If countries aren’t a member of the BRICs or CIVETS groups does this mean that they do not have growth potential for your business? Not necessarily - the acronyms, created by economists, indicate the potential for market growth based upon various factors which can have a positive impact on your business. However, despite this growth potential, if there isn’t a demand for your product, or there are barriers to entry, then it makes sense to look elsewhere to generate future global sales. After all, your business will only succeed by finding and satisfying your customers.
One such market, outside the BRIC and CIVETS world, is South Korea. It didn’t go into recession and is currently experiencing significant growth; over the last quarter (Q2 2010) the economy has grown by 7.1% making it the fasting growing economy amongst OECD countries that quarter. The International Monetary Fund (IMF) has subsequently revised its growth prediction for 2010 to 6.1% which is greater than all the ‘CIVETS’ countries, except Vietnam (6.5%), and almost 2% greater than Russia’s (4.3%).
This rapid and sustained growth has been brought about through export led growth, focused upon its main trading partner – China ($86bn), supported by a robust economic policy to offset the global downturn. This meant the country was one of only three OECD countries not to go into recession, resulting in the market thriving over the last couple of years.
What makes South Korea stand out is the expected effect of the imminent implementation of the EU-Korea Free Trade Agreement (FTA) will have. In 2011 the FTA will remove 97% of tariffs and generate £500m worth of extra business per year for UK companies. In addition it will remove many non tariff barriers like Korea’s recognition of international standards and improved intellectual property protection.
This has resulted in South Korea becoming a country that not only has strong economic growth but the FTA will create a new environment for doing business in. In order for you to understand the impact of the FTA on your business UKTI has identified 100 specific business opportunities that will be created.
Whether some UK companies believe the success in South Korea would be appropriate for them them in comparison to other markets I cannot say. However if you take into consideration the 50+ companies who participated in trade exhibitions, one-one meetings, saw South Korean market experts and visited major commercial areas in September, then the answer should be yes. This is echoed by companies like Delcam who recently celebrated their 1500th Korean customer in September , and many others who have market visits planned.
With the current emphasis on BRICs, CIVETS and emerging markets it is important to remember what really benefits your company - finding the right customers. So, do some research and get all the advice you can . Find the markets with growth potential in your sector, whether it’s part of an acronym or not, and get good advice wherever possible as local knowledge will always be invaluable when entering a new market.
Find contact details for UKTI’s local teams of international trade advisers here
Find South Korea contact details, business opportunities and more here
Richard Webster
3 comments
Comment by Sue Kinoshita posted on
Great stuff Richard, and so important to keep drawing attention to the opportunities in markets that don't necessarily grab the headlines. Places like Korea and Japan offer a much more stable environment for doing business than many of the emerging economies, with few of the concerns about intellectual property, payment reliability and corruption that might still be issues elsewhere. Maybe we need a new acronym for markets like these!
Comment by Sue Kinoshita posted on
Great stuff Richard, and so important to keep drawing attention to the opportunities in markets that don't necessarily grab the headlines. Places like Korea and Japan offer a much more stable environment for doing business than many of the emerging economies, with few of the concerns about intellectual property, payment reliability and corruption that might still be issues elsewhere. Maybe we need a new acronym for markets like these!
Comment by Sue Kinoshita posted on
Great stuff Richard, and so important to keep drawing attention to the opportunities in markets that don't necessarily grab the headlines. Places like Korea and Japan offer a much more stable environment for doing business than many of the emerging economies, with few of the concerns about intellectual property, payment reliability and corruption that might still be issues elsewhere. Maybe we need a new acronym for markets like these!