Before entering into a contractual relationship with a Korean manufacturer’s/commissioned representative (agent) or distributor, U.S. firms should conduct a thorough due diligence check on a prospective business partner. A contract with an agent or distributor should be handled with care and with the assistance of an attorney. The Commercial Service in Korea can assist by providing companies with the preparation of an International Company Profile (ICP) (Consult: http://export.gov/southkorea/servicesforuscompanies/icp/index.asp) report, which provides detailed financial and related business information on the company with which you seek to work.
The most common means of product or service representation in Korea are:
The performance of your agent/distributor should be regularly/frequently monitored. An underperforming or non-performing agent/distributor should be counseled and properly guided. If, after a period of time, performance is still poor (and only after careful consideration of all legal and contractual obligations) then a termination of contract should be considered. Once the termination is legally binding, the U.S. firm should begin searching for a new distributor.
Finding a Good Partner in Korea
The U.S. Department of Commerce’s Commercial Service (CS) office in Seoul, like CS offices around the world, offers the Gold Key Service (GKS) (See: http://export.gov/southkorea/servicesforuscompanies/gks/index.asp) to assist U.S. companies in finding a good local partner.
U.S. exporters are encouraged to contact one of over 100 U.S. Export Assistance Centers (USEACs; please contact the USEAC closest to your business). Consult: http://export.gov/usoffices/index.asp to begin the process.
U.S. exporters of food and agricultural products can also find assistance from one of USDA’s State Regional Trade Groups; please consult: http://www.fas.usda.gov/programs/market-access-program-map/state-regional-trade-groups. Also inquire directly to the Agricultural Trade Office in Seoul, Korea: www.atoseoul.com/
The GKS provides:
CS Korea strongly recommends that:
U.S. companies should protect their intellectual property, trademarks, and patents with the Korean Intellectual Property Office (KIPO). (Consult: http://www.kipo.go.kr/kpo/user.tdf?a=user.english.main.BoardApp&c=1001) as a minimum safeguard of your intellectual property rights.
A local Korean or U.S. attorney in Korea can easily perform these tasks. Under Korean law, applications to KIPO must be completed and submitted in Korean. This should be done in the U.S. company’s name and not the Korean agent/representative’s name. Since the passage of the KORUS FTA, there are now numerous U.S. law firms with offices in Korea. Additionally, there are more than 20,000 Korean lawyers practicing in Korea.
The dynamism and maturity of the Korean market, coupled with its strategic location in East Asia, may lead U.S. companies to consider opening an office in Korea. The following options exist:
A basic checklist for setting-up an office in Korea includes:
Korea has a large pool of conscientious and highly-educated workers. Female employees are especially strong candidates, given their educational achievements, language abilities, and the prevalence of traditional Korean cultural attitudes toward female employees (which have historically prevented women from progressing as quickly as they would in a U.S. company).
Due to differences in U.S. and Korean employment practices, CS Korea recommends consulting with Korean employment agencies before hiring.
Contact the Seoul Global Center website for information on the Seoul Metropolitan Government’s program which occasionally offers free or reduced rent/office space for foreign residents (http://global.seoul.go.kr/).
According to Korea Fair Trade Commission (FTC), the franchise industry was estimated at USD 100 billion with 1.4 million employees in 2016. The number of franchises increased from 3,901 (2015) to nearly 4,268 (2016). Among 4,286 franchises, 3,219 were food service franchises, 280 were retail franchises, and 769 were service franchises. The average lifespan of a franchise brand is 4.5 years, and only 0.8 percent of franchises survive after 10 years in Korea. While new franchise brands are introduced in Korea every year, over 800 brands disappear every year.
Franchisors interested in this market should take into consideration the following:
Korean franchisees are reluctant to pay high franchising fees and royalties often required by U.S. companies. Minimum facility size and number of store openings required by some U.S. franchisors are also a challenge for the Korean franchisee. The expensive nature of the commercial real estate sector in Korea can potentially affect the feasibility of a project which may otherwise offer great promise in other markets. Korean franchisees prefer to do business with U.S. franchisors with established brand names that are already popular among Koreans.
