South Korea is one of the biggest e-commerce markets worldwide. It is well established by both domestic sales and exports of its fashion, food, and electronics goods. The high internet usage and mobile penetration rates in South Korea are major factors for the strong e-commerce sector.
Industry figures suggest that South Korea’s retail e-commerce volume will grow to US$90.5 billion by 2024, up from US$41.9 billion in 2017. South Korea can expect continual growth in exports to Asia, particularly to ASEAN. In 2020, South Korea’s trade volume with ASEAN amounts to US$142 billion.
In addition, digitalisation remains a key pillar for South Korea, which has a well-established digital infrastructure. The Korean government has also introduced policies to encourage the digitalisation of SMEs, which forms an integral part of the country’s digital economy framework. In 2020, it was announced that Korea and Singapore had launched negotiations for a new Korea-Singapore Digital Partnership Agreement (KSDPA). These negotiations were concluded in Dec 2021.
If you are an e-commerce solution provider, digital solutions provider or offer warehousing or logistics services, you can tap into opportunities to provide the capabilities, solutions, and networks for Korean companies to enter ASEAN.
As part of South Korea’s National Pilot Smart City project, two cities -- Sejong and Busan -- are assigned as the leading models of future smart cities. The Sejong pilot city has an AI-based concept, focusing on innovative factors such as mobility, healthcare and education. In contrast, the Busan pilot city has a data and AR-based concept, focusing on innovative factors such as robots, urban water cycle and zero energy system.
South Korea’s smart city policy has resulted in increased fiscal investment and deregulation. As of 2019, 78 local governments have secured dedicated organisation for smart cities and 67 are participating in smart city government support projects.
In July 2018, Enterprise Singapore and the Korea Trade-Investment Promotion Agency (KOTRA) signed a Memorandum of Understanding, to explore opportunities in joint Smart City and Infrastructure Development projects in ‘third country’ markets outside of Singapore and South Korea (such as the ASEAN market), facilitated through sharing of industry and market knowledge, and networks.
Take advantage of these opportunities through Enterprise Singapore’s partnerships with key in-market multipliers for investment leads identification, and collaborate with strategic partners in global markets.
You can also consider partnerships with Korean firms to identify and collaborate on infrastructure project opportunities in ASEAN or India, across the infrastructure verticals such as smart cities development, green energy, environment, buildings, renewables, utilities and transport.
A key focus of the Korean government’s energy policy is to reduce the country’s reliance on coal and increase the share of renewable energy. In 2020, the Korean government announced their long-term energy plan to deliver 40% renewable energy generation by 2034. The midterm goal is to increase South Korea’s capacity for solar and wind power to 29.9 gigawatts by 2025.
South Korea has good potential for offshore wind and solar renewable projects, given its long coastline, favourable topography, and ample sunlight. The South Korean government aims to build 12GW of offshore wind capacity by 2030 and has been investing significantly in offshore wind projects.
On top of that, South Korea has ambitions for the creation of a hydrogen economy, particularly in the transport sector. As part of the Green New Deal plan announced in 2020, the Korean government aims to expand the country’s green mobility fleet to 1.33 million electric and hydrogen powered vehicles.
Singapore companies in this sector can also consider partnerships with Korean firms to tap into opportunities in the renewables sector in the Korean market, or collaborate on green projects in ASEAN.
South Korea’s food and beverage market enjoys a good market growth rate in recent years. The total revenue is expected to grow at a 12.6% CAGR between 2021 and 2025 with projected market volume of US$16.4 billion by 2025.
The value of Korea's food imports has also increased over the years, with increased demand in food linked to health and wellness benefits. In 2019, Korea’s food imports exceeded US$27 billion.
Additionally, the Korean government is also actively developing the food and beverage industry. In 2014, the Korea Ministry of Agriculture, Food and Rural Affairs created the Korea National Food Cluster, the first government-supported food industrial complex in Northeast Asia, also known as Foodpolis. The Korean government carved out 2.3 million square meters of land in Iksan City and earmarked $474 million for the project to encourage more food innovation collaborations.
South Korea has been a natural market for Singaporean F&B brands keen to expand their global footprint. Enterprise Singapore can help you to extend your reach into Korea with the right market entry approach and support of key in-market multipliers in navigating regulatory hurdles.