South Korea is a particularly interesting emerging market, with a population of 48.5 million earning an average of $2,000 a month, and only 2.9 percent of people below the poverty line, compared with 3.5 percent in Italy, for example. The Republic of Korea ranks 12th in terms of GDP with a total of $786 billion, just behind Brazil's GDP of $796 billion.

Its economic relations with the European Union are aided by a Free Trade Agreement signed in October 2010 and implemented on July 1, 2011. It calls for the abolition within five years of import duties on boths sides for 98.7 percent of the products trade between the two countries. This is the first, and for the moment the only, free trade agreement that the EU has signed with an Asian country. It is the largest every signed by the EU.

The agreement concerns goods and services produced in Europe and South Korea, respectively, so the “Made in” label takes on crucial importance. The criteria on which a product can be defined as “Made in” Europe or Korea are laid out in detail in the text of the agreement. Eyewear is consequently in the front line as one of the major products traded between Asia and Europe, and the EU is using it as an example to establish the definition of the “Made in” label.

It is difficult to ascertain the precise figure for customs duties for the different types of eyewear products, as various characteristics apply to eyewear. The duties paid by European importers on most products vary from 8 to 10 percent. However, industry officials indicate that the cuts in customs duties will not be sufficient to make Korean companies more competitive than their Chinese rivals for contract manufacturing.

Labor costs have risen sharply in Korea in the past few years, and have even overtaken Europe. In other words, the Korean eyewear industry may be of greater interest for Europe as a consumer than a producer, but its relative successes in other parts of Asia indicate that there may be some potential for some Korean brands in Europe, especially after the Free Trade Agreement goes into full effect.

The Korean eyewear industry was represented last month by the 202 exhibitors at the 11th edition of Diops, the annual Daegu International Optical Show. The industry is comprised mainly of small and medium-sized companies, which generally own their manufacturing facilities, and export up to a third of their total production. The show is particularly significant in that it focuses more on exports than on the domestic market, though there were also a few companies showing European – particularly Italian – products.

None of the major international players were represented at the fair through their subsidiaries or through distributors, who have their own arrangements for their sales to the domestic market. Safilo and other major companies hold their own private product presentations at different times of the year, generally in Seoul.

Safilo and other major European companies have reported a major recovery in their Korean sales lately. A few years ago, De Rigo took a 20 percent stake in a joint venture with its local distributor, See Hoon, which didn't exhibit at Diops, and with which the Italian group did good business. Three or four years later, when the won was devalued, its sales dropped off, but in 2011 the situation righted itself, and sales increased significantly in the first quarter of 2012. De Rigo exports only sunglasses to South Korea, where they sell in department stores and duty-free outlets. See Hoon rents the premises at this stores for six months of the year, during which it sells the De Rigo brands in its portfolio.

Diops' attendance figures indicate that there is still some way to go to attract international visitors to the show in Daegu – as only 4 to 5 percent of the 16,641 visitors were foreign. In 2011, the 10th edition had 208 exhibitors (169 domestic and 39 foreign). The standard booths were 12 square meters this year, compared with 9 square meters last year, with exhibition space covering a total of 20,077 square meters. In 2010 the show had 173 exhibitors (136 domestic, 37 foreign). Visitor numbers were 16,159 in 2011, up from 15,156 in 2010, resulting in annual growth of 4.8 percent. An estimated $20 million worth of business was done during the show.

South Korea is challenging its neighbors – Japan more than the Chinese giant – in the race to conquer foreign markets. To sustain exports, the South Korean government has decided to focus on raising the quality of small and medium-sized producers that have already reached good standards of production, and the country's eyewear producers are a major force in this category. Korean Trends reports an increase of 16.5 percent earmarked for the state R&D budget for 2015. Some 40 percent of this budget – over 2 trillion won - equivalent to $1.7 billion or €1.4 billion – will go to small producers.

The contact lens sector is growing strong in South Korea, with domestic sales up by 15-20 percent in the last year, but the local contact lens industry is gaining ground abroad. Si-Chul Rho, chief executive of one of the country's main contact lens producers, Interojo, told the local press that at the rate its export sales were growing, he expected to reach the $100 million mark in the near future. Young-Gyu Kim, CEO of another contact lens producer called Dreamcom, said that last year their export sales were worth over $2 million, and that they expected to reach $3 million in 2012.

South Korea has more than 8,000 optical retail outlets, about 2,500 of which belong to organizations of various sizes. The other two-thirds – 5,500 – are independent stores, 200 of which are particularly small. However, the fragmentation of the retail sector is making it difficult to sell into the market.

