expand your sales to south korea & japan webinar€¦ · 05/02/2020 · market size: $ 5 billion...

Expand your sales to South Korea & Japan Webinar

F e b r u a r y 5 , 2 0 2 0

Zoë Munro, Program Director

Great Lakes St. Lawrence Governors & Premiers

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Award-Winning Project Portfolio

Economy• Promoting SME Exports• Growing Strong Clusters

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GSGP Trade Missions

Doing Business in Japan

Key sectors, market opportunities and challenges

Fenetre Partners - Company Overview

• Leading consulting firm of trade, investment and international marketing, based in Tokyo, Japan

• Our clients are mainly from the US, Germany, the UK, Hong Kong, Korea, Singapore and Japan

• The main scope of our service is market entry support into Japan by providing market research, entry strategy consulting and its implementation

• Employs 28 staff and worked on over 250 international projects in the past 11 years

Key Figures about Japan

• Prefectures: 47

• Land Area: 377,970 km²

• Population: 126 million (2019)

• GDP: $4.97 trillion (2018)

• GDP Growth: + 0.79% (2018)

• GDP per Capita: $39,290 (2018)

• Unemployment Rate: 2.4% (2018)

Source: Statistics Bureau Japan, Geospatial Information Authority of Japan, World Development Indicators database, World Bank

Nominal GDP of Japan

Reference: Cabinet Office

Unit: Billion JPY

Burst of Bubble

Demographics of Japan

Reference: Statistics Bureau, Ministry of Internal Affairs and Communications

1990 2005 2008 2009 2018

Industry Life Cycle – How Matured?

Time

Mar

ket S

ize

PotentialDemand Strong Sophisticated and Segmentalized Declining

Competitors

Profit

Few Increasing Stable Declining

Negative Low but Rising Stable and High Declining

Oligopoly

Market Opportunities in Japan• Japan is not an ideal destination in general

• You should not choose Japan as your target market if you sell to average consumers

• However, some sectors are very attractive for leading American companies

• Key question is “Who is your potential customer in Japan?”

• Question 1: Are your Japanese customers growing by global expansion?

• Question 2: Can your products solve problems related with aging of society?

Target Sector 1: Big Global Manufactures

They are growing globally while the domestic market is not growing

Example: The domestic Japanese Automotive Market

• Do you think the Japanese automotive companies are good potential customers?

Reference: Calculated by SPEEDA on the data from JAMA

Declined byapprox. 3 million

Thriving Japanese Manufactures in the Stagnant (Top 20)

Source: Toyo Keizai Online (September 9, 2015)

• Top Manufacturers in Growth from 2005 to 2014 on Tokyo Stock ExchangeRanking Company Name IndustryIncrease in net sales

from 2005 to 2014(Billion JPY)

Net sales in 2014(Billion JPY)

Rate of increase innet sales

from 2005 to 2014

Overseas sales ratioin 2016

1 TOYOTA Transportation Equipment 8,683 27,235 47% 78%5 Honda Transportation Equipment 3,997 12,647 46% 86%9 Nissan Motor Transportation Equipment 2,799 11,375 33% 85%

10 NIPPON STEEL & SUMITOMO METAL Iron and Steel 2,221 5,610 66% 39%15 DENSO Transportation Equipment 1,509 4,309 54% 61%17 Fuji Heavy Industries Transportation Equipment 1,431 2,878 99% 81%19 Mitsubishi Heavy Industries Machinery 1,401 3,992 54% 55%21 BRIDGESTONE Rubber Products 1,257 3,674 52% 83%24 DAIKIN INDUSTRIES Machinery 1,186 1,915 163% 75%26 Aisin Transportation Equipment 1,135 2,964 62%30 Sumitomo Electric Industries Nonferrous Metals 1,083 2,823 62% 60%31 Sumitomo Chemical Chemicals 1,080 2,377 83% 61%33 SONY Electric Appliances 1,056 8,216 15% 71%34 JFE Holdings Iron and Steel 1,047 3,850 37%37 Toyota Industries Corporation Transportation Equipment 925 2,167 75% 52%38 TOSHIBA Electric Appliances 923 6,503 17% 59%39 Mitsubishi Electric Electric Appliances 912 4,323 27% 43%42 Toyota Boshoku Transportation Equipment 849 1,306 186% 55%44 Astellas Pharmaceutical 800 1,247 179% 64%47 JTEKT Machinery 786 1,356 138% 60%

