Selling to Korea

8/2/2019 Selling to Korea

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Selling to

South Korea

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Stephen Kim, Associate,

Asia-Pacific PracticeUniversal Consensus

www.UniversalConsensus.com

[email protected]

+1 (760) 696-0151


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Opportunities in South Korea

7th

largest U.S. trading partner, and FTA pending 15th largest economy in the world, one of the

fastest growing in OECD

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Opportunities


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Economy increasingly becoming more market-oriented, with increasing demand for FDI andtechnology

Koreans are proven to be very loyal and hard-

working business partners

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Opportunities


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Automotive Parts and Accessories

Broadcasting Programming andEquipment

Computer Software

Construction Equipment

Cosmetics

Defense Industry Equipment

Drugs and Pharmaceuticals

Education and Training Services

Healthcare Technology and MedicalDevices

Pollution Control Equipment

Renewable Energy

Specialty Chemicals

Travel and Tourism

Wireless Broadband Equipment andServices

Smart Grid Technology and Services

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Opportunities

Sectors with the best potential for U.S. companies:


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CulturalBackground of

South Korea

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Business Model of Intercultural Analysis (BMIA)

1. Cultural Themes

2. Glocalization

3. ProcessEngineering

4. Communication5. Time Orientation

6. Group Dynamics

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Cultural Background of South Korea


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Cultural Themes Include:

1. History and Social roots2. Belief systems

3. Traditions

4. Current state of South Korea

5. Values

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History of South Korea

Progress through history has a major influenceon culture

Experienced many foreign invasions throughouthistory anti-foreigner, strongly nationalistic

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History of South Korea

1392-1910: under Chinese political umbrella

adoption of Confucianism

1910-1945: Japanese Colonialism anti-Japanese sentiments

Since liberation: American modelAmericana

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Traditions of South Korea

Nationalistic and anti-foreignism, but foreignersrespect/interest towards Korean culture greatlyappreciated

Linguistically and ethnically homogeneous

High population density highinterconnectedness and trendsspread quickly

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While domestic products are generally preferred,foreign luxury products with brand-recognition arevery popular

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Local presence is essential for the success offoreign firms

Large conglomerates known as chaebolsdominate Korean economy

Traditionally, the economy was highlycoordinated by government but is becoming moreliberal

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Current Dynamics of South Korea

South Koreas economy grew 6.2% in 2010, andcontinues to grow

Increased affluence increase demand for qualitywhich increase demand for technology and

services FTA with America and EU

Stable democracy but highly politically andregionally fragmented demographics

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Values

Kibun state of mind one must show theproper respect and avoid causing loss of face infront of a group of people

Nunchi ability to identify anothers kibun

Inhwa harmony collectivism and verycordial formal behavior

Confucianism

Relationships

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Key Business Values

Importance of:

Price

Relationship

Negotiations

Value Brand Image

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Key Business Values

For Price

Guidelines:

Manufacturers prefer to buy lowest priced rawmaterials

Koreans seek bundles and undervalue software Mark-up from manufacturer price to consumer price

is generally 50%-150%

Increasingly quality-conscious as products becoming

more branded and sophisticated

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Key Business Values

For Relationship

Guidelines: Trust is a major factor in doing business

Relationship guarantees long term business and moreconnections prefer in-person meetings

Common to go out to drink or a karaoke bar to buildrelationships

Cold calls do not work; 3rd party introductions formutual trust

Alumni contacts and networking strong in Korea

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Key Business Values

For Negotiations

Guidelines:

Contracts seen as gentlemens agreement

Subject to many changes

Saying No is viewed as impolite

Build personal relations before negotiating

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Key Business Values

For Brand Image

Guidelines:

Highly susceptible to outside influences but alsohighly Americanized (style, trends, technology etc.)

Word of mouth very effective Established names garner more attention

Tourists seek the genuine American experience think the Statue of Liberty and Hollywood

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Selling to Korea

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