south korea: the rising economic star. worldclass … · during the past five decades south korea...

SOUTH KOREA: THE RISING ECONOMIC STAR.WORLDCLASS PLAYERS – EXCELLENT WORKFORCE.

ENABLING VALUE FOR YOU WITH OUR OFFICE IN SEOUL.

South Korea is the only developed country included in the group of “Next Eleven” countries (declared by Goldman Sachs to become the world's largest economies in the 21st century), having promising outlooks for investment and future growth.

Besides of the very strong automotive industry (ranked 5th worldwide), especially in terms of high-technologySouth Korea has become one of the major leaders in the world (ranking first in ICT development), with international players like Samsung and LG and big R&D investments in the areas of Internet of Things / 5G.

With our office in Seoul we can offer great support entering and establishing this attractive market, building up bridges from and to Europe and providing any help needed through our well established network on site: e&Co. is a management consultancy for complex change situations and your partner to create value.

Management Summary and content.

8/22/2016 | e&Co. AG | ENABLING VALUE | KOREAN MARKET APPROACH | 2

CONTENT OF THIS PRESENTATION

• ASIAN TIGER SOUTH KOREA: the economic heavyweight at a glimpse

• CHALLENGES: utilizing business opportunities with the right approach

• YOUR PARTNER: e&Co. mission statement – people and office in Seoul

• WHY TO INVEST: profit from innovation and technology leadership

• CONTACT: we are pleased to help you on site

THE ASIAN TIGER AT A GLIMPSE:

KEY FACTS – MARKET OVERVIEW

1

The most promising Asian Tiger provides strong opportunities.


Most

developed

country in

East Asia

11th largest

economy in

the world

(estimation:

7th in 2030)

Very high

educational

level,

healthcare

and life

quality

Leads OECD

nations in

graduates

(science &

engineering)

World's most

innovative

country

(Bloomberg

Index)

First place in

business R&D

intensity and

patents filed

per GDP

World’s best

infrastructure:

Ranked 1st in

ICT

development

Ranked 2nd

worldwide for

highest avg.

annually

worked hours

Highest

household

income in

Asia, 8th

worldwide

5th largest

exporter and

7th largest

importer

worldwide

5G


Market overview: South Korea as an economic heavyweight.

AUTOMOTIVE

INDUSTRY

Fifth-largest automotive industry in the world (measured

by unit production and export volume). Korean cars have

a global market share of about 8 percent (4th worldwide).

SHIPBUILDING

INDUSTRY 2nd largest shipbuilding industry worldwide and also the

world’s top shipbuilding companies are located here.

HIGH-TECH &

ELCTRONICS

World leader in patent activity, along with information

and communication technology – as well as in electronics

manufacturing, including semiconductors and televisions.

Samsung is the second largest tech company worldwide.

The top four “chaebol*” generate 90% of South Korean conglomerate profits (Samsung, LG, Hyundai, SK Group). Main import and export partners: China, Japan, United States and Germany. Main industries:

5th

LARGEST

WORLD

LEADER

2nd

LARGEST

*South Korean type of business conglomerate, oftentimes family-controlled.


ICT: South Korea is leading the global race for 5G.

Most advanced market in terms of 5G

development. Government expects its

local mobile operators (SK Telecom, KT

and LG U+) to be able to trial 5G services

during 2017 and introduce commercial

services in December 2020.

1 SOUTH KOREA

Launch of 5G trial network for the

Summer Olympic Games in 2020

in Tokyo.

2 JAPAN

US operator Verizon Wireless

wants to carry out field trials of

5G technology in 2016,

expecting limited commercial

deployment of 5G services by

2017.

4 NORTH AMERICA

The available infrastructure in South Korea can easily support 5G, as penetration of LTE/4G connections is very strong (close to 63 %), also

owning the world's fastest internet speed and highest smartphone per person rate. EU and South Korea agreed for the future joint

development of 5G networks. Large companies and ventures are actively promoting businesses with the help of governmental support.

Foreign businesses are going to utilize Seoul as a test bed for the 5G market. SUMMED UP: LOTS OF PROMISING OPPORTUNITIES!

>

Development of 5G technology

as key issue for government: But

the country’s internet

infrastructure is still relatively

undeveloped.

3 CHINA

Very active in terms of 5G

initiatives (e.g. EU funding) – but

missing common standards block

development.

5 EUROPE

During the past five decades South Korea has shown an incredible economic growth to become a high-tech industrialized economy, and remains one of the fastest growing developed countries (South Koreas GDP went from 1011.8 billion USD in 2006 to an all-time-high of 1410.38 billion USD in 2014). The reasons lie in careful governmental macro-engineering, sound business practice and a quite unique culture:

• Masters of change, rebuild and reinvention: “can attitude”

• Diligent, respectful, very eager and hard-working (on average 60 hours per week), punctual, concrete, highly educated (7% of GDP is spent on education), flexible, loyal, target-oriented, global thinking

• Developing, sustaining and growing network: professional and personal life is built on relationships

• Confucian values: family, respect, virtuosity, work and learn hard, avoid extremes and live moderately

• Kibun (“face”): Koreans strive for harmony in their business and personal relationships.

Culture and mentality matter: creating a leading country.


CHALLENGES TO BE CONSIDERED

WHEN DOING BUSINESS IN SOUTH KOREA

2

EU AND KOREA HAVE A VERY GOOD STRATEGIC BUSINESS RELATIONSHIP: The FTA (Free Trade Agreement) entered

into force in July 2011, going further than any previous agreement in lifting trade barriers. It is also the EU's first trade

deal with an Asian country, creating many opportunities for market access – with specific focus on the automotive

and electronics sectors. But still, some challenges need to be considered:

CULTURAL DIFFERENCES: major South Korean companies are still run along regimented, hierarchical lines

and ‘face’ (kibun) is of greater importance than in almost any other country in Asia.