Generally, there are four types of franchise investors in Korea:
Potential franchisors should also be aware of issues relating to the Korea Commission for Corporate Partnership (KCCP). One of KCCP’s important roles is the designation of the industries reserved for small and medium enterprises (SMEs). Once designated, big companies’ store expansions can be limited to certain geographic areas or nationwide expansion can be limited to certain of number of stores. In 2016, the KCCP designated several service providers, which included bakeries and restaurants (Korean, Japanese, Chinese, Western and Foreign food, snack, and lunch box restaurant chains) and some manufacturing industries as reserved for SMEs. The restrictions applicable to the designated companies, within the relevant industries, will be valid for 3 years.
Despite a very intense brick-and-mortar retail environment, over 70 percent of direct sales in Korea are made via the Internet and mobile devices. For more information on Internet and mobile commerce, please read the Electronic Commerce section of this chapter.
Door-to-door sales and multi-level marketing are other important direct sales channels. According to the Korea Direct Selling Association (KDSA: http://www.kdsa.or.kr), door-to-door sales and multi-level marketing sales reached approximately USD 13 billion in 2015, up from USD 11.6 billion in 2014. The most common products sold through direct selling are: wellness products (40.7 percent), cosmetics & personal care products (35.7 percent), and household goods & durable products (9 percent).
Chart 1: Consumer Sales in Korea via ‘Direct Selling’ by Product Category – 2015
Source: Korea Direct Selling Industry Association (KDSA), 2015
Door-to-door sales remained stable at around USD 8.2 billion from 2013 to 2015 (most recent data available). According to the Korea Direct Selling Association (KDSA: http://www.kdsa.or.kr), the number of companies registered as door-to-door sales company decreased to 25,161 in 2015, from 25,773 in 2014, due to ‘market restructuring’ and the growth of e-commerce. This stagnation or even decreasing trend could remain in the future as a by-product of the growth in e-commerce.
Multi-Level Marketing (MLM)
Korea’s multi-level marketing sales for 2015 approached USD 4.7 billion, which is a 14.6 percent increase from 2014 (USD 4.1 billion). The number of registered multi-level marketing companies in Korea has increased to 137. It is reported that these companies employ some 8 million sellers/distributors.
The Korean government reduced the restrictions on MLM companies by passing legislation eliminating most existing market barriers against MLM products, such as the obligation to disclose retail prices on MLM product labels. Oversight of the MLM industry is the responsibility of the Korea Fair Trade Commission (KFTC).
Chart 2: Consumer Sales in Korea via Multi-Level Marketing (in billions of USD)
MLM activity for U.S. products is concentrated in the cosmetics, cleaning products, health and wellness, and kitchenware industries -- and has been expanding. MLM companies should promote their products and services appropriately and efficiently by carefully analyzing Korean market trends and sophisticated and mature Korean consumers. Accurate knowledge of the Korean retail and consumer market can prevent unnecessary conflicts with government agencies, consumer ‘watchdog’ groups, or industry groups. There are numerous consumer, business & industry associations, governmental groups, and think-tanks which regularly collect valuable information on consumers and consumer trends.
Koreans prefer to maintain local control of JV operations with foreign entities. Thus, the financial goals, internal organization, and key management issues of a JV must be agreed upon by all involved parties as early as possible. Reaching such an agreement can take time.
Foreign direct investment (FDI) is encouraged and promoted by the Korean government. With the ratification and implementation of the KORUS FTA in 2012, greater cooperation and encouragement of FDI is expected. Korea offers strong incentives to potential foreign investors in a bid to attract more foreign direct investment into Korea. President Park has spoken frequently about the government’s strong will to improve the business environment for foreign investors and attract more FDI.
Contractual Agreements in Korea
Well-written, well-understood, and well-executed contractual agreements are the basis and backbone to a U.S. firm’s success in Korea. Cultural differences surrounding the expectations of a contractual agreement and how one successfully arrives at a mutually beneficial agreement is often the basis of consternation and challenges. For Koreans:
Foreign investors are encouraged to consult the Korean Commercial Arbitration Board (Consult: http://www.kcab.or.kr/servlet/kcab_adm/memberauth/5000). The KCAB advises foreign companies on contract guidelines.
Korea is an established member of the World Trade Organization’s Government Procurement Agency (GPA) protocols, with non-discriminatory government procurement procedures.
Korea’s GPA commitments include:
U.S. companies interested in Korean government procurement must work with Korea’s Public Procurement Service (PPS). It is highly recommended that U.S. firms have, and maintain, a reputable representative or agent in-country, to carefully monitor PPS tender opportunities. Consult: http://www.pps.go.kr/eng/index.do.