原本

Extended sales company in 10 years

Rankinga firm nameThe industryIncrease in net sales from 2005 to 2014(Billion JPY)Net sales in 2014(Billion JPY)Rate of increase in net sales from 2005 to 2014 Overseas sales ratio in 2016

1TOYOTATransportation Equipment8,68327,23547%78%

2Softbank GroupInformation and Communication 7,8338,670936%

3Toyota TsushoWholesale Trade5,3278,663160%69%

4MarubeniWholesale Trade4,7967,834158%

5HondaTransportation Equipment3,99712,64746%86%

6ITOCHUWholesale Trade3,6015,591181%

7Mitsubishi Wholesale Trade3,5247,66985%

8AEONRetail Trade2,8837,07969%9%

9Nissan Motor Transportation Equipment2,79911,37533%85%

10NIPPON STEEL & SUMITOMO METALIron and Steel2,2215,61066%39%

11MITSUIWholesale Trade1,8805,40553%

12Tokyo Electric PowerElectric Power and Gas1,7556,80235%

13SumitomoWholesale Trade1,7133,76284%

14KDDIIT and Communication1,6534,57357%

15DENSOTransportation Equipment1,5094,30954%61%

16Daiwa HouseConstruction1,4452,811106%

17Fuji Heavy IndustriesTransportation Equipment1,4312,87899%81%

18Tokio Marine HoldingsInsurance1,4294,32849%30%

19Mitsubishi Heavy IndustriesMachinery1,4013,99254%55%

20ORIXOther Financing Business1,2572,174137%23%

21BRIDGESTONERubber Products1,2573,67452%83%

22alfrsa HoldingsWholesale Trade1,2262,421103%

23MEDIPAL HOLDINGSWholesale Trade1,2072,87373%

24DAIKIN INDUSTRIESMachinery1,1861,915163%75%

25Shouwa Shell SekiyuOil and Coal Products1,1592,99863%

26AisinTransportation Equipment1,1352,96462%

27Tonen General SekiyuOil and Coal Products1,1093,45147% 20%(2015)

28Tokyo GasElectric Power and Gas1,1022,29393%

29NIPPON STEEL & SUMITOMO BUSSANWholesale Trade1,0962,105109%26%

30Sumitomo Electric IndustriesNonferrous Metals1,0832,82362%60%

31Sumitomo ChemicalChemicals1,0802,37783%61%

32Mitsubishi ShokuhinWholesale Trade1,0702,32784%

33SONYElectric Appliances1,0568,21615%71%

34JFE HoldingsIron and Steel1,0473,85037%

35Fast RetailingRetail Trade1,0431,383307% 42%(2015)

36Chubu Electric PowerElectric Power and Gas9703,10346%

37Toyota BoshokuTransportation Equipment9252,16775%52%

38TOSHIBAElectric Appliances9236,50317%59%

39Mitsubishi ElectricElectric Appliances9124,32327%43%

40COSUMO OILGas and Oil8813,03641%

41Daito Trust ConstructionConstruction8611,353175%


43HANWAWholesale Trade8031,73786%25%

44AstellasPharmaceutical8001,247179%64%

45Nippon YusenMarine Transportation7962,40250%26%

46Kansai Electric PowerElectric Power and Gas7933,40630%

47JTEKTMachinery7861,356138%60%

48Itochu EnexWholesale Trade7381,373116%

49TorayTextiles and Apparels7122,01155%53%

50LIXILMetal Products6871,67370%30%

51NTT DATAInformation & Communication6581,51277%31%

52Takeda Pharmaceutical LimitedPharmaceutical6551,77858%61%

53SuzukiTransportation Equipment6503,01528%67%

54Mitsui O.S.K.L.LinesMarine Transportation6441,81755%16%

55Daihatsu MotorTransportation Equipment6411,81755%35%

56SUZUKENWholesale Trade6391,97048%

57Murata ManufacturingElectric Appliances6191,044146%93%

58Asahi KASEIChemicals6091,98644%35%

59KubotaMachinery6041,58761% 68%(2015)

