KITA News
  • Expansion to ASEAN, Need to Begin with 5 Major Countries
    2019-09-19 hit 424

    Expansion to ASEAN, Need to Begin with 5 Major Countries

     

    - KITA suggests entry strategies for trade and service expansion to New Southern region It is important to connect with the government’s New Southern Policy -


     

    It appears that in order to effectively make inroads into the ASEAN market, Korean companies are required to take a phased approach. They need to accumulate success cases first by investing in the promising fields in five major countries and expand to other regions.

     

    The Korea International Trade Association (Chairman, Kim Young-ju) selected Indonesia (City Logistics), Vietnam (City Infrastructure), Myanmar (Agriculture), Malaysia (Consumer Goods) and Thailand (Mobile Content) as the promising countries and areas for Korean companies to  expand into first in the ASEAN market in the report titled the ‘Trade and Service Entry Strategies to New Southern Region’ issued on September 19th.

     

    The report said, As ASEAN has grown into a huge market accounting for 3.4 percent of global GDP and 7.3 percent of world trade, Korea and other major countries are strengthening cooperation. It also stressed, While Korea, Japan and China are competing in the ASEAN market, it is important for Korea to first select base countries and landmark businesses in consideration of the different economic conditions and cooperation needs of each member country.

     

    In the case of Indonesia, since the Joko Widodo government has succeeded in re-election, it is forecast that the government’s logistics infrastructure improvement policy will continue to be strengthened. Korean companies with excellent competitiveness in the logistics field need to take full advantage of local policies and actively advance into the areas of resource logistics, project (construction) logistics, and refrigerated transportation. 

     

    Vietnam has been accelerating the development of urban infrastructure at the national level with the recent significant increase in population inflows to the cities and the growth of new hub cities such as Can Tho, Hai Phong and Da Nang. Therefore, Korean companies must localize the production of infrastructure materials and hire local factory managers and workers to secure price competitiveness.

     

    In Myanmar, agriculture is an important industry that accounts for 18 percent of its GDP and 21 percent of the country’s exports. Thus, it is necessary to work with the farmers in Myanmar to develop customized agricultural inputs that reflect local soil, crop characteristics, and rural demand.


    In order to target the Malaysian consumer goods market ASEAN's flagship premium market and halal market, it is necessary to upgrade the image of Korean products by enhancing the national brand and build tailored strategies for each consumption group.

     

    Thailand is one of the most accessible 4G mobile networks in Southeast Asia, and the mobile content market is dramatically growing. Accordingly, the localization of language and payment system and real-time market research to catch up the rapidly changing trends are required.

     

    Shim Hye-jung, a senior researcher at the Institute for International Trade of the Korea International Trade Association, said, After successfully entering into the base countries, the Korean companies need to expand their businesses across ASEAN through localization strategies tailored to individual countries. The researcher also mentioned, However, in consideration of the poor infrastructure environment, complex laws and administrative system, it is necessary to appropriately utilize the government's ODA projects, cultural diplomacy, human exchanges, etc. 


    * e-book version of the report (http://online.fliphtml5.com/xmxdm/sxyv/) is available.

     

     


    List
    Prev
    Use of Mobile Payment in China is 2.7 Times More than in Korea
    Next
    KITA Begins ‘My Trade’ Service
KITA
Family Site