports of some of its key products to Korea, was one of Korea’s biggest economic boycotts conducted on imported goods.
Japanese clothing retailer Uniqlo, one of the brands hit the hardest in the nation by the “No Japan” boycott, said through its annual earnings report for 2022 that the brand saw its operating profits more than double last year in the Korean market.
According to FRL Korea, the domestic distributor of Uniqlo, the brand’s Korean sales in 2022 rose 21 percent year-on-year, with its operating profit more than doubling to 114 billion won ($86 million).
The figure shows drastic improvement from Uniqlo’s Korean sales recorded in the fiscal year of 2020, shortly after the boycott began.
During that time, Uniqlo’s Korean sales had been halved from 2019, while recording 88 billion won in operating losses.
“Recently, (Korean) consumers’ sentiments toward Japanese goods have considerably thawed with the recovery of consumption following the pandemic entering the endemic phase,” said an official from FRL Korea.
“Also, retaliatory consumption did have an effect on retailers in the country,” he added, referring to a trend in which consumers make up for missed shopping during the coronavirus pandemic.
A slew of other Japanese companies also reaped profits last year. The Korean unit of Japan-owned shoe and clothing retailer ABC Mart Korea announced that its operating profits more than tripled from 2021.
In addition, Japanese sports brand Asics turned in an operating profit of 480 million won in 2022 after being the red in 2021 with an operating loss of 340 million won.
Descente Korea, the Korean unit of the popular Japanese-based sporting brand, also turned a profit for the first time in 2021 after being in the red since the 2019 boycott, according to the Financial Supervisory Service.
Hyundai Department Store’s sales of Japanese home appliances and games also recorded double-digit increases from 2021.
Hyundai Department Store, which retails a number of popular Japanese electronic products from big brands such as Nintendo, Balmuda, Sony and Canon, said that its sales of Japanese electronics products grew by 15.7 percent in 2021 and 18.9 percent in 2022.
In 2019 and 2020, Hyundai Department Store’s sales of Japanese electronic products had grown at an annual average of 1 to 2 percent.
According to the Korea Customs Service’s import and export trade statistics, Korea also logged record-high annual imports of Japanese beer since 2019, logging 14 billion won in 2022.
The number is double the amount of Japanese beer imports logged in 2020, and a 70 percent increase from 2021.
“Consumer sentiment for Japanese products seems to be further recovering due to the record-low won-yen exchange rate and the resumption of visa-free travel to Japan,” said an official from FRL Korea.
“However, it is still risky to initiate a full marketing tactic of Japanese goods (for Korean retailers), as the issue of the boycott is still on the wait-and-see mode, with Japan’s historical conflicts with Korea still yet to be mended,” he added.