For any business looking to enter a new market the new external factors should always be considered and for selling in South Korea this is no different. Their political system came under a lot of scrutiny recently when President Park Geun-hye was held for high level corruption charges, including favouring the “Chaebols” when making key economic decisions (Barclays, 2017). New President Moon Jae-in elected in May this year came as a political glimmer of hope for the country, who better than to lead them to a prosperous future of fighting corruption and strengthening global relationships than a human rights lawyer, political activist and former member of South Korea’s special forces (McCurry, 2017).
Moon has already agreed to review their FTA (Free Trade Agreement) with the US and promises to improve political ties with North Korea including aiming to reopen joint industrial projects. For UK businesses, a lot of uncertainty surrounds Brexit negotiations and whether current European FTAs will be upheld, large companies such as Samsung and Hyundai have monopolised many markets in South Korea, which has also lead to exports accounting for approximately 50% of all GDP (Song Jung-a; Brian Harris, 2017), meaning that South Korea is more receptive to free trade deals globally.
When beginning to sell in a new country language and cultural differences can cause issues not only in customer services but also business relationships, for example in South Korea it is common to greet business relations with a slight bow followed by a handshake and whilst learning the English language is an important factor of South Korean life, people always want to shop in their home language (Gov., 2015). KnowGlobal’s expert team and strong global relationships can offer your business advice on the best practices for overcoming these barriers globally, if you would like to know more you can contact our team via our contact form.
The South Korean e-commerce market appears to have a bright future ahead with internet penetration reaching 89.9% during 2015 (Statista, 2015) and predictions that their e-commerce market will grow to reach US$ 32.56 billion in 2021 (Statista, 2017). Alongside this the country’s unemployment figure looks set to reduce further from its current 3.8% level, increasing the likelihood for increase retail spend, this means that for a global retail business or brand, now is the perfect chance to introduce your products to this market and take full advantage of forthcoming growth. In particular, market insiders have flagged luxury retail to be one to watch, with brands such as Burberry showing strong growth (Borgonovo, 2016).
Overall South Korea’s future looks to be one of growth and potential within the retail e-commerce space, although there are political issues which will not disappear overnight President Moon’s reign look set to bring encouragement to the country, in particular to spark honesty and international trading further. If you would like to know more about setting up in South Korea or another global market, KnowGlobal’s team of experts are happy to discuss your opportunities with you, you can get in touch via email or our contact form.