South Korea is one of Australia’s closest economic and trading partners, and with its high-income economy, there is a strong market for Australia’s high quality goods and services.
For Australian SME exporters thinking about entering the South Korean market, it is important to first identify the opportunities for your business and any potential risks.
Opportunities for export
The South Korean market has a number of characteristics that make it an attractive destination for Australian SME exporters. South Korea’s rapid historical industrialisation and high income economy have created strong demand for imports in a range of key industries, which Australian SMEs are well placed to take advantage of.
Three industries in particular that should take note of the opportunities in South Korea are the services, mining and agriculture industries.
In 2014, Australian service exports to South Korea were worth A$1.4 billion, with education and tourism leading the way. South Korea is Australia’s third largest source of foreign student enrolments after China and India, and is Australia’s ninth largest source of visitor arrivals.
Australia is South Korea’s third largest supplier of agriculture and food-related products. It is expected that South Korean demand for food products like beef, dairy, fruit, vegetables, sugar and wheat is set to grow, following the free trade agreement signed between Australia and South Korea in December 2014.
This agreement significantly reduces barriers to trade for Australian exporters, with 99.8 per cent of Australian exports being duty free. In the first year alone, it is anticipated that the trade liberalisation under the agreement will contribute A$226 million to Australia’s GDP.