In the words of Jeong Bae Lee, chairman of the Korean Optometric Association, the eyewear retail business is ruled by a form of antitrust law – “One owner, one shop” – which means exactly what it says, so there are consequently no official chains. But organized retail activities are permitted in a cooperative form, in the form of buying groups and franchises. Luxottica could never get into the rich Korean market by buying a chain, as they don't exist in the form typically known in the West. And in the organized groups the individual owners are all decision-makers, making it extremely difficult for the giants of the international eyewear market to impose their strategies.

The One Owner One Shop rule doesn't rule out a form of centralized decision-making, in the form of delegation to an optician nominated by the group. The intensity of the decision-making capacity varies considerably. Sometimes this delegation is the condition that an individual optician has to accept if he wants to enter the group. In other cases, the personality of the leader may be so strong that nobody questions his choices. In any event, candidates for the position of chairman must be owners of a retail store.

In the best-organized groups there is a central office with a marketing team working for the members. This office might include brand designers, store furnishings and promotional materials all available for members. In some cases the manager of the central office may also propose products to the members, but cannot impose them.

Organized retail is dominated in Korea by Tomato D&C (, which defines itself as a chain, and is a buying group with 660 outlets. Park Dae Seong became chairman in 2011. He visits the international fairs such as IOFT in Japan accompanied by the buyers from the group who have the power to decide on purchases. The second-largest group also calls itself a chain, Davich Optical Chain Store, with 150 modern outlets. Its chairman, Inkyu Kim, makes the decisions.

Other interest groups include Gallery Optical Company ( with 28 outlets, mainly in Busan, Korea's second-largest city. The group is headed up by Kim Kidon, who has being doing business with the Japanese manufacturers for years, and visits the fairs with a dozen managers of stores in the group. Nunsarang Optic, managed by Kim Chan Young, has 22 stores in Busan and another 47 franchise outlets in the rest of Korea.

Look Optical is another interesting Korean company, organized on a franchise basis with 80 large, trendy stores in the most prestigious areas of the main cities, in the buildings and shopping malls alongside elegant cafés, bookshops and high fashion stores. Decision-making is highly centralized in the hands of the CEO, Myeonghhyo Heo, and one of the managers, Jiyun Kim.

Look Optical has invested $7 million in furnishing and fitting out its stores and in advertising campaigns. The franchising contract, with 80 franchisees, gives Look the right to choose the lines and volumes it distributes to franchises, while the individual optician may also sell certain other products, if agreed to by Look. The optician will be invoiced by Look for the goods supplied, and will also pay Look royalties of 2 percent on sales.

Thanks to this system, Look Optical closed 2011 with turnover of $100 million, up by 10 percent over 2010. The company sees the franchise system as very advantageous, and plans to export it to other countries, beginning with another Asian country. Look Optical claims to be most popular with the young and dynamic consumer, while the older generation would seem to prefer the Davich chain.

Look Optical is also a producer and distributor. It has five house brands of eyewear and one accessory brand called Macos Adamas. Its eyewear brands are Salvator Rosa, Anthony Brown, El Cid, Tosti and O'2nd. Look has no production facilities. Around 80 percent of its products are made of injected granular acetate from Korea, while the rest are made of acetate produced respectively in China (15 percent) and Italy (5 percent). No strip acetate is produced in Korea.

Look is also the exclusive distributor of 18 major foreign brands including Fendi, Calvin Klein, Salvatore Ferragamo, Lacoste and Valentino. It has the Hello Kitty license for the Korean market, and a strong relationship with >Italy's Sover. While Look has the exclusive distribution for the Italian company's Alviero Martini, Laura Biagiotti and Marlboro Classic brands, Sover produces two of the brands for which Look has the Korean license – Marie Claire and Jack Nicklaus.

And finally, Look Optical distributes 12 brands of ophthalmic lenses and contact lenses, such as CooperVision, Acuvue, Zeiss and Essilor, and two Korean-made brands, Bando Optical and Interojo.

The difficult transition from the traditional and familiar style of eyewear retailing to a system of organized, professional distribution can be seen through the experience of Open Optical, a Korean eyewear producer and retailer. Dae-Jun Kwon is the company's manager, and an extremely commanding presence, who prides himself on his teaching role in numerous eyewear seminars.

The company has its Victoria Bling eyewear collection produced in China, and began selling it a year ago in its own outlets and in an additional 300 stores in Korea. By the end of 2011 this business had already generated turnover of 80 million won, equivalent to €53,700.

On the retail side, Dae-Jun has a chain of five stores in two Korean cities, one of which is Incheon, near Seoul on the Yellow Sea, where his father opened his first eyewear store in 1982, in premises of just 13 square meters. The young Dae-Jun decided to study management and follow his father into the optical sector. He worked for Hoya in Japan before going to Europe, earning himself a reputation as the only Korean with in-depth knowledge of the Japanese and European eyewear markets. He subsequently founded, in Korea, the first Optical Franchising Company. By 2010 there were five outlets in the group – a total of 1,300 square meters – forming what he calls a “chain under Korean law,” a form of cooperative. Dae-Jun owns one of the five stores, putting ownership of the others into the hands of relatives on the understanding that he is the boss.

