Weekly Business Korea – Week 42

TOPIC : Business in Korea

South Korean Startups Step on Gas

Breakthroughs in technology in South Korea have turned the country into a seedbed for startups.

A country in which large firms still rule the roost, Seoul’s startup sector is flourishing all the way.

The western hemisphere of Seoul has a nine-storey edifice covered with vibrant colors and an enormous red bull sculptured outside houses over and above 100 startups. Ranging from single-hand activities being managed only via a locker and a laptop on the ground floor, sprawling to fully developed and functional offices on the higher storeys, this startup hub in Seoul has been holding 1,282 operations through different phases of growth in the last two years.

It has all the essential features are part and parcel of all startup hubs across the world – common cafeteria and work premises, a relaxation space with beanbags and oval-shaped settees, a modular kitchen with all the modern amenities for food science firms, a broadcast studio, a reading room-cum-book repository, a shaft separating two floors and even a convenience store for those working through late hours.

Approximately 467 accelerators, venture capital funds and government establishments backed startups in Seoul and its neighboring states in 2018, a few were supported by large firms like Samsung and Naver. In all, Seoul alone has 85 accelerators and its angel investment has soared from US$170m ($250m) in 2015 to US$250m in 2017.

According to Forbes, since 2015, the South Korean government’s aid to startups has reached $4bn; the biggest per capita government aid to startups in the world. By 2022, Seoul endeavors to feature among the world’s top five startup cities.

Startups especially prefer Korea for its high-speed internet, fast implementation of the 5G network and its super absorption capacity of technology. The pursuit for startups is being fueled by a gradual shift from the standard big firms.

North and South Korea Soccer it Out in Pyongyang, after 30 Years

For the first time since 30 years, North Korea played South Korea at men's football in Pyongyang.

The FIFA World Cup Qualifier match on Tuesday, at Kim Il-Sung Stadium, ended in a 0-0 draw.

Previously, the two sides played a friendly match in 1990, after which they had met in Japan in the 2017 East Asian Cup when South Korea beat North Korea 1-0.

Though both nations are soccer lovers, the draw spells positive for North Korea as the South is already at number 37, higher than the North (ranked 113) in the world ranking.

However, South Korean media and spectators’ presence was barred from the game and there was no live streaming either. Only FIFA's website could be accessed periodically for the latest scores.

According to a spokesman for the South Korean Unification Ministry, officials had called upon the North to permit access and transmission, but the request was ignored.

Apart from South Koreans, even foreign tourists who were in North Korea to see the match were disallowed from attending, as stated by various tour managers.

South Korea has won entry to FIFA world cup many times and made it to the semifinals of the FIFA World Cup in 2002. Comparatively, North Korea’s best was reaching the quarterfinals in 1966.

Both teams have to retain their top positions in this qualifying round to reach the next qualifier and boost their hopes of reaching the 2022 World Cup. Hypothetically, both teams stand a chance.

South Korea launches KF-X Warplane Prototype

The first larger-as-life prototype of the KF-X fighter jet was exhibited by South Korea. The country is crafting this mock-up in collaboration with Indonesia since its key design reviews were approved in September.

The new-age aircraft designed and being built by Korea Aerospace Industries (KAI), is a cheaper, less-stealthy version of the American F-35. It is planned as a replacement for South Korea’s old fighter jets and also be exported.

The prototype was exhibited on Monday at the Seoul International Aerospace and Defense Exhibition (ADEX).

The first of the 40 advanced F-35A, purchased by South Korea from the US, arrived this year.

Presently developing a KF-X prototype, KAI plans the ground and flight tests in 2021 and 2022, as stated by company officials.

A top official also added that it would not have been possible to develop KF-X without being backed by the experience of designing and developing T-50 and FA-50. Subject to the condition that his identity is kept a secret as he was prohibited from interacting with the media, the top official said that the progress is advancing stage by stage.

