Establishing meaningful partnerships in a different language and culture is no mean feat. EEN explores what it takes to do business in South Korea.
We work intensively to build delegates' capabilities through interactive training days and tailored 1-2-1 support."
Louise Hooker, Global Business Innovation Programme manager,
Even before the pandemic struck, digital health was one of four pillars in South Korea’s ‘Fourth Industrial Revolution’ plan, benefiting from substantial government investment and deregulation. In 2020, that emphasis has taken on whole new proportions, and UK health tech providers should be taking note.
To explore this fully, Enterprise Europe Network hosted a live webinar featuring an expert panel of local Korean experts, business leaders and government and embassy representatives.
“What we’re really seeing in response to COVID-19 is a big push for a global leadership position in health,” said Gareth Davies, Head of Science, Innovation and Energy at the British Embassy, Seoul.
The country’s decisive, technology-first approach to the pandemic has given president Moon Jae-in confidence in his vision of a Korean 'digital powerhouse', driven by his new K-deal recovery package. Smart medical infrastructure will be key to the new strategy, bringing the total value of its digital health market to £4.4bn by the end of 2020.
“Samsung, LG and others are redirecting their corporate portfolios towards pharmaceutical, medical and digital technologies,” continued Gareth. “We’re particularly seeing the rise of contactless treatments. This is where things get really interesting for the UK because we know we have a lot of skill sets in this area that Korea can benefit from.”
Logan Yoon, CEO of Klimax Group agreed with that sentiment. “A crisis is a terrible thing to waste,” he said. “We’re facing a new surge of motivating factors encouraging us to look abroad for new partnerships and, with that in mind, there has perhaps never been a better time for us to do business together.”
Korea faces substantial healthcare challenges including a rapidly ageing society, negative birth rate and rising rates of diabetes and lung cancer, all of which require ever-smarter solutions.
Already, 65% of advanced medical solutions in Korea are imported from the US, Europe and Japan. “One of the important factors here is that many of the country’s doctors are educated in these markets,” said Ruslan Tursunov, Healthcare and Life Sciences Specialist, Intralink. “They’re accustomed to using these devices, speak good English and want to keep using western technologies.”
Both governments are keen to encourage R&D, technology and commercial partnerships. The UK, through the Global Business Innovation Programme and supported by the Science and Innovation Network and Enterprise Europe Network Korea, is helping to develop meaningful relationships through introductions to key networks, knowledge exchange and R&D visits. Korea, for its part, is working to provide more soft landing spaces for SMEs coming to explore the local market including innovation and SME support centres in areas such as Anseong and Seoul.
It’s also important to note that the UK-South Korea free trade agreement is signed and will come into effect as soon as the UK withdraws from the EU.
Doing business in South Korea
While the opportunities in South Korea are clear, it’s quite another thing to navigate the local culture and business landscape.
“Speaking Korean is great if you have that as a resource, but what’s really important is taking time to develop relationships,” said Gareth Davies. “You can’t simply come to Korea and have a deal done in half an hour. It will take sustained engagement and social time that builds trust and respect. But be warned,” he adds. “Koreans are master negotiators. They will push and push. So bargain hard, bargain fair and, where you can, be seen to concede.”
Preparation is also key. “I don’t want you to jump on a plane to South Korea without a proper road map in place,” said Logan Yoon. “The key is to identify the niche you need in a partner and educate yourself about the Korean market before educating anyone else. Don’t arrive with a sales pitch; it can look a little self-absorbed in South Korea. Instead, be partner-centric. Find out where they want to be and how you can help bridge that gap.”
“It’s also important to emphasise the holistic culture in South Korea,” continued Logan. “If you ask a Korean to photograph someone, they will include the whole body and surrounding room, never just the head. Westerners tend to highlight single aspects, whereas Koreans will be more interested in the big picture, how all the pieces fit together. You should therefore explain how this project is a step towards a greater good, a goal aligned with the principles of their company.”
Korean business culture also demands a high level of customisation. Visions vary from business to business and so one-size-fits-all solutions are rarely considered sufficient. SaaS companies often struggle for this reason – they approach the market as a universal solution.
“Once you’ve sold them something, South Koreans expect a really high level of service,” said Ruslan Tursunov. “It’s not uncommon for customers to call you up with an issue and ask you to come over and fix it tonight. So, although you likely won’t need an office in South Korea, you will need a really good distributor.” These cultural differences often cause roadblocks for western businesses attempting to enter South Korea, particularly for those ‘going it alone’.
The Global Business Innovation Programme
To help overcome barriers to market entry, Innovate UK, through the Global Business Innovation Programme (GBIP), selects small cohorts of SMEs with cutting edge technologies and international ambitions, and helps them to build in-country connections.
Louise Hooker, GBIP programme manager, emphasised this is not simply a visit but a broad programme. “We work intensively to build delegates' capabilities through interactive training days and tailored 1-2-1 support, enabling them to fully exploit the in-country opportunities.”
The 5-7 day country visits centre on focused B2B sessions and are organised alongside local EEN teams, the British Embassy, the Department for International Trade and trusted local partners. This support lends a huge amount of credibility to delegates, opening doors to high-level contacts at companies such as Samsung and Hyundai.
Upon return to the UK we continue our support, ensuring that delegates can develop the relationships they made in-country and begin market-entry strategies. In the South West, we’ve already supported more than 100 companies through eight GBIPs, five of which were to South Korea.
Although the 2020 visit was postponed, we are expecting to travel out in 2021. In the interim, we have virtualised some of the programme, opening it to more businesses, and are expecting to bolster recruitment in the new year.
“Success in South Korea depends upon long-term, well-nurtured relationships,” said Louise. “So when we come to reviewing GBIP applications, we will be looking for connections that you’ve already made or at least are contemplating. With so many events still virtualised, this is a great time to get started.”
COVID-19 has put South Korea’s digital health sector firmly on the global stage, and the opportunities for UK SMEs should not be overlooked. Market entry will not be easy but with the right preparation and support, businesses will maximise their chances of creating meaningful and profitable partnerships. Enterprise Europe Network, with its global network of local, fully-subsidised advisers, is well placed to help, so get in touch and let’s discuss how we can kick-start your South Korean success story.