60Tohoku Electric PowerElectric Power and Gas5712,18235%

61Yamada DenkiRetail Trade5621,66451%

62TOHO HOLDINGSWholesale Trade5591,16293%

63HINOTransportation Equipment5551,68549%32%

64RakutenServices5535991214% 20%(2015)

65Osaka GasElectric Power and Gas5531,52857%

66Century Tokyo Leasing Other Financing Business549883165%

67KOMATSUMachinery5441,97938%79%

68Nidec Electric Appliances5431,028112%85%

69Kirin HoldingsFoods5412,19633% 35%(2015)

70Sekisui HouseConstruction5401,91339%36%

71Mitsubishi MaterialsNonferrous Metals5321,51754%60%

72Kawasaki KisenMarine Transportation5241,35263%

73SAN-AI OILWholesale Trade524884146%

74daiwabo holdingsWholesale Trade499566748%

75KaoChemicals4651,40250% 35%(2015)

76Kyushu Electric PowerElectric Power and Gas4651,87333%

77H2O RetailingRetail Trade459845119%

78Don Quijote HoldingsRetail Trade451684194%

79Hitachi MetalsElectric Appliances4471,00680%56%

80Kobe SteelIron and Steel4431,88731%36%

81Sumitomo Metal MiningNonferrous Metals43792190%40%

82TDKElectric Appliances4251,08365%92%

83ANA HoldingsAir Transportation4211,71333%

84RicohElectric Appliances4182,23223%66%

85Mitsui FudosanReal Estate4181,52938%

86Hitachi Ttransport SystemLand Transportation406677150%

87FANUCElectric Appliances399730121%80%

88NSKMachinery39497568%67%

89Hikari TsushinInformation & Communication392563229%

90Zensho HoldingsRetail Trade386512308%

91Isuzu MotorsTransportation Equipment3861,87926%64%

92ObayashiConstruction3691,77426%23%

93Hitachi Construction MachineryMachinery36881682%69%

94Sumitomo Rubber IndustriesRubber Products36783878% 56%(2015)

95IHIMachinery3671,45634%52%

96JGCConstruction36479984%85%

97T-GAIAInformation and Communication 362642129%

98Nippon Sheet GlassGlass and Ceramics Products362627137%76%

99ShinshoWholesale Trade34887067%24%

100KYOCERAElectric Appliances3461,52729%59%

全体


RankingCompany NameIndustryIncrease in net sales from 2005 to 2014(Billion JPY)Net sales in 2014(Billion JPY)Rate of increase in net sales from 2005 to 2014 Overseas sales ratio in 2016


2Softbank GroupInformation and Communication 7,8338,670936%

3Toyota TsushoWholesale Trade5,3278,663160%69%

4MarubeniWholesale Trade4,7967,834158%


6ITOCHUWholesale Trade3,6015,591181%

7Mitsubishi Wholesale Trade3,5247,66985%

8AEONRetail Trade2,8837,07969%9%



11MITSUIWholesale Trade1,8805,40553%

12Tokyo Electric PowerElectric Power and Gas1,7556,80235%

13SumitomoWholesale Trade1,7133,76284%

14KDDIIT and Communication1,6534,57357%


16Daiwa HouseConstruction1,4452,811106%


18Tokio Marine HoldingsInsurance1,4294,32849%30%


20ORIXOther Financing Business1,2572,174137%23%


22alfrsa HoldingsWholesale Trade1,2262,421103%

23MEDIPAL HOLDINGSWholesale Trade1,2072,87373%


25Shouwa Shell SekiyuOil and Coal Products1,1592,99863%


27Tonen General SekiyuOil and Coal Products1,1093,45147% 20%(2015)

