S.Korean foodservice companies’ entering to US expanded in 2022

South Korean foodservice companies expanded their presence in the US and Japan, while facing declining prospects in China due to COVID-19 restrictions in 2022.

According to a report by the Korea Agro-Fisheries & Food Trade Corporation (aT), only 4.2% of the 2,999 South Korean foodservice companies surveyed from July to December 2022 had expanded overseas, totaling 124 restaurants. The number of South Korean restaurant brands reached 141, and the number of stores totaled 3,833, spread across 35 countries.

The US was the most popular destination for the surveyed foodservice companies that expanded overseas with 46, followed by Vietnam (37), China (36), Japan (31), Thailand (23), the Philippines and Australia (22 each), Malaysia, Singapore and Hong Kong (21 each), and Indonesia (20).

Based on the number of stores, the US had the most with 673, followed by China (648), Vietnam (519), Canada (236), Thailand (210), Taiwan (209), the Philippines (190), and Japan and Malaysia (135 each).

The number of stores increased in the US and Vietnam by eight each and in Japan by 10, while China decreased by 11.

South Korean foodservice companies that entered China decreased from 65 in 2020 to 47 in 2021 and to 36 in 2022, and the number of locations decreased from 1,368 to 886, then to 648, experiencing a sharp decline after two years. According to aT, "In 2021, there were the most companies that hoped to expand to China and Taiwan, but due to COVID-19 restrictions, the relative preference decreased compared to other countries."

Out of the 2,999 surveyed restaurants, only 70 had plans to expand overseas, with the top three preferred destinations being Vietnam (20), the US (18) and Japan (10), followed by China (9) and Thailand (5). Compared to the previous year, Vietnam increased by eight, while the US and Japan increased by seven and four, respectively, and China decreased by eight.

When selecting overseas locations, factors such as local preference for Korean culture (31%), availability of ingredients (16%) and the size of the local foodservice market (13%) were significant considerations. Conversely, the current state of Korean expats in the region (11%) and geographical proximity (10%) were relatively insignificant, as more cases focus on local customers instead of Korean expats.

Out of the 2,999 surveyed restaurants, 2,752 (91.8%) had no plans for overseas expansion.

Write to Ji-Yoon Yang at yang@hankyung.com