The Republic of Korea has become not only an important economic player in Asia but also a growing and complementary partner for Australian trade over the past 60 years.
The Australian Trade and Investment Commission notes that “The level of investment between Australia and ROK has grown significantly over the past decade, from just A$600 million in 2003 to A$49 billion in 2018’ (Source: DFAT South Korea Factsheet 2019)
Additionally, the Korea-Australia Free Trade Agreement (KAFTA) has made 99.8% of Australian exports to the ROK duty-free. As a result, this brings tremendous opportunities for Australian businesses to seek new target audiences in Korea.
While the increasing trade between both nations is great, it’s not all that Korea offers to Australian businesses. Korea is home to many highly developed manufacturing facilities, advanced electronics such as Samsung, SK Hynix, and LG, as well as world-leading automotive companies such as Hyundai, Kia, and Renault Samsung.
Complimentary trading conditions for both nations, advanced manufacturing and distribution networks, along with recent trade deals are allowing easier access into Korean markets for Australian businesses, making this country an untapped opportunity to help your business flourish.
Taking these opportunities onboard, here are a few considerations when it comes to business etiquette and forming relationships with Korean business partners;
- Culturally, respect is extremely important, especially when it comes to age, seniority or the hierarchy of experience. When meeting a partner in Korea one of the first things that you may be asked is your age or job title. This may seem strange at first but helps establish seniority and subsequently will determine what type of language and respectful gestures will be used between partners.
- Just as our reviews of other Asian cultures, business cards are an imperative for Korean introductions. Consider getting cards printed in both languages and when you receive a business card, accept it with both hands, taking a few moments to study the details of your new partner. This will demonstrate respect and show interest in getting to know the other person.
- Similar to our other recommendations, building relationships with your potential partners first is the beginning to establishing enduring partnerships. Contrary to Australian culture where contracts are agreed first then relationships are built afterwards, in Korean culture, relationships are built first and the business agreements will follow. Relationship building is usually done outside of an office setting, on the golf course, at dinners and having fun, with Karaoke singing are all part of building these relationships.
- When doing business with people from Korea, it’s helpful to be patient and don’t rush to finalise the business deal. Keep in mind that many of the decisions will be shared amongst the team, including leadership who may not have been present in the meeting, so taking a long term approach, be patient, address feedback and work towards an enduring partnership.
- Thinking about presentation and professionalism in Korea, many people wear business attire in the workplace, so appearance with a business suit and often a tie or coat are generally well received as a sign of professionalism.
Korea will continue to grow in size and importance as a trading partner for Australia. Australia’s wealth of produce and mining resources are complementary to Korea’s advanced manufacturing and distribution networks.
Korea could offer your business new audiences and opportunities for growth at a time when Australia needs to diversify our trading partnerships beyond China.