• Exporting to Korea – The short guide for SME owners

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    The imports of Western products to Korea has increased the past decade and it seems like the trend won’t change in the coming future. One reason is thanks to the FTA (Free Trade Agreement) that was established with the EU and the US in 2011 and 2012 respectively. But when imports of foreign products increase we also see increased safety controls and adoptions of foreign standards.

    Finding Korean customers

    Korean customers are different in comparsion with customers in the West. In some areas, you can’t adopt the same marketing-or sales strategies because they simply don’t work there. The next chapter shows you common ways of finding Korean customers.

    Korean trade fairs

    The last week we presented two product categories that are exhibited on two major trade fairs in Japan. This week I change the country to Korea and the product categories to medical equipment and food.

    KIMES – The trade fair to visit for medical equipment

    KIMES (Korea International Medical and Hospital Equipment Show) is the biggest trade fair in Korea that represents medical equipment. The fair is held on annual an basis and was visited by almost 60000 persons in 2012. Most of the visitors come from:

    • Manufacturers.
    • Laboratories.
    • Hospitals.
    • Fitness centers & gymnasiums.
    • Health insurance companies.

    Products on display (examples):

    • New technologies and products.
    • Stethoscope.
    • Ultrascanners.
    • Waste disposal management system.
    • Operating lights.
    • Operating tables.
    • Freezer, Blood Plasma.

    Exporting-to-Korea

    Application & expenses

    The process is quite easy and same as for most of the international fairs. You can submit your application on their website. A booth has the size of 9 square meters and can be rented from the price of 3000 USD. If you need additional equipment the price will be higher.

    Time & place

    13-16 March 2014
    COEX Korea Exhibition Center
    Seoul Korea

    Seoul Food & Hotel – The trade fair to visit for food & agricultural products

    Seoul Food & Hotel is one of the biggest food fairs in Korea and was visited by almost 41000 people in 2013. The fair is located just 20 minutes from Seoul in the city of Goyang and attracts professionals from all over the world.

    Products on display (examples):

    • Meat.
    • Wines & spirits.
    • Tea & coffee.
    • Cheese & dairy.
    • Organic food.
    • Health products.
    • Baby food.

    Application & expenses

    The application can be printed from their website, filled in and sent to the email address of the organizer. The expenses are determined in a different way compared to other fairs I have written about. You pay for the area rented and the equipment needed (That can be carpets, walls and tables for instance).

    Time & place

    13-16th of May, on annual basis (Application deadline January 31st)

    KINTEX, Daehwa-dong
    Ilsan-seogu, Goyang-si
    Gyeonggi-do, Korea

    Korean VISA

    Like Japanese VISA regulations, people from most of the European countries and the US are allowed to stay in Korea for up to 90 days without a VISA. Though, if required, it only cost you 30 USD and you can apply at your nearest embassy or consulate.

    Find a Korean distributor or local sales offices

    To hire a distributor can be by far the best choice when you search for customers in a country like Korea. It’s not easy for foreign business owners to understand either marketing strategies or customer preferences in a continent or country where they have never operated before. If you would handle the process completely by yourself, with limited experience on hand, I bet the cost and time spent would be higher.

    So if you plan for expansion, it might be a good choice to hire a distributor or local sales agents (before you set up your own sales office if that’s your plan). These professionals understand the market in a better way than you and can help you to set up marketing strategies, customize your products and communicate with the customers in their own language.

    In general, it’s not very hard to find a distributor, but the most essential is to find a serious and experienced one. You can find distributors at trade fairs, by analyzing competitors, on the internet, through contacts or by advertizing on the internet or in magazines. Be sure to verify the distributor before you sign a contract with them. Below I listed some essential points to confirm:

    • Confirm everything you can by email and phone before you visit the distributor on-site. Ask questions! You don’t want to make a trip in vain.
    • Tell them what your expectation is and emphasize your seriousness.
    • Ask the distributor to show a list of other companies who is currently working or has previously worked with them.

    And now, a an important question: Which city should you go for in Korea? Seoul is the capital, biggest municipality and the place I would go to and promote a foreign brand. Almost 50% of Korea’s population live in Seoul and the place where you will find most of your customers most likely.

