Potential Sales and Distribution Channels for Imported Books in Korea

Recently, we have been exploring the Korean book market through excerpts of our Selling Canadian Books in Korea market guide. In today’s post, expert authors Tony Michell and Darwin Shim outline this market’s potential sales and distribution channels for imported books.

General Guidelines

  • There are no special restrictions or tariffs on books. Up until the end of 2011, importers were required to obtain a Certificate of Recommendation from the Korean Ministry of Culture in order to identify and censor subversive content. However, the law has been changed so that books are evaluated after they have entered the Korean market, and only if they garner negative publicity. Foreign publishers in Korea comment that this isn’t a significant issue as even books about North Korea are approved and published.
  • It is possible to find agents who specialize in importing French, German, and English books and will guide a publisher through the entire process.
  • Major bookstore chains such as Kyobo, Bandi & Lunis, and Youngpoong will happily display imported books.
  • In the case of children’s books, importers and publishers like to purchase whole series, bundle them together, add an audio tape, and sell the package to parents who expect to buy on this basis rather than title by title.

Sales Channels

In Korea, the brick-and-mortar retail sector for books is heavily polarized toward the large franchises. The remaining medium to small independent bookstores are privately owned, family-run stores that are facing increasing challenges in the current market. An exception is used bookstores, which experienced a revival following the introduction of the bill to limit discounting practices in 2014. A prime example is What the Book?, located in the ex-pat district of Itaewon, which specializes in used foreign books.

There is additional competition in the online retail sector, specifically with the three largest players—Yes24, Interpark, and Aladin. Following the introduction of the discounting bill in 2014, they were forced to concede their overwhelming competitive advantage and now must contend with books being more uniformly priced across various points of sale.

There are no statistics on international book acquisitions for Korean libraries. While libraries have traditionally represented an area of guaranteed sales, recent anecdotal evidence suggests that libraries are acquiring fewer titles year-on-year, especially public libraries. Since the previous edition of this report, published in 2012, automated inventory analysis systems have become the norm, and it is clear that Koreans have less interest in reading foreign books. We expect sales to continue to decline in this sector, despite growth in the number of libraries.

Brick-and-Mortar Bookstores: The year 2012 represented the lowest point in the Korean book industry, which had been declining at a rate of 5 percent per annum since 2010. There was a major leap in 2013, when Korea Creative Content Agency (KOCCA) started including used books and miscellaneous offline sales in their statistical model. The rate of decline has levelled since 2013 to CAGR 2.3 percent. The government has taken credit for this and attributed their efforts to regulate the maximum discount off list prices as the reason for the stagnated rate of decline.

Major brick-and-mortar bookstores are no longer forced to compete with each other in discount wars. The companies listed below represent nearly a fifth of offline sales and fall under the Mega to Large scale. Youngpoong was the only major player that recorded growth in 2015, supported by their decision to open new, smaller locations as the larger players retreated from minor segments of market.

Mega-sized stores have not been immune to the declining market. They were hit especially hard with the introduction of the 2014 discount bill. Their competitive advantage against smaller stores disappeared nearly overnight, as evidenced by the minor growth shown in the number of medium to large stores.

Public Libraries: Public libraries represent a form of guaranteed sales as their numbers continue to increase, but foreign publishers may find this a challenging outlet for export sales. In 2013, it was reported that the National Assembly Library spent 23.9 percent of their acquisition budget on international titles. However, it was later revealed that 7 out of 10 foreign books had never been checked out. This created a minor uproar, and the library was asked to be more scrupulous in spending taxpayers’ money.

School and University Libraries: Korean school and university libraries have significantly larger budgets than their public counterparts—more than four times the amount to spend. Canadian exporters can sell directly to Korean school and university libraries by contacting librarians, professors, and bookstores.

While publishers may contact any of the three listed above, it is worth noting that Korean university librarians have the final word and oversee the budgets to purchase books. Budgets are based on books requested by professors. In previous years, professor- requested books were sourced by librarians from specialized indexes, advertisements, and various promotional materials. Today, librarians are more likely to purchase books via dedicated accounts at Kyobo and other online stores or order directly from Amazon. Where once academic journals were a major hard copy purchase, libraries are increasingly choosing online access through repositories like JSTOR.

When considering the Korean university book market, Canadian exporters should bear in mind that photocopying original textbooks (i.e., pirating) is widespread among Korean university students. It is estimated that in the past, university students pirated ₩700 billion in books per year. Photocopying is no longer cheap in Korea, and student editions often compete with illegal copies.

Online Retailers: Online retailers of print books were expected to be hit the hardest after the 2014 discount bill. They have instead diversified into used book sales and flourished alongside ebook sales. This channel accounted for 18.1 percent of all sales in 2015 and continues to grow.

Book Fairs: There is only one major book fair of note in South Korea, and that is the Seoul International Book Fair (SIBF) held in June, which features books from every genre and walk of life. The event is organized by the Korean Publishers Association (KPA). All Korean agents and publishers attend to sift through the titles of the many exhibitors in search of gold.

Publishers of French-language books may be interested in the Seoul Wow Festival, an event that takes place in early October, jointly hosted with the French Embassy. The emphasis is on exchanging and celebrating aspects of the French language and its culture, and attendance could be of interest to French-Canadian publishers.

Distribution

Koreans will import books that they think will sell, but are often unaware of many of the books available unless they appear on foreign bestseller lists. The English- language institute YBM Sisa used to send buyers out every year to look for new books, but today these efforts have largely been replaced by Internet research.

Wholesalers: A typical contract with a distributor/wholesaler involves negotiating supply and the form of trade. A contract is subsequently drawn up with necessary paperwork. This is followed by discussions on when books should be delivered to stores.

Ebook Distribution: There are two primary methods of ebook distribution. Direct distribution, meaning that each publisher must register their ebooks with every individual e-retailer in the market, or submitting ebooks to the Korea Productivity Center (KPC), which then acts as a wholesaler. The latter is the preferred option among small- to medium-sized publishers.

Print-on-Demand: Print-on-demand services are increasing in Korea. Costs are relatively cheap. Before proceeding with any print-on-demand service, it is important to consider and negotiate the quality of paper and cover treatments, as this could greatly influence final costs.

For more detailed information and guidance on how to succeed in this market, download our Selling Canadian Books in Korea market guide today.

11/09/2017 | Book Fairs, Digital, Distribution, Export, Market Guides