The Korea Trade-Investment Promotion Agency said that local export firms should target the middle class in emerging countries in order to tide over the protracted global economic slump.
The state-run agency held its yearly presentation on local companies’ overseas market expansion strategy at InterContinental Seoul COEX on Tuesday.
The three-day event kicked off with opening speeches by KOTRA CEO Oh Young-ho and Knowledge Economy Minister Hong Suk-woo, as well as reports from directors of nine regional headquarters around the world.
The speakers generally agreed that the global economy this year still faces a rocky road ahead.
“With the prolongation of the eurozone crisis and the growth slowdown of the BRICs (Brazil, Russia, India, China) region, the prospects are not so bright for the year 2013,” said Park Yoon-shik, professor of international banking and finance at George Washington University.
As a solution, KOTRA officials suggested a two-track strategy: focusing on the middle class and domestic market of newly emerging states, and analyzing the evolving consumer expenditure patterns of developed ones.
Last year, Korea’s exports to developed countries showed a $42.8 billion loss, but ended up in a surplus amounting to $69.2 billion in new markets such as China, Southeast Asia and Eastern Europe, according to ministry data.
“Korean companies should make efforts to win over China’s domestic market and its middle class, which accounts for up to 23 percent of the entire population,” said Park Jin-hyung, director of the China headquarters.
“The Chinese government, under its new leader Xi Jinping, is boosting its local market as a new growth engine.”
Youn Heuiro, the Asian headquarters chief, said that the Association of Southeast Asian Nations region holds a sustainable market which is expected to reach the $1.7 trillion mark by 2015.
Officials from developed areas, on the other hand, urged Korean firms to observe the changing economy and target a niche market.
“Despite the decline of the market, miniature goods are becoming popular among consumers who wish to downsize their spending,” said Um Sung-pil of the North American region headquarters.
Given the circumstances, KOTRA last year set a group of strategic markets ― Myanmar, Libya, Turkey, Indonesia and Colombia.
Other countries such as Vietnam and Mexico may be added to the list this year, depending on market situations, officials said.
By Bae Hyun-jung (firstname.lastname@example.org