JEJU — "Bottled water produced in Korea is now subject to the label-free policy, while some imported bottled water, including products from China, is still sold with labels attached. From a consumer's standpoint, all of it is water consumed in Korea, so the same label-free standard should apply to imported bottled water in line with the policy's eco-friendly direction."
Kim Do-young, president of Jeju Province Development Corporation, met with reporters at the corporation's office in Jeju City on the 14th and said the same standard should apply to products competing in the same market. "Because only imported bottled water can carry labels, domestic products are being put at a disadvantage in terms of visibility," Kim said. Kim took office last month as the 13th president of the corporation.
The label-free policy for bottled water took effect this year. To reduce plastic waste, the government made label-free production mandatory for domestically manufactured bottled water sold online and in multi-bottle packs offline. Single bottles sold offline will go through a transition period through the end of this year before the rule applies from next year. Bottled water manufactured abroad and imported, however, is not subject to the same requirement and can continue to be sold with labels. "If it used to take a customer one second to find Jeju Samdasoo in a store, we believe it now takes more than 10 seconds since the switch to label-free," Kim said. "There is reverse discrimination in that imported products get higher visibility while domestic ones do not."
Kim also said he would work to strengthen Jeju Samdasoo's distinctiveness. He said consumer confusion has grown since the label-free policy took effect, with private-brand bottled water appearing in designs similar to Jeju Samdasoo. "It is somewhat inevitable that private-brand products follow or resemble the market leader," Kim said. "But because label-free products can be harder to identify than before, we are looking at ways to improve visibility by changing the design or colors so consumers can recognize Jeju Samdasoo more easily."
The corporation will also work to raise production efficiency through the Jeju Samdasoo L6 plant, which begins operating in the second half of next year. "We will not simply convert all of the added capacity into additional sales volume," Kim said. "Some existing production lines are slower and less efficient than L6 because of aging equipment, so we will adjust the production system efficiently, including allocating volume to the more productive lines." The corporation plans to use some of its existing lines for exports.
The corporation is also focusing on expanding overseas business. With growth in the domestic bottled water market stalled, it aims to develop overseas operations as a new growth engine. The core of Kim's overseas strategy is selection and focus. "We will narrow our export markets, currently spread across 16 countries, to about six including the United States, China and the United Arab Emirates, target them intensively and grow the size of those markets," Kim said. Jeju Samdasoo's annual output is about 1 million tons, of which overseas exports account for about 1%. "We plan to expand Jeju Samdasoo exports from the current 10,000 tons a year to 100,000 tons within three years," Kim said. "To do that, we will develop premium products suited to overseas markets." He added that the corporation is reviewing the market potential of each country and conducting market research focused on countries with strong water demand and promising premium bottled water markets.
China is the first target. Kim noted that although local bottled water brands hold a dominant position there, the market is large and its online distribution networks are well developed, leaving significant room for growth. "We are making China our first target because you need a large market to do business," Kim said. "If we make use of the 'K premium' that Jeju and Korea have, we should be able to appeal to consumers to some extent." The corporation supplied about 110 tons of Jeju Samdasoo to the Chinese market through JD.com in May and plans to analyze consumer responses before working out a strategy with local partners to expand sales.
The corporation will also launch premium products exclusively for overseas markets, actively using the regional brand of Jeju alongside Samdasoo, which enjoys strong recognition at home. "Overseas, Jeju is better known than Samdasoo," Kim said. "Jeju is linked to K-culture and has established itself as a brand with a good image in the global market, so we believe there is value in making more active use of the Jeju brand asset when entering overseas markets." The corporation plans to differentiate product design, brand storytelling and marketing, and to set prices according to income levels in each country.
At home, the corporation will maintain its existing consignment distribution arrangement with Kwangdong Pharmaceutical while building up its own online sales capabilities. It plans to draw on the expertise and market responsiveness of private partners offline, while concentrating staff and funding on online channels such as the Jeju Samdasoo Mall and on exports. "It is hard to say that a state-owned enterprise handling all distribution directly, under various constraints, is necessarily competitive, so we intend to keep offline distribution as it is, using private-sector expertise, innovation and speed while working in step with the corporation," Kim said. "But in the online market and exports, whose importance keeps growing, we will build up the corporation's own capabilities step by step."