BUSINESS ENTRY: local advisors with deep knowledge of the business culture are necessary; also Korean

language is a requirement for a foreign market entrant, as Korean is still the main business language.

PERSONAL RELATIONSHIPS: everything depends on this, so it is important to spend time establishing a good

own working relationship and building trust with South Koreans. It is central to demonstrate that you have

a long-term commitment to the relationship (and market) rather then aiming only at quick profits.

CONTRACTS: are seen as a starting point rather than as the final goals of a business agreement and as

the parameter within which the working relationship will be conducted.

ACCOUNTING AND FINANCE PRACTICES: credit measuring methodology differs – to obtain finance in

South Korea, greater emphasis is placed on the debt to equity ratio, profitability and liquidity.

GEOPOLITICAL TENSION: the difficult relationship between North Korea and South Korea remains tense.

Challenges to utilize your business opportunities in South Korea.


YOUR IDEAL PARTNER:

WE SUPPORT YOU WITH KNOW-HOW AND NETWORK

3

OUR EXPERTISE FOR YOU

• Insight view into the Korean business structure: we have access to small and medium sized enterprises and their technologies

• We know and live the Korean corporate culture and have a strong regional government approach

• Broad network to academic, governmental (central and local) and company landscape

• Bridge to other Asian countries and companies/institutions

Mission statement e&Co. South Korea.


OUR CUSTOMERS

• OEM and Tier 1/2/3

• Government institutions

• Regional governments

• Small and medium enterprises

MAIN INDUSTRIES AutomotiveMechanical Engineering

ICT, Electronics

TYPICAL PROJECTS

• Market studies & technology assessments

• Accelerator for investment and venture opportunities

• Subject matter expert for local network structures

• Enabling B2B and federal network structures

• Government’s regulation and policy in the future

Some current developments in the Korean automotive industry.


‘Vehicle-Infra-

Cloud platform’

is a highly rising

system in South

Korea

BMW is starting

to reduce

promotion

options and

targets building

premium

Samsung and

LG with new

department ‘E&E

(Electric &

Electronic) in

Vehicle’ to foster

connected

business

Government

focusing on fuel

cell and EV for

eco-friendly cars

(supported by

subsidies)

South Korea is

Daimler sedan’s

(E-Class) 2nd

biggest market

and S-Class’s 4th

biggest market

in the world

Strategic

Partnership

‘Hyundai-

Samsung’ and

‘Hyundai-LG’ for

Auto-ICT future

VERY HIGH-SKILLED AND HARD-WORKING LABOR

South Korea is one of the most highly educated countries in the world.

HIGHLY INNOVATIVE ENVIRONMENT

A global innovation leader in many fields, ranking first in ICT innovation, R&D spending & patents. The

government has been pushing to establish a creative economy ecosystem by building platforms.

CENTRAL BRIDGE TO EAST-ASIA

Strategically located between China and Japan, South Korea is positioned within an average air travel

time of three hours to over 81 cities with a population of one million or more.

EASE OF DOING BUSINESS

South Korea is ranked 4th in ease of doing business by the World Bank. South Korea is especially recognized

for its superiority in trading across borders (1st world wide).

TECHNOLOGICAL HIGHLY DEVELOPED – GLOBAL TEST-BED MARKET

Ranking first in ICT Development, e-Government and 4G/LTE coverage. One of the leading industries for

Internet of Things and 5G development. Test-bed for new concepts by Microsoft, Intel, Google, and others.

ATTRACTIVE INCENTIVES FOR FOREIGN INVESTORS

South Korea provides tax reliefs, cash grants and free land provision to foreign investors.

It’s not the question why to invest, but rather when: very quick.


YOUR CONTACT IN SOUTH KOREA:

OUR OFFICE IN SEOUL

4


Enabling value for you in South Korea – and from Germany.

e&Co. Ltd. | 7th Fl. Sambo Bld. 13-2 Yeoyido-Dong Youngdeungpo-Gu | Seoul

T: +82 2 780 9841| M: +82 10 5408 2788 | F: +82 26008 9838

E: [email protected]

MIN HO PARK

e&Co. AG | Hubertusstraße 50 | 54439 Saarburg | Germany

T: +49 6581 8291-623 | M: +49 151 52742523 | F: +49 6581 8291-610

E: [email protected]

GEZA BRUGGER

VISIT US AND KEEP UPDATED: WWW.EANDCO.CO.KR

mailto:[email protected]

mailto:[email protected]

… that the OECD declared South Korea to be the country with the highest estimated national IQ on Earth?

… that almost half of the population in South Korea has the same three surnames?

… that people with the same surname can’t marry each other?

… that a child is considered to be one year old when it is born?

… that South Korea totally dominates liquor consumption per capita?

… that Seoul residents get the least amount of sleep of any residents of major cities in the world (less than six hours a night)?

… that South Korea passed a law that requires all online shopping and banking to be done using Internet Explorer?

… that in South Korea your blood type determines the type of your personality?

Interesting trivia: did you know …


www.eandco.com

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reserved by e&Co. AG.

e&Co. AG Hubertusstraße 50 |54439 Saarburg | Germany

T.: +49 6581 8291-600| E: [email protected]

Where to find us.

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WOLFSBURG

MUNICH

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south korea: the rising economic star. worldclass … · during the past five decades south korea...

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