BOOMING KOREAN OPPORTUNITIES EXIST
19 November 2012,
WHEN thinking of doing business in Asia, entrepreneurs should take a broad view and examine other markets like South Korea, says the Australian Trade Commission’s Brett Cooper (pictured).
While the huge markets of China and Japan are an obvious lure when doing business in Asia, it is wrong to underestimate other countries that offer enticing trading prospects.
A country like the Republic of Korea (South Korea) offers rich opportunities for those Australian companies that are prepared to commit and have a solid business proposition to offer.
South Korea is Australia’s third largest export market, ahead of India and the United States, and fourth-largest overall trading partner with over $30 billion in two-way trade in 2011.
It also presents an increasingly interesting alternative home-base with excellent daily connections from Inchon to major cities in Japan, China and beyond.
However South Korea, like many markets in Asia, also presents its own set of challenges. Australian companies doing business anywhere in Asia need to engage thoughtfully after having fully considered their objectives and options.
There are no hard and fast rules as each business is different, but there are some common overall drivers of long-term success for Australian firms in the Korean market, some of which are also shared with Japan and China.
Take nothing for granted. Australia is liked and well regarded in South Korea and many other Asian nations, but do not assume that you will be an automatic choice for setting up a business partnership.
Choose the right local business partner. It will help make the difference between success and failure.
Competition is fierce and there are many competitors from Europe, United States and elsewhere in Asia also knocking on the doors of prospective customers.
Plan and execute a long-term corporate strategy. Be prepared for short-term volatility and setbacks while focusing on your overall business objectives.
Show strong commitment and be prepared to invest serious time and many visits in order to establish and nurture key business relationships.
If you are doing business in South Korea, show understanding to your partners of their unique culture and market difference to China or Japan.
Invest in Korean-language business cards and have access to a good interpreter as English alone will only take your business so far.
Understand the local regulatory framework and use a good local lawyer where necessary. South Korean law differs significantly from other regional markets, and Australian legal practices and common law concepts are relatively unknown here.
Certain legal obligations under Australian law still apply to Australian firms offshore, including anti-bribery legislation. The right pricing and quoting for products is essential. Some Australian products in South Korea appear relatively expensive compared with competitors from the US, China or Europe.
Although some products are sold purely on the basis of price, it is also important to ensure quality, fast delivery, customer service and aftersales care in order to attract and retain new business.
The Australian Trade Commission can support Australian companies looking to establish, or expand their presence in Asia. It looks forward to working with an increasing number of companies wanting to make a difference in the booming Asian market.
When operating in an overseas market, it is important to obtain legal and accounting advice to address specific corporate requirements.