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Korea Company Formation: Your Essential Guide to Expansion

In the age of global connectivity, South Korea stands out as a beacon of technological advancement and economic prosperity, offering promising opportunities for international businesses. Establishing a subsidiary in this market goes beyond mere access to a thriving consumer base—it serves as a gateway to a hub of innovation. However, venturing into this realm requires meticulous strategic planning and a deep understanding of the local business environment. This guide provides a comprehensive overview of the key stages in the process of Korea company formation, ensuring a smooth and compliant entry into one of Asia's most dynamic markets. Navigating the Registration Process Launching a subsidiary in South Korea begins with the pivotal step of registration. This involves selecting the appropriate legal entity, such as a joint-stock company (Chusik Hoesa) or a limited company (Yuhan Hoesa), each carrying distinct legal obligations and implications. Thorough documentation is essential, including drafting articles of incorporation, outlining business objectives, and compiling a list of directors and officers. These documents undergo scrutiny by the Korean court for approval, establishing the subsidiary's legal identity and facilitating subsequent operational processes within the framework of Korea company formation. Choosing the Right Legal Structure The choice of legal structure for your South Korean subsidiary significantly impacts control, liability, and financial flexibility. While larger enterprises may opt for a joint-stock company for scalability and fundraising capabilities, smaller businesses often prefer a limited company for its simpler structure and reduced reporting requirements. Making this decision necessitates expert legal counsel and a clear understanding of long-term business objectives and strategies. The selected legal structure ensures compliance with South Korean regulations and aligns seamlessly with the parent company's global operations within the context of Korea company formation. Navigating Financial Regulations and Banking Practices Compliance with South Korea's financial regulations is vital for the successful establishment of a subsidiary. This involves adherence to foreign exchange controls and understanding capitalization requirements. Establishing a corporate bank account in South Korea is crucial for managing transactions, payroll, and other financial activities. Additionally, transferring initial capital in accordance with South Korean investment regulations demonstrates the parent company's commitment and serves as a crucial investment for the subsidiary's future endeavors. Navigating these financial intricacies demands careful planning and consultation with experts well-versed in the local banking and investment landscape within the framework of Korea company formation. Establishing Real Estate and Infrastructure Presence Establishing a physical presence in South Korea is a complex endeavor that involves strategic decision-making regarding location, infrastructure, and real estate. Factors such as market accessibility, proximity to suppliers and customers, and the local labor market must be carefully considered when selecting a suitable location. Additionally, a comprehensive understanding of South Korean real estate law, including lease agreements and property rights, is essential. The setup phase also involves building robust infrastructure, such as communication systems, office space, and technology networks. This phase is crucial as it not only demonstrates the operational capabilities of the subsidiary but also reflects its commitment to long-term growth within the South Korean market as part of the Korea company formation process. Conclusion Venturing into establishing a subsidiary in South Korea is a strategic endeavor that, if executed effectively, offers significant rewards. Success requires a deep understanding of the Korean market, meticulous planning, and strategic execution at every stage, from legal registration to financial compliance and physical establishment. Despite its challenges, this undertaking can lead to substantial business growth and a strong position in one of the world's most dynamic economies. With thorough preparation and attention to detail, your business can successfully navigate the intricacies of setting up a subsidiary in South Korea, paving the way for a prosperous and impactful presence in the Asian market. Pearson & Partners: Your Expert Companion for Korean Market Expansion. Are you planning to expand your business into the vibrant Korean market? Let Pearson & Partners guide you through the process. We specialize in providing comprehensive visa acquisition and tax accounting services, ensuring a seamless transition. Our team is adept at navigating the complexities of Korean regulations, ensuring a compliant and smooth business setup. Contact us today for expert guidance tailored precisely to meet your unique business objectives and regulatory needs.

