South Korea, considered one of the four Asian tigers, is a country noted for its growth and economic development. It is in East Asia, in the southern part of the Korean peninsula, where it borders North Korea to the north, the Sea of Japan to the east, the Korean Strait to the south, which separates it from Japan, and the Yellow Sea to the west. The capital of South Korea is Seoul, one of the 10 most populated cities in the world, is in second place with a total of 22,500,000 inhabitants; a curious fact is that the economic expansion and the urban phenomenon of this city made the population increase from 900,000 citizens in 1945 to 10 million in 1988.
Its currency is the South Korean Won. The economy of this country is very famous for going from being one of the poorest countries in the world to being the tenth largest economic power in the world in just one generation. For 60 years they have sought to move from being a rural and agricultural nation to an urban and industrialized country, for which they have placed special emphasis and investment in the development of technology and innovation. Thanks to Santander Trade Market’s resources and tools, we know that the main industries are textiles, steel, automotive, shipbuilding and electronics; and that South Korea is the world’s largest producer of semiconductors. The industrial sector employs 25% of the population, while the agricultural sector employs only 4.8% of the population. Within the agricultural sector we find crops such as rice, barley, wheat, corn, soybeans, and sorghum.
The 5 most influential and important brands in the world from South Korea are the following:
- Samsung: Multinational conglomerate founded in 1938. Mainly positioned for its technology and electronics companies, but also has companies in finance, construction, biotechnology, insurance, and services. With a presence in 73 countries worldwide, it has production plants in several of them and a high level of import and export activities.
- LG Group: South Korean company that manufactures products in the areas of electronics, cell phones and petrochemical products. It was founded in 1947 and has several subsidiaries, some of them are LG Electronics, LG Chem, LG Display, LG Uplus, among others. It is present in 49 countries around the world.
- Hyundai Motors: It is the largest automobile manufacturer in South Korea and the sixth largest in the world. It was founded in 1967 and since 2007 has excellent ratings in the JD Power initial quality survey, one of the most respected indicators in the industry, which measures the performance of cars and customer satisfaction during the first 3 months of use. Present in more than 200 countries.
- Kia: A South Korean automaker. Founded in 1944 and is the second largest automaker in the country after Hyundai Motors, producing more than 3 million vehicles per year. Its dealer network covers 172 countries.
- Fila: This company used to be an Italian sportswear brand, until it was acquired in 2007 by an independent subsidiary called Fila Korea. It was founded in 1911 and is now headquartered in the country’s capital, Seoul.
South Korea’s imports and exports
In 2021, South Korea’s imports increased by 27% over the previous year, it is one of the countries with the highest volume of imports in the world ranking. The main imported products are oil, gas, and other natural products, as it is a country with very limited natural resources. Almost half of total imports are raw materials, and within this group, fuels and mineral oils represent 32.7%. Other sectors of great importance are semiconductors, electronic components, and communication and information equipment, which together represent 14.4% of total imports. The main import destinations tend to be Asian countries, such as China, Japan, and Taiwan; however, American countries such as the United States and Mexico also play a very important role in imports.
Mexico and South Korea
- For Mexico, South Korea is its sixth largest trading partner worldwide.
- For South Korea, Mexico is its main trading partner in Latin America.
- Mexico and South Korea began diplomatic relations in 1962, seeking to create agreements to facilitate the movement of people, capital, and goods.
- The trade relationship, in the absence of a Free Trade Agreement, is governed under the rules of the World Trade Organization.
- Both are considered emerging economies, being members of the G20, OECD, APEC and MIKTA.
- The Bilateral Economic Framework is governed, among other instruments, by an Agreement for the Promotion and Reciprocal Protection of Investments (APPRI), an Agreement for the Avoidance of Income Tax Evasion and Double Taxation, and multiple sectorial agreements on economic, technical, and scientific cooperation.
- There are more than 2,000 companies in Mexico with South Korean investment in their capital stock, including Samsung, LG, KORES, KEPCO, KOGAS, Posco, Hyundai and KIA.
- In 2016, the Strategic Alliance for Mutual Prosperity between Mexico and Korea celebrated 10 years of formation, a mechanism that received a new impetus after the summit of the presidents of Mexico and Korea in April of that year.
The Korean Negotiator
- If you are looking to create a lasting and effective relationship, respect, punctuality, and knowledge about their culture are basic aspects to consider when negotiating.
- Other key factors to consider are trust, quality, and compliance.
- Their working day is from Monday to Friday; it is advisable to schedule business meetings from 10 am to 12 pm and from 2 pm to 4 pm.
- Business appointments must be scheduled at least 3 weeks in advance, they are usually made by phone and then confirmed by email.
- Information presented must be in English and Korean.
- Punctuality is taken as a gesture of respect.
- The first meetings will be at the company’s facilities, restaurants, or hotels.
- Dress should be formal and preferably in dark colors for both men and women.
- When giving or receiving gifts, be sure to use both hands. If you are going to give one, make sure it is something from the company or contains the company’s logo and make sure it is not made in Japan or Korea. Koreans will not accept the gift at the first time, so you must insist, and they should never be opened in front of the giver.
- Koreans are usually introduced by third parties, then will come the greeting which will be a handshake with eye contact. After the greeting, the business card should be handed over with both hands, in English and Korean.
- It is normal for Korean negotiators to start first with a talk before going into the details of the negotiation, this is to build trust.
- They are very direct and avoid saying no in a negotiation.
- They are tough when negotiating, applying the Kenshu code which specifies that commitments are only made when the counterpart proves to be reliable.
- Koreans make decisions collectively, so do not expect an immediate response, it may take weeks.
South Korea is a very important country from which we should learn great things, thanks to its accelerated economic growth and development in a short period of time. Always remember to know the culture of your counterpart before starting a negotiation and be always polite.