28Tokyo GasElectric Power and Gas1,1022,29393%

29NIPPON STEEL & SUMITOMO BUSSANWholesale Trade1,0962,105109%26%



32Mitsubishi ShokuhinWholesale Trade1,0702,32784%



35Fast RetailingRetail Trade1,0431,383307% 42%(2015)

36Chubu Electric PowerElectric Power and Gas9703,10346%




40COSUMO OILGas and Oil8813,03641%

41Daito Trust ConstructionConstruction8611,353175%


43HANWAWholesale Trade8031,73786%25%


45Nippon YusenMarine Transportation7962,40250%26%

46Kansai Electric PowerElectric Power and Gas7933,40630%





























75KaoChemicals4651,40250% 35%(2015)


























製造業


RankingCompany NameIndustryIncrease in net sales from 2005 to 2014(Billion JPY)Net sales in 2014(Billion JPY)Rate of increase in net sales from 2005 to 2014 Overseas sales ratio in 2016















37Toyota Industries CorporationTransportation Equipment9252,16775%52%

































75KaoChemicals4651,40250% 35%(2015)


























Japanese Companies as Your Target Customers

Reference: German Business in Japan 2018 by AHK Japan

Purchasing Decisions are Made in Japan• You might think you can sell to their US subsidiary directly but it’s wrong

• Purchasing people in US subsidiaries of big Japanese companies say “You should go to Japan” if you contact them directly

• Only simple products such as screw, spring, nut, etc. can be purchased locally in a big Japanese firm

• Important material, parts, components, software, equipment, etc. are chosen by engineers at R&D headquarters in Japan

• For example, the products in the automotive sector would be engine filter for ecofriendly & energy efficiency, sensor for safety, AI for autonomous driving, etc.

• You should do sales activities in Japan for having a business with their US subsidiaries

FDI Stock in Asian Countries (2012)

• Japan is the largest investor among the 4 countries in East and South East Asia• USA is the largest in India (Japan has overtaken USA in FDI inflows, 2014-2016)• South Korea is the largest in Vietnam (28.8% in 2016)

China India Indonesia Thailand Philippines Malaysia Vietnam

Japan87,247 15,470 11,574 57,627 6,444 20,232 4,504

USA70,190 32,562 10,160 17,035 7,646 15,486 799

South Korea52,892 3,074 1,234 2,139 364 2,902 5,777

Germany19,762 12,561 2,104 3,744 -147 6,148 374

Source: Bilateral FDI Statistics – UNCTAD, 2014

*The figure of Vietnam is in 2010

Sheet1

ChinaIndiaIndonesiaVietnamMalaysiaPhilippinesThailand

VW✔✔✔

Toyota✔✔✔✔✔✔

Daimler AG✔✔✔✔✔✔

Renault–Nissan ✔✔✔✔✔✔✔

GM✔✔✔

Ford✔✔✔✔

FCA✔✔

Honda✔✔✔✔

SAIC MOTOR✔✔✔✔

BMW✔✔✔✔✔

Suzuki✔✔✔✔✔✔

Daihatsu✔✔

Mazda✔

Subaru✔(✔)

