With a domestic population of over 50 million, the fourth largest economy in Asia and the 11th in the world, South Korea presents a growing opportunity for Australian exporters. World First Currency Specialist Ellis Taylor outlines what it takes to meet the challenge of exporting to the region.

If you thought South Korea was one of Asia’s best kept secrets, you’ll be disappointed to learn that the secret is out; South Korea is Australia’s fourth largest export market[1]. A big driver of demand is the Korea-Australia Free Trade Agreement (KAFTA) which was signed in 2014 and eliminated most tariffs on exports to the Republic of Korea.

Here, we offer 5 tips on beginning your export journey to South Korea.

Do your research
It goes without saying that SMEs should do their homework before entering any new market. For South Korea, it is particularly important to understand the entry barriers and requirements as well as doing background checks on any local partners or customers.

The search engine Naver is South Korea’s equivalent of Google and a useful starting point for finding out local information including business records, history and current operations of any potential business partners. It’s also a good place to start investigating your competition.

Find an agent
Once you’ve done your research and decided there is an opportunity for your product or service, it is best to find a local agent to handle distribution.

Whilst it is possible to set up your own business or representative office in the country, the costs and resource needed for this are high and can be prohibitive. With an effective agent, you are likely to get access to readymade networks as well as benefitting from the local knowledge and experience.

Great sources of information include the Export Council of AustraliaAustrade, Australia Korea Business Council, Australia-Korea Foundation, and the Australian Chamber of Commerce in Korea.

korea tips blog

Respect the culture
Basic appreciation of Korean history, heritage and culture will get you a long way when doing business in the region. Etiquette and respect are particularly important when building business relationships and understanding local taboos will avoid any awkward situations.

For example, the number 4 is believed to bring bad luck and you would do well to avoid holding meetings on the 4th of any month or selling goods in groups of fours or renting an office on the 4th floor. On the other hand, 7 is believed to bring good luck and fortune so it may be a good idea to brand your product accordingly.

Be prepared for hierarchy
As a culture that places emphasis on respect, be prepared to follow certain hierarchical guidelines and procedures when working with Korean partners or selling to Korean customers. Internal operations within any companies you work with need to be respected and processes are held in high regard.

Many of the larger Korean founded businesses still operate as family businesses with founder’s family continuing to exert a great deal of direct executive authority over business operations. If you’re dealing with a chaebol (a large family-owned business conglomerate in Korea) then patience will be necessary to achieve your end goals.

Find your niche
South Korea’s phenomenal growth has led to a number of international companies exporting to the region including well-known brands like Burberry, Standard Chartered, Jaguar Land Rover, and BA all have a significant presence in the region. This proves South Korea is importing more than just commodities from Australia which should provide some inspiration for Aussie SMEs.

Data shows that there are bountiful opportunities for Australian SMEs in the aged care, biotechnology, food and beverage, wine and financial services categories to trade with South Korea.

Finding where your product fits in the market and assessing demand will be key in making your business a success in South Korea.

If you’re a small or medium business owner sending money overseas, World First can help you achieve better exchange rates to save you money and protect your bottom line. Speaking to a Currency Specialist for more information on  1800 701 540 or visit us online.

For more information about doing business in Asia or updates about currency, follow World First on LinkedIn.





[1] http://www.businessinsider.com.au/



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