Korea, as a country with a rapidly developing economy, is a promising and young market for network marketing. The peak of MLM development in this country was around 2017 - that's when many foreign companies entered the arena. In this article, we will explain why partnership projects should scale their business in this country, how the pandemic has affected the local economy, and list the TOP local network companies.

South Korean Economy

Initially, in South Korea, a very well-thought-out economic development strategy was implemented. They started with the development of agriculture and light industry because it required less investment. This way, they managed to create a large number of jobs and provide themselves with the necessary infrastructure (roads, energy supply, etc.).

Having the infrastructure conditions, Koreans began to develop industries - metallurgy, aviation, shipbuilding, etc. - this is the second stage of the country's economic prosperity. During this period, local businesses actively started attracting foreign capital and importing technologies.

South Korea became an example of a country that, through the hard work of its people, managed to build a major financial center on the continent from scratch. Currently, they rank 4th in Asia and 11th in the global charts in terms of GDP. In 2010, the average income per capita in South Korea was $31.8 thousand, in 2015 - $38 thousand, and in 2019 - it increased to $43.5 thousand.

The next and quite logical stage of the country's development, where the population's income level is steadily increasing - is the strengthening of the MLM sector. Everything indicates an incredible potential for the advancement of network marketing companies in South Korea.

MLM Statistics in South Korea

As the retirement age in the country keeps decreasing and people retire early, they are looking for ways to earn extra income. Network marketing is an excellent alternative to starting a business that does not require large capital investments.

In 2017, at its peak, the sales volume in network marketing reached $4.5 billion, and by 2018, it had grown to at least $4.6 billion. There are over 8 million South Korean distributors in network marketing, many of whom are retirees.

Features of the mentality of South Korean networkers

Key nuances of consumer thinking that every company planning to scale into the South Korean market should be prepared for:

- High demands on products and services. People here won't buy a pig in a poke. The main rule for any business playing the long game is customer orientation and quality goods.

- South Korean consumers are tech-savvy and prefer to shop online. At the same time, they will not hesitate to meticulously study all the information, reviews about the company and its products.

P.S.: Koreans will generously comment on your posts on social media, and after buying your product, they will leave a review with a 75% probability. For comparison, in Russia, less than 10% of consumers leave feedback.

- Love for status and fashionable items. Local people can confidently be called materialistic - they aspire to live the life depicted in the media, where money is synonymous with success.

P.S.: In Korea, the luxury segment of goods is rapidly and relatively easily advancing.

- Fewer people are interested in local brands, and the market is saturated with promotional offers. Buyers prefer foreign goods at lower prices and are less supportive of local producers.

P.S.: Local entrepreneurs, as part of PR, distribute goods to people for free. First, they fight for the hearts of customers, and only then - for the wallet.

- South Koreans are focused on self-improvement and gradual increase of their income level. That's why, upon learning about affiliate marketing, many people not only form partnerships with network companies but create their own MLM projects.

Apparently, the general portrait of a local resident is an example of an ideal networker. The diligence and education of the local population play a significant role in how quickly the affiliate marketing industry develops. However, in a country with a literacy rate of 98%, scandals related to investment pyramids have also occurred. As the saying goes, "there is always someone smarter than the smart one."

Financial Pyramids in South Korea

In South Korea, as in any other country in our world, there have been loud scandals related to financial pyramids.One of the most interesting cases was the arrest of the creators of a cryptocurrency pyramid in 2019.In total, about 56,000 people suffered from the activities of these scammers, who invested over $18.7 million in the pyramidal crypto project. The police were able to catch the criminals only with the help of an investigative mechanism based on artificial intelligence (AI).

It worked roughly like this: investors paid an annual club fee - $388 for regular membership and $865 for premium. Also, there was a referral program (a bonus for attracting other investors). All transactions were converted into M-coin tokens, which are not listed on any well-known cryptocurrency exchange, but the organizers guaranteed a 300% growth.

In the article Network Marketing VS Pyramids, we have already explained how financial scams work and how to expose them. To avoid falling into such an adventure, increase your financial literacy, carefully read the documentation and terms of the marketing plan of companies, study the quality of its asset - the product on the sales of which the project will earn and pay commissions to distributors.

How the pandemic affected direct sales in Korea

In 2020, in the midst of the pandemic, the number of MLM companies decreased, but the decline was not critical. Most likely, networkers' activity decreased due to strict social distancing measures.

But in 2021, the number of network projects started to grow again - the government is taking measures to more effectively regulate the MLM industry and reduce losses for the population. All existing companies in South Korea, more than 130 projects, operate officially and most of them have signed contracts to join a kind of "cooperative mutual aid network" - this agreement obliges companies to compensate for losses and prevent any harm to consumers.

Some companies have refused to sign agreements to compensate consumers (for example, GNGP and Pacos Korea), which has had a very negative impact on their reputation.

Top Network Companies in South Korea

As in most countries around the world, the list of top companies includes AMWAY, HERBALIFE, ATOMY, NUSKIN, UNICITY - they are annually part of the Top 50 Best MLM Projects in the World. Among the lesser-known industry representatives, we have highlighted:

ARIIX

Project website - ariixcis.ru

Year of foundation - 2011, America

Specialization - dietary supplements, weight loss products, and cosmetics

Ariix was founded by experienced networkers, and in the first year of the project's existence, their turnover was $32 million. In 2013, they grew by over 30% and increased turnover to $42 million, and in 2014 they entered the international arena, grew by over 70%, and reached a turnover of $74 million.

Ariix has a fairly complex hybrid, multi-line marketing plan and a well-thought-out bonus program; partners receive 50% of the product cost as commissions.

SEACRET

Project website - seacretspa.com

Year founded - 2005, America

Specialization - cosmetics and personal care products

The strong point of Seacret Spa International is their product, which contains Dead Sea minerals, salts, and therapeutic mud that nourish the skin. As appearance is one of the main values for Koreans, the Seacret product line quickly became popular in the Asian market.

At the core of Seacret lies a binary marketing plan, with 14 partner ranks and 5 types of bonuses. To become a company partner, you need to pay a $49 starter fee, purchase products worth at least $50, and pay an annual subscription fee of $49.

APHROZONE

Project website - aphrozonemy.com

Year of establishment - 2013, America

Specialization - cosmetics, skincare products, and equipment for home cosmetic procedures

Within the company, there are two flagship brands - the Ruby line of cellular cosmetics and the ATO Rak line of skincare products. The company has developed a hybrid marketing plan, but they attracted consumer attention through an innovative product line.

As we can see, judging by the TOP of popular companies, one of the most relevant topics in South Korea is beauty, health, and youth. The easiest way to scale into this market is for projects from the Health and Beauty sphere with an innovative physical product.

And if you are interested in comparing the features of the business sphere in South Korea with other countries, we recommend watching:

- Features of network marketing in Ukraine;

- Features of network marketing in Poland;

- Features of network marketing in Romania;

- Features of network marketing in Finland;

- Features of network marketing in Belgium;

- Features of network marketing in Austria;

- Features of network marketing in Spain;

- Features of network marketing in Kazakhstan;

- Features of network marketing in America;

- Features of network marketing in China;

- Features of network marketing in Bulgaria;

- Features of network marketing in Turkey;

- Features of network marketing in the UAE;

- Features of network marketing in India.

Network Marketing in South Korea