ChinaIndiaIndonesiaVietnamMalaysiaPhilippinesThailand

Apple✔✔✔✔✔✔✔

Samsung✔✔✔✔✔

Bosh✔✔✔✔✔✔

Sony✔✔✔✔

Panasonic✔✔✔✔✔✔✔

LG✔✔✔✔✔✔

Philips✔✔✔✔

Midea✔✔✔✔✔✔

Wirlpool✔✔

Sharp✔✔✔✔✔

Sheet2

ChinaIndiaIndonesiaThailandPhilippinesMalaysiaVietnam

Manufacturing industry33932085391057241353412

Groceries1434224661422

Fiber248334523620

Wood paper57-101721415

Chemical277246198193833

Oil · coal11143-21

Ceramic · stone100491521313

Steel951127435913

Non ferrous metal12051338102412

Metal products19352666161835

Genral purpose machine1341116287108

Production machine277132791141317

Business machine1006920121014

Electric machine273111262151124

ICT machinery34963568488434

Transport machine53688149287493578

Others4801685123335273

Non manufacturing industry2321231310751191284259

Total5,7144398491,808432637671


Japan109402347524661069781399

South Korea3157325723181921321593

USA633326232577196710161719

Germany5121817819712-30

USD


Japan965520714630538986312352050

South Korea3157325723181921321558

USA633326232577196710161719

Germany4399702708310-26

Santandertrade


Japan87,24715,47011,57457,6276,44420,2324,504203,098

USA70,19032,56210,16017,0357,64615,486799153,878

South Korea52,8923,0741,2342,1393642,9025,77768,382

Germany19,76212,5612,1043,744(147)6,14837444,546

2010

Sheet3

Growing Sectors in Japan• Automotive

• 6 Japanese brands such as Toyota, Honda, Nissan, Suzuki, Mazda and Subaru in the top 25 of global car sales in 2017

• The total number of Japanese cars sold in the world is approx. 28 million units, which occupies approx. 30% of the global market

• Construction Machinery• Globally known construction machinery companies such as Komatsu

(World No. 2), Hitachi & KCM (World No. 3), CAT Japan, Kobelco, Kubota, Yanmar, Tadano, etc. are headquartered in Japan and their major R&D centers are located in Japan

• In 2017, Hitachi has the world No. 1 market share for hydraulic excavators, Kubota has world No. 1 market share for mini hydraulic excavators and Tadano has world No. 2 market share for cranes

• Robotics & Automation• Japanese robotics and automation companies such as Mitsubishi Electric,

Fanuc, Omron, Yaskawa, Keyence, Yokogawa, etc. have strong global presence

• Approximately 60% of world industrial robots are manufactured by Japanese robotics companies in 2017

Target Sector 2: Solutions for Aging Population

How to take care elders and solve a problem of decreasing workforce?

Japan's Social Security-Related Expenditure is Increasing

• Demand for healthcare including medical and elderly care is expected to increase significantly

%

Reference: Nikkei Business

Japan's Working Population is Declining

• This problem is supposed to be solved by new technology which raises productivity

Reference: Mizuho Bank

Growing Sectors in Japan• Healthcare and Medical

• Medical device market has grown from approx. 20 billion to 30 billion USD in the last 15 years

• Roughly half of medical devices used in Japan are imported mainly from the US and Europe

• Healthcare market size including IT, services, supplement, food, exercise, prevention goods, etc. is estimated to grow from approx. 240 billion USD in 2016 to 310 billion USD in 2025

• IT & Robotics• Now companies face a serious problem of lack of labor especially in the service

sectors such as logistics, retailing, customer service, etc. • Solutions are needed to raise productivity by new technology for automation such as

IoT, AI, Big Data, RPA, sharing service, drone, self-checkout, autonomous driving, etc.

• IoT market is expected to grow with 13.3% to approx. 110 billion USD in 2023• AI market is estimated to grow with 46.6% to approx. 33 billion USD in 2023• Big Data market is estimated to grow with 8.9% to approx. 80 billion USD in 2022• RPA market is estimated to grow with 400% to approx. 400 million USD in 2022

Challenges for Doing Business in Japan

Language, culture and distribution channel

Entry Barriers of the Japanese Market

• Language• Few people can speak English

• Business Culture• Conservative and non-direct communication• High risk averse and long term orientation• Excessive level of quality requirement

• Distribution Channel• Complex and passive• Vertical or exclusive

History of Japan after 17th Century

2008199719851945 1952

Population decrease

Plaza Accord

Highest GDP

Under GHQ Control

Isolation Policy(Edo Period)

18681603

(until 2017)

Opportunity in the South Korea Market

Geographic Benefit of S. Korean Peninsula

About Korea

- Population with 51.8 million (50% in Seoul)