Meanwhile he had created another franchise network of 40 outlets that gives the individual optician limited autonomy to use other suppliers in addition to those selected by Dae-Jun, and the operation has proved a financial success. Open Optical earned 1 million won in royalties in 1999, and 5 million in 2011. In the next two years that figure is expected to rise to 10 million won, equivalent to €6,700 or $8,600. Like Look Optical, Dae-Jun has plans to extend his franchise chain outside Korea.

Bando Optical Corporation, a large group run by a man named Sang Tak Lee, which had revenues of more than $20 million in 2011, a 10 percent increase over 2010, has made its profits on exports, while domestic sales have remained stable. Last year was not a good year for the Korean economy, with other companies seeing sales fall.

Bando focuses on brands with a European style, mainly French and Italian. Its house brands are called Paul Heuman, Paris and Autre Paris. The other three brands – André Kim, Renoma Paris and Kenzia by Ku Italy – are licenses. André Kim – the name of a famous Korean designer – is the star brand, licensed for metallic eyewear made in Korea and acetate eyewear made in China. They retail at $18 on the domestic market, but the export price is significantly higher. In the U.S., the optician purchases them at $50, and the consumer at $200.

The U.S. takes 17 percent of the company's exports. Bando's sales are 80 percent domestic and 20 percent export. Apart from the U.S., the country's exports go to Taiwan, China, Hong Kong, Brazil, Canada and Russia.

The majority of Bando's production is done in the company's own facilities, with the remainder in China. Out of the roughly 1 million pairs a year, 30 percent are sunglasses and 70 percent frames. Sang Tak Lee is also chairman of the Korea Optical Industry Cooperative, an organization totaling 152 companies that produce eyewear and components.

Lee Beun Chun, CEO of Highnoon, has a plant that produces acetate eyewear, with three prescription glass lines called Abba and one line of sunglasses. Seventy percent is sold in Korea and the rest in Singapore, China, Japan and Australia.

Racing Is Life is the brand of a Korean businessman who has a firm specializing in sports apparel and footwear. Five years ago, he gave a company called EXR the license to produce his brand, which is roughly half sunglasses and half prescription frames. Around a third of the total is exported to Japan, Brazil, China and the U.S. The frames are made of acetate, aluminum, titanium and other materials.

Thecompany suffered badly from the global crisis in 2011, with sales down by 30 percent on the domestic market, down to $5 million. But 2012 is going better, with particularly good results at Diops. Turnover is expected to reach $8 million this year, with growth of 10-20 percent on the domestic market, and exports double last year's.

Worldtrend, which has production facilities in Daegu, generated $8.1 million last year, with three house brands all with very western names: Frank Custom, Crispin and Epilogue. Eighty percent is frames and the rest sunglasses. The target is the top end of the market, retailing in Korea at $200. Materials range from acetate to titanium and other flexible materials. According to company officials, the Made in Asia label is seen as a sign of quality.

Worldtrend produces for itself and for other brands. Half its production is for European, American and Japanese companies. Exports currently follow the general rule and account for a third of its business, but the company is looking to expand that figure, and has established four subsidiaries in the most promising markets: Taiwan, Japan, Hong Kong and Russia. It has distributors in China and many other countries, and sees Europe as offering good potential.

The company's drive to increase exports seems to have given good results already. The CEO, Bae You Hwan, claims the company closed 2011 with exports up by 300 percent. He explains such an incredible figure by the fact that the company only started exporting three years ago: starting from zero, such high growth rates are quite feasible. Bae also points out that the countries on the receiving end, such as China and Taiwan, were not particularly hard hit by the global economic crisis.

Hug Ozawa of Japan is an example of cooperation between Japan and Korea. The company's manager, Takahiro Yoshida, explains that it signed a practically exclusive contract with a Korean company that has become a kind of manufacturing subsidiary. The “subsidiary” is called Hug Ozawa Korea LDT and the Korean manager is Young Tae Sohn. It is not a subsidiary in the true sense of the word, as they are two separate companies. Initially targeting the Japanese market with new, highly flexible plastic materials, the products are starting to penetrate the Korean market, and to a lesser extent, China and Taiwan. The company sees the European market as having good potential, though.

TH Optical Institute also proposes its Hiari collections – acetate prescription glasses in beautifully bright colors – for children. The owner, Justin Park, has a plant in Daegu. The company has intensified its export drive since 2006, attending the major shows, and opening a subsidiary in Japan. It currently exports to 29 countries and has 830 clients in Korea.