Korea: Springboard to China?
In this latest blog, Jeroen Plag (ING) talks about the importance of meeting etiquette when doing business in South Korea, the opportunities in the country’s energy sector as well as the indirect trade opportunities for Dutch companies.
How to do business in South Korea? In any event not by employing ‘Dutch directness’, which would undoubtedly have an adverse effect...
This became clear during a very interesting presentation on tips and tricks for doing business in South Korea, which kicked off the trade mission of Dutch companies. The mission arrived in the Asian country last week after calling on Japan. Both visits coincided with a state visit by King Willem Alexander and Queen Maxima.
In general, the Dutch have a good reputation in Korea and asking Guus Hiddink along as figurehead was a smart move by the delegation’s leaders. Another popular Dutch figure is Hendrik Hamel, the first foreigner to enter the ’hermit kingdom’ (isolated Korea) in the 17th century. The Royal House is the next ‘H’ to have done well, as is reflected by the close relations between our royal family and the Korean president. The fact that the Netherlands, just like Korea, has large (economically) powerful neighbours and is mainly dependent on export shows we have much in common.
Jeroen Plag, head of Client Coverage Asia, Americas & UK at ING, was part of a trade mission to South Korea in November with the Dutch King and Queen and more than 100 companies to explore the opportunities for Dutch businesses.
Whereas in the Netherlands everyone is considered to be equal, in Korea, hierarchy, respect for elders, a strict meeting etiquette and loss of face are important cultural elements to adhere to as a foreign entrepreneur. These are all facets of a necessary lengthy introduction process prior to doing business: including a Korean barbecue, beer and Korean soju rice wine. The latter is an important element in doing business here as eating and a lot of drinking are key to forging strong ties.
Indirect trade popportunities
But obviously the mission concentrates on doing business. South Korea relies on import for 96% of its total energy use. This means there are ample opportunities in financing energy projects, particularly offshore energy, for companies all over the world. South Korea is focusing strongly on liquid natural gas, but in the past week wind energy proved to be a recurrent theme, also during the CEO round table discussion at which the King and Queen were present. South Korea’s Minister of Economic Affairs, Yoon, took extensive time to answer questions from the Dutch CEO delegation. The most important topics were deregulation of the South Korean market, and the ongoing trade discussions with China. These too present indirect opportunities for Dutch companies as Korean enterprises are much closer to China, which is their most important market. If the trade relations between the two countries continue to improve, it is important for Dutch suppliers to focus on Korean export companies such as machinery and car manufacturers.
During the past year, Jeroen Plag has blogged on the website of Dutch daily ‘Het Financieele Dagblad’ (FD) about his business travels to the various regions in which ING is operating. On 12 November he published this 20th blog, this time on South Korea, concluding the series for FD. Jeroen will continue his blog on this site, INGCB.com.
Topics addressed during the various seminars included smart mobility, healthy ageing, energy, agriculture and horticulture. South Korea’s approach to an ageing population is an interesting one in the sense that it presents possibilities for manufacturers of new products, instead of just focusing on the cost element of care. That the trade mission was also about intensifying broader relations, as was illustrated by the Dutch Design Week, taking place at the ultramodern Dongdaemun Design Plaza, which was opened by the King and Queen. Various objects by Dutch designers were exhibited, including the VANMOOF city bike.
Seoul is a city in motion and is working on yet another expansion. Conglomerate Lotte is in the process of building a multifunctional complex including hotels, shopping malls and a skyscraper that will be the tallest in Seoul. The lift will probably be imported from Japan, as only the fastest is good enough. A great detail is that the Lotte complex already includes a Van Gogh café, a great mixture of South Korean and Dutch culture!