- 3rd Largest Economy in Asia

- 7th Largest Exporter in the World (as of 2019)

- 7th Largest Export Market for the US

- 52 FTA Partners

- Korea is about the size of the State of

Indiana

Source: Export.gov

About Korea

Source: Wolrd Bank & Export.gov

Economy 2016 2017 2018GDP ($ Billions) 1,415 1,531 1,619

GDP Per Capita (USD) 27,608 29,743 31,363

GDP Growth (% Change) 2.9 3.1 2.7

GDP Growth Rate Per Capita (% change) 2.5 2.6 2.3

Consumer Prices (% change) 1.0 1.9 1.5

Unemployment (% of labor force) 3.7 3.7 3.8

Advancement

South Korea Top 10 Imports from the World

Source: The World Factbook:Country Profiles

Categories 2019

Mineral Fuels including oil $127.3 billion (25.3% of total imports)

Electrical machinery equipment $89.87 billion (17.8%)

Machinery Including computers $51.6 billion (10.3%)

Optical, Technical, medical apparatus $18.5 billion (3.7%)

Vehicles $16.7 billion (3.3%)

Iron, Steel $15.7 billion (3.1%)

Ores, Slag, ash $15.1 billion (3%)

Organic Chemicals $12.7 billion (2.5%)

Plastics, plastic articles $11.5 billion (2.3%)

Other Chemical goods $8.2 billion (1.6%)

South Korea’s TOP 5 Export Partners

1. China (US $136 billion)

2. USA (US $73 billion)

3. Vietnam (US $48 billion)

4. Hong Kong (US $31 billion)

5. Japan (US $28 billion)

Source: KITA 2019

South Korea’s TOP 5 Import Partners

1. China (US $ 107 billion)

2. USA (US $ 61 billion)

3. Japan (US $ 47 billion)

4. Saudi Arabia (US $ 21 billion)

5. Vietnam (US $ 21 billion)

Source: KITA 2019

South Korea’s Current Hot Keywords

Aging Society Single Family

Retirement of Baby Boomers Late Marriage & Working Women

Economy Issues / Social Issues / Political Issues / Environmental Issues

Source:http://www.hani.co.kr/arti/society/society_general/701495.html

http://www.hani.co.kr/arti/society/society_general/701495.html

South Korea’s Top 5 key Industries

1.HealthcareMedical Devices, Pharmaceutical, Biotechnology

2. Aerospace & DefenseAircraft,

Aerospace, Naval Vessels, Communication & Electronics

3. Materials, Parts, and Equipmentssemiconductor, display, basic chemistry, metal, machinery and others

5. Agriculture & Foods

Korea imports process foods from

the US

4. Advanced Technologies5G, smart farms,

smart sensors and others

1. Healthcare

Major Industry Sectors

2. Medical Devices● Korean Government will invest $10 billion in Medical Devices R&D over the next 6 years● Market Size: $ 5 billion (2018) ● Imported about $3.6 billion from other countries in 2018

1. Pharmaceutical and Biotechnology● Korean Government will spend $3.45 million a year for the biohealth sector by 2025● Market Size: $19 billion (2018)

3. Smart Healthcare● Each Year increased by 10% in smart healthcare ● Market Size: estimated $1 billion (2018)

Source: Korea Medical Devices Industry Association

Regional Bio Clusters in Korea

2. Aerospace & Defense in S. Korea

- South Korea 11th largest market for US

aerospace exports in 2018

- US Exports to Korea Exceeded $3.34 billion

(including aerospace products in defense sector)

- Best Products/Services such as

- Aircrafts and aircraft upgrades

- Radar/Surveillance devices

- Avionics

- Parts and components and MRO

a. Aerospace

Source: Korea Aerospace Industries Association

Source: Korea Aerospace Industries Association

Regional Aerospace Clusters in Korea

2. Aerospace & Defense in S. Korea

- South Korea spends the 10th largest budget in the world

- Defense budget increased by 8.2% which it was $42.5 billion in 2019

b. DefenseBest Prospects and Opportunities

1. C41SR (Command, Control,

Communications, Computers,

Intelligence, Surveillance and

Reconnaissance)