    Trademark registration in Korea

    You need to register your trademark in Korea if you plan to sell your products there. Korea is, as Japan and China, under a first-to-file regulation. It means that the person who first registers the trademark will also receive all legal rights and the registration for that trademark. I guess you understsand what consequences that might lead to.

    The trademark application process

    The trademark can be registered via a third party or by yourself, but it needs to be handled through the Korean Intellectual Property Office (KIPO). The application process is similar to other developed Asian countries:

    • Submission of application
    • Formal examination (If the applicant does not have any address or place of business in the country, then it must be written in Korean and submitted by a Korean patent agent )
    • Substantive examination (Takes around 11 months. A refusal will require amendments of the application)
    • Publication (The trademark application to be published)
    • Decision of grant protection
    • Registration (Application approved)
    • Renewal (A trademark registration needs to be renewed every tenth year)

    Fees to be paid by the applicant:

    The application fees are determined based on what product class you apply for. The costs below are presented in the Korean currency Wong, the exchange rate is around 1050 KRW/USD. You can also visit KIPO’s website for more information regarding of the fees to be paid by the applicant:

    • Application fee: KRW56000 per product class if you submit the application over the internet and KRW66000 for paper applications.
    • Examination fee: KRW18000 if you submitted over the internet and KRW20000 for paper applications.
    • Registration fee: Basic fee KRW211000 and an additional fee of KRW211000 for each product class added (In case of multiple-registration).
    • Renewal of trademark registration: Basic fee KRW310000 and additional KRW310000 for each added product class.

    KC – The Korean certification mark for electronics

    The KC mark is applied to electrical products and used to guarantee the safety for humans and properties. The KC mark guarantees that the product is safe to use (i.e. no electric shocks, fires or chemical hazards). All products that need a KC mark and with an input voltage of 50-2000V must be tested and inspected. Factory inspections are required and performed on the applicant’s expense.

    Application process and time needed

    It takes around 45 days to receive the certification mark and the process when you apply for the KC mark is normally as following:

    1. Submission of application form
    2. Authorization letter
    3. Issue the marking label (According to KC standard)
    4. At least 2 product samples to be provided for tests (1 if EMC will not be needed)
    5. List of parts (BOM) and other information concerning the part and its sub-components
    6. Circuit diagram
    7. Pattern diagram
    8. User manual
    9. CB, EK or KS certificate/report (If your parts don’t have any of these certificates, additional tests will be needed)
    10. EMC report
    11. Factory inspections being conducted once a year

    KFDA – Korea Food & Drug Administration

    KFDA is the responsible organ for the creation and enforcement of standards of imported food, cosmetics and medical equipment to Korea. In order to assure that the importer can meet the safety guarantees and giving them the responsibility for safety of food imports they need to be registered as ”good” importers. The application process can be seen below:

    • Submission of application.
    • Documents to be evaluated by the MFDA.
    • On-site inspection by the KFDA.
    • Evaluation and determination by the KFDA.
    • Registration as a good importer.

    Inspections of food-and agricultural products

    Your products need to be tested by a laboratory before exporting them to Korea. The laboratory must also be approved by KFDA. When it’s been confirmed that your products have been tested by an approved laboratory the inspection can start. The inspection process is quite straight forward:

    • Same product confirmation (Assurance that the products come from the same company).
    • Document review (2 days) – When results from the laboratory shows that your product meet the standards needed, a second consignment will be delivered for document review.
    • Sensory test (3 days) – For flavors, colors, taste, storage, packaging and labelling.
    • Laboratory test (10 days, 14 days for retort or canned food) – Needed if your product has been rejected several times, if standards have changed or of it’s the first you export the food products.
    • Sampling test (5 days, random test)- KFDA will pick products based on their annual sampling plan.

    Transportation of your products

    When it comes to medical equipment and food, I can’t see any better freight option than sea freight. And there’s one reason for that: The lower costs. Medical equipment and food are in general heavy and require big volumes, to ship by air would cost you a lot of money. However, exporters sometimes use air freight due to the following reasons:

    • The products need to arrive on a certain date and time is critical.
    • Product samples to be used at exhibitions and the volumes are low or time is critical.
    • Product samples to be sent to the importer and the volumes are low.
    • Products to be sent for testing and the volumes are low.
    • If orders increase fast and you can’t meet the delivery schedule without air freight.
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