PPS supports domestic/indigenous equipment and supplies. It is also responsible for the purchase of goods and incidental services required by central and sub-central government entities, government construction contracts and the stockpiling of raw materials. There are nine provinces in Korea, seven metropolitan cities, as well as numerous ‘new cities’ (Sejong City, Songdo City, and Hwaseong Dongtan, to name a few).
Bidders must register with PPS at least one business day prior to the date of an opening bid. Foreign bidders can register with PPS (Korean language only) prior to entering into a contract. Failure to register constitutes cause for rejection of a bid.
Korea has launched its Korea On-line E-Procurement System (KONEPS) at www.g2b.go.kr. In part, this system includes:
The KORUS FTA, in effect since March 15, 2012, has a chapter devoted to government procurement. Consult: http://www.ustr.gov/.
Defense procurement is an active part of CS Korea’s portfolio. U.S. companies which sell both to foreign and U.S. military should be cognizant of the importance given to military procurement on the Korean peninsula.
The Defense Acquisition Program Administration (DAPA: http://www.dapa.go.kr/mbshome/mbs/dapa_eng/) is responsible for Korean defense procurement and was established to ensure transparency in the process.
ROK defense products/equipment are acquired through a fairly sophisticated and mature procurement system which includes direct purchase, sales agents, and importer channels. U.S. manufacturers/suppliers of defense equipment should use a well-qualified/vetted Korean agent, familiar with the ROK defense system and knowledgeable of key members of the country’s Air Force (ROKAF), Navy (ROKN), Army (ROKA), and Agency for Defense Development (ADD). CS Korea, through our Gold Key Service program, can assist U.S. defense companies in identifying a potential, well-qualified representative. Former (retired) ROKAF, ROKN, and ROK A officials have good potential as commissioned representatives in Korea. Local representatives must register and be certified by DAPA to supply their products and services to the military end-users.
A well-selected representative will be able to provide their U.S. supplier/manufacturer with information about the status of defense bids and procurement plans. This is a very mature defense community. Thus, U.S. defense suppliers should only consider this market if they have a proven track record in the U.S. and/or in other Tier I countries.
Companies wanting to supply their products/systems to Korea’s military are required to register with DAPA; this is a 10 day process. For more information on the registration and bidding process, refer to DAPA’s procurement portal: https://www.d2b.go.kr/English/jsp/index.jsp.
U.S. defense industry equipment standards are accepted in Korea as most Korean defense systems are based on American standards. Interoperability of systems is critical in what is now a 64-year U.S.-ROK defense partnership.
South Korea is 70 percent mountains, forcing it’s nearly 50 million people into key population centers: Seoul metro area: 10+ million; Busan metro area: 3.5 million; Incheon metro area: 2.9 million; Daegu metro area: 2.5 million; and Daejeon metro area: 2 million. Most freight forwarders use an extensive network of first-class railways, 3,000 kilometers of highways, and air routes that crisscross the country.
Incheon, Gimpo, and Busan’s first class airports and ports are the points of entry for most products. Products are then transferred by first-tier roads and railways to major modern distribution centers in Seoul, Busan, Incheon, Daegu, and Gwangyang. South Korea has 15 airports. Eight are international airports, including the world-class Incheon International Airport near Seoul. Around 77 international passenger and cargo airlines operate regularly scheduled flights between Korea and many nations around the world (see Chapter 4 of this report for additional information on Korea’s airports).
The Port of Busan is the world’s fifth largest cargo port. As well, Incheon Airport is building a new terminal (scheduled to be completed in 2017) and a new airport is being contemplated for Korea’s southeastern region, presently being served by Busan’s Gimhae Airport.
Distribution methods and the function of intermediaries vary widely by product in this mature market. Traditional retail distribution networks of small family-run stores, stalls in markets, and street vendors are being replaced by large discount stores.
In mid-2012, as part of Korea’s efforts to protect small “mom-and-pop” stores, under the auspices of “economic democratization,” the government imposed a rule closing big-box discount chains on two Sundays per month. Many major retailers initially ignored the restriction. The government then imposed financial penalties, which eventually led to compliance, with major retailers closing stores on the second and fourth Sunday of each month, as of late 2012.