2. Aircraft Upgrades

3. Avionics, High-Tech Sensors,

Radars, and Missile system

4. Support for combat equipment

5. MRO legacy parts and components

for old platforms

6. Anti-terrorism products

Source: Ministry of National Defense in Korea & Export.gov

3. Materials, Parts and Equipments

(Unit: $ billion)

Source: Korea Association of Machinery Industry

Korean government plans to accelerate Parts, Materials and Equipments

-Government selected 100 key items from 6 fields such as;

● Semiconductor● Display● Automotive● Electronic● Machinery & Metal● Basic chemistry

In addition, Government is planning to invest $6.42 billion into Materials, Parts, and Equipments related R&D for next 7 years

4. Advanced Technologies in S. Korea South Korea is the first in the world to roll out 5G service in 2019

(Unit: $ billion)

IoT Sales in Korea grew 22.6% on average

each year from 2015 to 2018

The Top 5 Advanced Technologies

1. Smart home and energy-related technology

2. Tissue Engineering

3. Robotics, Drones, 3D printing

4. Cyber Security related products

5. Smart sensors

Source: Ministry of Science and ICT

In 2020, Korean government will spend $4.49 billion into various science and information and

communication technology (ICT) research projects

5. Agriculture and Foods

- Korea imports of consumer-oriented products total $14.6

billion in 2019

- South Korea is the 5th largest export market for the USA

Agriculture

- The US exports to Korea about $8.9 billion in 2019 - In 2018, HMR market size in Korea was $759 million

26% increase

d

21% increase

d

(unit: US$ Billion)

(unit: US$ Million)

BEST PRODUCT PROSPECTS

Understanding Business Practices

Tips for Doing Business in S. Korea

“chae-myun” = face-savingkeeping one’s honor, pride and dignity

South Koreans are very cautious in saving face of others as well as their own

Failure to maintain “chae-myun” may be fatal to business relationship

❖ Respect and acknowledge one’s age,

social standing or reputation

❖ Talk around the circle. Avoid being too

upfront or “brutally honest”

❖ Allow some time for “face building” before

getting down to business

Making Impressions to be Impressive

Making a good first impression on your first meeting with South Korean is “simple” but Critical

✓ Wear appropriate business attire

✓ Carry business cards at all times

✓ Two-hand shake

✓ Do not cross arms or lean back

✓ No memo on business card in front of person

✓ No red ink on person’s name

✓ Lucky Number: 3, 7, 9

‘NO’ = or ≠ ‘NO’

In the U.S... ‘No’ mostly, if not always, means ‘No’

In South Korea….. ‘No’ may or may NOT mean ‘No’

Koreans strive for harmony in their business and personal relationships. To avoid confrontation, rather than say

“no”, they might say “I’ll try”

When offered something to eat, drink or accept as a gift, Koreans usually refuse at first out of courtesy

✓ Try rephrasing the question in different ways

✓ It is natural to ask two or three times

✓ Do present your offer, if unsure

✓ Likewise, politely refuse a gift at first but eventually accept with two hands

Contracts: Fixed vs. Flexible

Contract is considered…In the U.S.: ‘Final step of an agreement’

☛ Terms and conditions are fixed

In Korea: ‘Starting point of an agreement’☛Terms and conditions can be modified

✓ Trust & credibility > a legal binding

✓ Requests for change are generally understood and accepted in business environment

✓ Leave a margin for renegotiation and be flexible with contract terms

Tips and Comments

✓ Korean Buyers consider US products as; Value Added, High-Quality of Raw Materials, Quick Delivery, Reliable Brands, Innovative, BUT….

✓ US Suppliers may need to understand on;● Regulations, Conformity and Intellectual Property on TRQs, MRL, SPS, Food Additives, Biotechnology,

Labeling, Organics

● Expectation on Volume

● Sole or Multi- Distributorship

● Trendy Consumption

● High-Level of Competition

● Communication

● Brand Building

Any questions?

