Support from big businesses for overseas operations of their partner vendors has jumped two-fold over the past three years, a report by the lobbying group of large companies said Wednesday.
   
The Federation of Korean Industries (FKI) said the number of conglomerates helping their partner vendors start operations abroad rose to 41 last year from just 18 in 2010, with the number of small and medium enterprises (SMEs) benefiting from such a move rising to 2,939 from 1,428.
  
Broken down by types of support offered, the latest findings showed the most common kind of support centered on helping vendors send delegations to enter untapped markets, as well as assisting companies in taking part in various exhibitions.
   
"In 2010, when conglomerates announced the comprehensive plan for mutual growth with partner firms, there were only 27 companies that got help to send market research teams abroad to see if they can make headway in a particular country, but this grew to 431 last year," the federation claimed. It said exhibition support surged from 40 companies receiving assistance to 290, a 7.2-fold increase.
   
Such efforts have paid off with more SMEs benefiting from such cooperative relationships, it said. 
   
Hyundai Motor Group had played a major role in helping its vendors find new opportunities in places such as China, the United States, Europe and India, the federation said. 
  
The world's fifth largest automotive conglomerate has helped 599 first tier and second tier companies set up operations near the assembly lines of its own overseas production plants.
  
The numbers represent a 4 percent increase from 576 SMEs that were assisted in 2010 and is an 18-fold jump from 34 companies that set up overseas plants alongside Hyundai in 1997.
  
More significantly, the report said Hyundai-related vendors generated overseas sales reaching 34.8 trillion won (US$31.4 billion) as of 2013, up 38 percent from 25.2 trillion won reached in 2011.
   
Besides Hyundai, the FKI said GS Homeshopping has played a role in creating a viable foreign market that has allowed smaller South Korean companies to market their products abroad. 
  
The retailer helped sell 100 billion won worth of locally made products abroad in 2013, from 65 billion won worth in 2012.
   
Others such as KT have invited partner companies to participate in foreign projects in places such as Mongolia that allowed these companies to make money and tap into potential new business opportunities down the line.
   
FKI said that large companies engage in supporting vendors because doing so can build trust as well as improve the quality of products made.
   
A poll carried out on conglomerates showed 31.4 percent believe assisting vendors has strengthened trust, with 29.4 percent saying it contributed to higher quality products being delivered.
   
"With South Korean establishing more and more free trade agreements with countries around the world, it is imperative that SMEs become more competitive on the global stage," Yang Geum-seung, head of the FKI's center for large and small business cooperation, said.
   
He added that for SMEs to play a role on the global stage, big companies must support their overseas operations. (Yonhap)