Korea’s major cities have numerous fashionable and expensive large department stores and boutiques. Thousands of second-tier and third-tier retail stores also abound. Full-line discount stores (FDS) have gained in popularity, as has U.S.-based Costco, which entered the Korean FDS market more than 10 years ago and is successfully competing against Korean rivals E-Mart and Lotte Mart, as well as Homeplus by TESCO, a UK retailer.
The rapid expansion of discount chain stores is planned nationwide, with suburban satellite cities attracting the greatest number of stores. Distribution of goods through large discount chains is one of the best ways to market foreign products to Korean consumers.
It should also be noted that parallel imports can legally enter Korea. Many U.S. companies continue to give exclusive contracts, since territorial limits in neighboring countries enhance the value of an exclusive area in any one country. Any parallel importer in Korea, not receiving the support of the OEM, and not moving a meaningful volume of product, cannot be guaranteed a steady source of income. The legitimate exclusive distributor still has considerable advantages in Korea.
A handful of Korea’s highly successful and sophisticated retailers have contacted CS Korea from 2012 to the present, seeking introductions to U.S. name-brand retailers and anchor stores for their respective three-to-five year mall construction plans.
In April 2015, CS Korea completed a 16-page International Market Insight (IMI) report, describing how Koreans make purchases via foreign online retailers. This document can be found under ‘market research’ on the CS Korea website https://www.export.gov/article?id=Korea-eCommerce.
Korea has a very well-defined domestic express delivery service. On average, delivery times are next-day delivery (called “Taekbae”) or same-day delivery (called “Quick Service”). Delivery costs depend on the size/weight of the package; usually starting at around 2,600 KRW for next-day delivery (from 350g to 30 Kg in weight) and around 10,000 KRW for same-day delivery (if in close vicinity). Quick Service tends to be more informal in terms of pricing, but just as reliable. Some of the major domestic express delivery companies are the Korean Post Office (https://parcel.epost.go.kr), CJ Express Delivery (https://www.doortodoor.co.kr/main/), Lotte Global Logistics (www.lotteglogis.com), Hanjin Express (http://hanex.hanjin.co.kr), and Logen Express (www.ilogen.com).
International express delivery from the U.S. to Korea is primarily handled by Fedex (www.fedex.com), DHL (www.dhl.com), UPS (www.ups.com) and Hanjin (www.hanjin.co.kr/Global_html/us/en/index.jsp). The average estimated delivery time is about 1-2 business days from Los Angeles to Seoul, and about four days for other areas of Korea. The approximate cost is USD 55 for one pound and USD 10 for every additional pound. Customs procedures are normally handled by the express delivery service company. However, Korean Customs does require that personal recipients of a parcel sign-up for a Personal Customs Clearance (PCC) code in order to clear the parcel through Customs. Korean Citizens can sign up for this PCC code through the website https://p.customs.go.kr.
Korea is a country with intense, demanding, and eager consumers. As well, Korea’s retail sector is popular among the over 5.9M Chinese visitors (as of 2015) that come to Korea every year (but down from 6.1M in 2014). U.S. companies wanting to sell into this market should endeavor to follow these guidelines:
E-commerce is a key component of the overall consumer market in Korea, a country with nearly 90 percent broadband internet and smartphone penetration. Characteristics of e-commerce in Korea include:
CS Korea completed a 16-page International Market Insight (IMI; April 2015) describing how Koreans make purchases from foreign online retailers. This IMI document can be found under ‘market research’ on the CS Korea’s website http://2016.export.gov/southkorea/industries/ecommerce/ecommmarketresearch/index.asp.
According to International Telecommunication Union (ITU), Internet user population in Korea reached 89.9 percent in 2015. In addition, Korea ranked 16th globally with over 45 million internet users. According to a survey by Pew Research Center, 88 percent of Koreans have smartphones putting Korea ranked number one among 40 nations.
Current Market Trends
The growth of the Korean retail sector is led by e-commerce. While e-commerce is growing rapidly, traditional retailing channels are suffering. Consumers tend to go to traditional stores for window shopping but purchase goods at online retail sites to find the best deals. In order to survive, traditional retailers try to integrate their offline stores with their online stores to provide a seamless customer experience while increasing sales through multiple channels.