How to Become a Successful Seller on Coupang

Coupang is one of South Korea's largest e-commerce companies, often compared to Amazon. It was founded in 2010 by Bom Kim and has grown rapidly, becoming a dominant player in the Korean e-commerce market. Coupang offers a wide range of products including electronics, household goods, groceries, and more, with a focus on fast delivery. They operate their own logistics network, allowing them to offer same-day or next-day delivery for many items, which has been a key factor in their success. Before delving into this article, it might be beneficial to refer to the following piece.How to sell in Coupang Marketplace How to Become a Successful Coupang Seller? To boost conversion rates on Coupang, sellers can employ two strategies: 1) Ensure their product is easily discoverable by customers, and 2) strive to become the top choice for a given item. Your product must appear prominently when customers search for it, ideally on the initial search results page. In cases where multiple sellers offer the same product, yours should be positioned as the preferred choice, featured above competing listings. Coupang favors sellers who consistently receive positive feedback from customers, as a satisfying shopping experience is paramount to buyers. To understand the specific elements that contribute to a positive shopping experience, refer to the checklist provided below. 1. Does your product match what customers are searching for? Ensure that your product aligns with customer demand; selling sought-after items gives you a competitive advantage. Listing your full inventory is advisable to provide bundle delivery and maximize benefits. Additionally, if a product sought by customers isn't listed on Coupang, being the first seller to list it can position you as the top choice. Coupang often notifies sellers via email about brands or products in demand yet unlisted; regularly check your registered email for insights on which products to list. 2. Can customers easily find your products? Emphasizing the importance of search cannot be overstated. Typically, customers search, click, and make purchases. They locate desired products, compare options, and proceed with buying. To ensure your products appear in customer searches, consider the following questions: - Have you utilized effective search terms? - Have you configured both purchase and search options?- Have your categories been precisely specified? With filter search becoming more prevalent, it's crucial to expand search options by including product details like material, quantity, and color. Omitting these details, even if they're not mandatory, diminishes your chances of being found by customers. Remember: providing more information increases your visibility. 3. Is your inventory supply enough? Do you maintain adequate inventory levels? Regardless of a product's popularity, if it's out-of-stock (OOS), customers can't purchase it, and Coupang won't designate it as a top item. Maintaining appropriate stock levels is crucial to retaining your item's top status. Monitor your inventory status by accessing WING > Manage Products > Product Notifications and reviewing the [Out-of-Stock] and [Almost Out-of-Stock] tabs. Ensure you replenish stock for products expected to experience increased sales. 4. Does your ultimate price offer competitiveness? If you believe customers are solely seeking inexpensive products, you're mistaken. It's a common misconception that lowering prices is the only path to securing the top spot for your product. Customers aren't solely focused on low prices; they seek value. While they may opt for the cheapest option when presented with similar products, they prioritize a reliable shopping experience over minor price differences. Coupang designates sellers who offer stability and customer support as item winners, even if their prices are slightly higher. To gauge the price disparity between your product and the item winner, navigate to WING > Product Notification and review the [Non-Item Winner] tab. Remember, the final price encompasses shipping costs. Lowering product prices but inflating shipping fees can deter customers and harm sales, as shoppers are highly sensitive to shipping charges. 5. Do you offer free shipping? Through experimentation conducted on Coupang, we made an intriguing discovery. Transitioning from paid shipping to conditional free shipping resulted in a notable uptick in sales by 32%, with a concurrent increase of 38% in average visitor numbers. (Test duration: 5 weeks spanning June and July 2018; involving 233 Coupang sellers) This suggests a significant portion of customers are inclined to add additional items to their cart to qualify for free shipping. However, to prompt customers to take this action, it's essential to have a diverse array of products available. If there aren't other items to add to the cart for free shipping eligibility, customers may abandon their purchase altogether. This underscores the importance for sellers to offer free shipping and list their full inventory. 6. Have you responded promptly to customer inquiries? As a seller, it's essential to recognize that customers can be quite demanding. This underscores the importance of promptly addressing issues to avoid potential problems like stock shortages or defects. Responding swiftly to customer inquiries is just as vital as ensuring your product detail pages are visually appealing. Typically, customers rely more on product reviews than the details provided on the page when making their purchasing decisions. Therefore, it's crucial to actively manage product reviews. Your dedication will ultimately lead to consistent sales and payoff in the long run. Conclusion In conclusion, becoming a successful seller on Coupang involves a strategic approach that focuses on meeting customer expectations and optimizing various aspects of your selling process. By ensuring that your products are aligned with customer demand, easily discoverable through effective search optimization, and competitively priced while offering value, you can enhance your chances of success on the platform. Additionally, maintaining sufficient inventory levels, offering free shipping options, and providing prompt responses to customer inquiries are essential elements for maximizing sales and maintaining a positive seller reputation. As your company endeavors to sign up as a global seller on Coupang, implementing these strategies will help you navigate the platform effectively and achieve steady sales growth. For further assistance or inquiries, please feel free to contact us.