Ken Yang

Korea Business Services, Inc

[email protected]

+82-2-786-7701

mailto:[email protected]

South Korea & Japan Trade Mission

JUNE 1-5, 2020

• Multi-Sector Trade Mission to South Korea and Japan Mission Participation Fee US $1,500 per company

(each additional participant $500)

• South Korea US $2,970 ($0 in MI, OH & PA)• Japan US $4,000 USD ($0 in MI)

Mission registration deadline: February 18, 2020

• Grant funding is available in many States to offset travel costs and mission fees.

• http://www.gsgp.org/projects/international-trade/trade-missions/

http://www.gsgp.org/projects/international-trade/trade-missions/

Monday, June 1:AM: Country Briefing

PM: Business meetings in Seoul, South Korea

Tuesday, June 2:Business meetings in Seoul, South Korea

Wednesday, June 3:AM: Depart for Tokyo, Japan

PM: Business briefing Tokyo

Trade Mission Itinerary

Trade Mission Itinerary

Thursday, June 4:Business meetings in Tokyo

Friday, June 5:Business meetings in Tokyo

Saturday, June 6Depart for US/Canada

o In-country market business

briefings and networking

events

o In-country staff support

of GSGP

o Group assistance with logisticsSouth Korea &

Japan 2020

Trade Mission Websitehttps://www.gsgp.org/projects/international-trade/trade-missions/south-korea-and-japan-trade-mission-2020/

https://www.gsgp.org/projects/international-trade/trade-missions/south-korea-and-japan-trade-mission-2020/

St. Lawrence Governors & Premiers (GSGP) ChairNatalie Chmiko, Director, International Trade, Michigan Economic

Quest ions?

P E

www.gsgp.org

Zoë MunroProgram Director

[email protected]

mailto:[email protected]

��Expand your sales to South Korea & Japan WebinarGreat Lakes St. Lawrence Governors & PremiersGreat Lakes St. Lawrence �Governors & PremiersSlide Number 4Slide Number 5��Doing Business in JapanFenetre Partners - Company OverviewKey Figures about JapanNominal GDP of JapanDemographics of JapanIndustry Life Cycle – How Matured?Market Opportunities in Japan��Target Sector 1: Big Global ManufacturesExample: The domestic Japanese Automotive MarketThriving Japanese Manufactures in the Stagnant (Top 20)Japanese Companies as Your Target CustomersPurchasing Decisions are Made in JapanFDI Stock in Asian Countries (2012)Growing Sectors in Japan��Target Sector 2: Solutions for Aging PopulationJapan's Social Security-Related Expenditure is IncreasingJapan's Working Population is DecliningGrowing Sectors in Japan��Challenges for Doing Business in JapanEntry Barriers of the Japanese MarketHistory of Japan after 17th CenturyOpportunity in the South Korea MarketGeographic Benefit of S. Korean PeninsulaAbout KoreaAbout KoreaAdvancementSouth Korea Top 10 Imports from the WorldSouth Korea’s TOP 5 Export Partners South Korea’s TOP 5 Import PartnersSouth Korea’s Current Hot Keywords South Korea’s Top 5 key IndustriesHealthcareRegional Bio Clusters in Korea2. Aerospace & Defense in S. KoreaRegional Aerospace Clusters in Korea2. Aerospace & Defense in S. Korea3. Materials, Parts and Equipments4. Advanced Technologies in S. Korea 5. Agriculture and FoodsSlide Number 45Tips for Doing Business in S. KoreaMaking Impressions to be Impressive‘NO’ = or ≠ ‘NO’Contracts: Fixed vs. FlexibleTips and CommentsAny questions?South Korea & Japan �Trade MissionSlide Number 53Slide Number 54Slide Number 55Slide Number 56�� St. Lawrence Governors & Premiers (GSGP) Chair�Natalie Chmiko, Director, International Trade, Michigan Economic�Slide Number 58

expand your sales to south korea & japan webinar€¦ · 05/02/2020 · market size: $ 5 billion...

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