Korea

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6 Country starter pack Introduction to Korea Food and agriculture: Australian businesses are in a strong position to supply various food and beverage products to the Korean market. Korea is highly dependent on food imports, with agricultural imports totalling $29.1 billion in 2013. Australian businesses are well regarded in Korea as suppliers of high quality and safe food products providing Korea with $1.9 billion worth of agricultural imports in 2013. The Korean food market is also rapidly evolving, driven by changing consumer tastes and expanding distribution channels, including new retail outlets and online platforms. Opportunities exist for Australian businesses in a range of food and agricultural items such as wine, nuts, dairy, meat and fresh fruits. Financial services: Korea’s rapidly ageing population needs increased financial security from personal investments. Consumer expectations are challenging the traditional investment mindset and are putting pressure on Korean banks and funds to deliver higher returns. This is driving greater interest by institutions in higher yield “alternative” products, such as offshore investment services, and partnerships with foreign firms. Infrastructure and real estate are now two areas of particular interest for many Korean firms. Education: Korea is a stable and well-established market for Australian education providers. It is the fourth-largest source country for foreign students in Australia after China, India, and Vietnam. Australia is an attractive destination for Korean university students trying to improve their English language skills and to build work experience to be more competitive in Korea’s tough job market. Opportunities for Australian institutions exist in higher education, vocational education and training (VET), schooling, and intensive English courses. In particular, the recently introduced post study work arrangements (allowing international students studying in Australia to work here once graduated) in Australia will be a significant incentive for students’ interest in higher education. Australia is the number three destination for Korean students studying abroad (behind the USA and Japan). A total of 28,016 Korean students were enrolled in Australia across all sectors (schools, higher education, TAFE/VET) in 2014, a positive increase of 2.1 per cent from the previous year indicating the ongoing potential for growth. Professional services: The free trade agreement will deliver new market opportunities for Australian service suppliers, particularly in accounting, legal and audio visual services. For example, within two years of KAFTA coming into force, Australian law firms will be permitted to enter into cooperative agreements with Korean law firms, and within five years, establish joint ventures and hire local lawyers. ICT digital contents and services: Koreans are among the world’s biggest users of fast broadband and mobile phones. Korea was the first country to build a national, high-speed fibre broadband network (more than ten years ago), and has a mobile penetration rate of 1.1 mobile phones per person - which means there are more mobile phone accounts than people. It comes as no surprise, then, that Korea has strong ICT hardware manufacturing capabilities that complement Australia’s software capabilities. Considering doing business in Korea? 1. Do your research • Speak to industry experts • Connect with Australian businesses operating in Korea • Go to industry events and information seminars • Seek professional advice. 2. Become aware of cultural differences and ways of doing business in Korea • Gain an understanding of your customer and local business partners • Be flexible and open to difference • Understand the local culture and prepare before meeting with local business partners • Practise Korean business etiquette. 3. Building relationships is crucial in Korean culture, but it can take time • Be patient with developing relationships • Follow up and maintain contact with your networks.
Country starter pack Introduction to Korea 7 KAFTA – benefits for Australian services firms: Health, aged care and biotech: Korea’s population is ageing rapidly – faster than most other OECD countries. This is the result of increased life expectancy and one of the lowest fertility rates in the OECD. As a result, there is an increased demand for aged care, the bio-tech industry, medical services and devices, over-the-counter medications and rehabilitation services. Coupled with a domestic trend of increased health consciousness, opportunities for Australia exist in areas including health and aged care services, pharmaceuticals, and advanced medical equipment. Innovative with a strong commitment to R&D: Korean investment in research and development was US$63 billion ($70 billion), or 3.6 per cent of GDP in 2014 – one of the highest levels in the world. Koreans love new technology, and are often among the first in the world to embrace cutting edge products and services. This, along with Korea’s superb infrastructure, makes it an ideal test bed for innovative foreign manufacturers and service providers. Safe, stable and developed: Korea is one of 34 OECD member states. Sovereign risk is low, with a high investment grade rating on its government debt (Ranking - S&P: A, Fitch: A+ and Moody’s: A1). Korea is Australia’s third largest overall export market and ninth largest services export market. With tourism and education dominating Australia’s services exports, there are plenty of opportunities with KAFTA for professional services firms. These include: • Legal firms for the first time will have access to Korea’s legal consulting market • Financial services providers will be able to supply on a “cross-border” basis • Accountants can now open offices in Korea to provide accounting consultancy services • Telecommunications providers can be licensed to provide public telecommunications services • Education services: Guaranteed market access for Australian education providers in Korea’s growing adult education sector • Film and television services: KAFTA contains an Audio-visual Coproduction Annex, opening new commercial opportunities for the Australian film and television industry • Engineering services: Australian engineers will benefit from a mutual recognition arrangement • Other professional services: On-going work towards mutual recognition of qualifications and liberalised visa access arrangements.
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Page 3 and 4: SURFACE AREA 99,400 square kmS GDP
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Country starter pack Engage with us
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© August 2015, Asialink Business.
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Korea

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