South Korea eCommerce: Where to Sell

South Korea is renowned for its highly advanced internet business landscape, ranking as one of the world's leaders. In 2019, it stood as the sixth-largest eCommerce market globally, boasting a revenue of $74 billion, surpassing countries like Germany and France. Additionally, the size of the e-commerce market in South Korea is projected to be around USD 2.80 trillion in 2024, with a forecasted growth to USD 6.82 trillion by 2029. This growth is anticipated to occur at a compound annual growth rate (CAGR) of 19.49% between 2024 and 2029. However, tapping into the Korean eCommerce market presents challenges, including limited information on marketplaces and language barriers. This article aims to shed light on the Korean marketplace environment, offering valuable insights for those venturing into this dynamic market. Naver Smart Store Naver Smart Store, an online C2C eCommerce platform owned by the Korean portal giant Naver, focuses on enabling small business owners to participate in the digital economy. One key advantage of establishing an online store on Naver Smart Store is its lower fees compared to the Coupang Rocket partnership. Additionally, Naver has announced that it will waive commission fees for sellers during the first year, aiming to support local small businesses. Since the onset of the Covid-19 pandemic, Naver Smart Store has experienced significant growth in its seller base. The platform has witnessed a remarkable increase in the monthly average number of new smart stores, rising from approximately 15,000 per month in 2018 to about 35,000 per month in April 2020, more than doubling over two years. Coupang Often dubbed the "Korean Amazon," Coupang stands as one of Korea's largest online retailers. Established in 2010 as a daily deals (coupon) venture, it has since burgeoned into a behemoth valued at over $9 billion. Coupang's triumph hinges on its adeptness in catering to the distinct needs and preferences of local consumers, achieved through the development of an end-to-end eCommerce platform renowned for its unparalleled delivery speed. A standout feature of Coupang is its acclaimed "Rocket Delivery" service, offering same-day or next-day deliveries, made feasible by the country's high population density and the expansive infrastructure cultivated by the platform. Remarkably, 70% of all Koreans reside within a 10-minute radius of a Coupang logistics center. Moreover, Coupang has devoted substantial efforts to optimize its mobile interface, ensuring a seamless and enjoyable shopping experience for users accessing the platform via mobile devices. GMarket GMarket, another well-known Korean marketplace, has been under the ownership of eBay since 2009. This eCommerce platform facilitates global trade, allowing users from around the world to engage in buying and selling activities. GMarket made history as the inaugural Korean eCommerce platform to be listed on the NASDAQ in 2006 and was also the pioneer in offering an English website, a feature that garnered significant popularity among expatriates residing in South Korea. The platform offers a wide array of products ranging from electronics to clothing to technology. With its availability in English, Chinese, and Korean languages, GMarket enjoys considerable popularity among the foreign community in Korea. 11 Street 11 Street is an e-commerce platform managed by SK, one of South Korea's largest corporations, with a significant presence in both Korea and Malaysia. It's a popular destination for finding attractive deals, coupons, and sales. With a focus on prompt delivery, most products are shipped within 2-3 business days, emphasizing secure transactions and providing seller training. Their extensive product range covers electronics, fashion, beauty, food, health, and furniture. In 2017, 11Street introduced its cross-border e-commerce platform, extending its services to clients globally. Other Marketplaces in South Korea Interpark Kurly Market Tmon Conclusion Entering the eCommerce market in Korea can be challenging for overseas sellers due to regulations and language barriers. Creating an effective product page is crucial for convincing customers to purchase your product, particularly in competitive categories. Moreover, providing excellent customer service is essential to meet the expectations of Korean internet users, including seamless mobile payment options, responsive customer support, swift delivery, and clear return policies. If you're considering opening an account on Korean marketplaces but require assistance, feel free to reach out to Pearson & Partners Korea for expert guidance and tailored advice for your specific situation.

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