As competition between e-commerce companies is increasing, quick delivery service is a key to attract more customers. Coupang, one of the most popular e-commerce sites in Korea, announced in 2015 that it would invest USD 1.3 billion to build logistics infrastructure for its delivery service called “rocket delivery.”
Domestic E-commerce (B2C)
Domestic e-commerce sales have been increasing for the past few years reaching USD 55.9 billion in 2016. Online purchases surpassed hypermarkets’ sales in 2016 making e-commerce the biggest retail channel in Korea. Popular e-commerce sites include Auction, G-market, 11st Street, Coupang, Ticket Monster (TMON), and We Make Price. Based on the number of mobile and PC users combined, 11st Street was ranked the first in 2016 with 19 million visitors. Coupang was first for mobile users followed by 11st Street and TMON.
Cross Border E-commerce
Online purchases from foreign retail sites reached USD 1.6 billion in 2016, up from USD 1.5 billion in 2015, with 65 percent purchased from U.S online retailers. Although the U.S. is ranked number one, the U.S. Market share, which was 73 percent in 2014, has been continuously decreasing due to the expanded presence of E.U. and China.
Korean B2B e-commerce market data is not available; however, due to the explosive expansion of B2C e-commerce and tough competition among e-commerce players, e-commerce companies have been looking to expand into B2B e-commerce on consumable sales to small and medium size companies. G-market was the first one to launch a B2B shopping site called ‘Biz on’ in 2012. Auction also has B2B sites called ‘Biz club’ for food ingredients and ‘Biz plus’ for other consumables. Interpark has ‘I market Korea’ that integrates B2B and B2C services. Wemakeprice started ‘Wemakeprice Bizmall’ in 2016. With 5.4 million business owners and 3.5 million small and medium-sized companies, the B2B e-commerce market is expected to be very competitive.
In 2016, the most popular item sold through e-commerce platforms was travel & reservation services, which makes up 17.4 percent of the total sales. Home appliances & electronics (11 percent), clothing (10.6 percent), home & car accessories (10.2 percent), cosmetics (7.9 percent) and computer (6.2 percent) followed. Compared to 2015, cosmetics showed the biggest growth rate of 46.7 percent. Food & beverage grew by 29.5 percent and home appliances by 21.9 percent.
E-commerce Intellectual Property Rights
It is illegal to sell counterfeited products on e-commerce sites and to bring any counterfeit goods into Korea via cross border e-commerce. Before 2015, one item could be brought into the country assuming that it was for personal use. However, Korea Customs Service is enforcing a stricter policy not to bring in any illegal counterfeited goods according to the intellectual property law.
For B2G E-commerce, Korea ON-line E-procurement System (KONEPS) is the only channel in Korea. In 2015, 48,000 public organizations and 320,000 companies were registered on this system with a total volume of business at USD 42 billion. The site deals with more than 60 percent of Korea’s public procurement market, whose size is about USD 105 billion and was complimented as a best practice by the UN and OECD.
According to a survey by Korea Internet and Security Agency, PC and mobile shoppers preferred payment method is credit card accounting for 72.4 percent of PC and 68.1 percent of mobile shoppers. Next followed debit card and account transfer (both Internet and mobile banking service).
With the continuous growth of online shopping, electronic payment services via PC and mobile are increasing. The average number of usages a day exceeded 20 million and the amount of total payment reached $343.5 billion in 2016. Payment Gateway category like Samsung Pay and Naver Pay is attracting more users. On average 860,000 cases per day were paid by smart pay services in 2016 and the sales amount to $ 22.3 million.
Mobile e-commerce is the main driver of the explosive e-commerce growth. While online shopping grew by 20 percent in 2016, mobile e-commerce increased by 41.8 percent. Purchases from mobile platforms make up 53.5 percent of the total market value.
In 2017, the size of the online advertisement market is expected to be about USD 3.5 billion, up from USD 3.0 billion in 2015. As to each online advertising channel, personal computers (PCs) are showing a negative growth rate, -2.5 percent in 2016 and -1.8 percent in 2017. Mobile, however, grew by 6.1 percent in 2016, and is expected to grow by 4.6 percent in 2017. Online media use PC advertisements (59.4 percent) more than mobile advertisements (40.6 percent). Among online advertisement types, display advertisement takes up 48.7 percent and search ads 45.2 percent. Mobile advertisement sales increased to USD 883 million in 2015 and video ads on social media are driving the market. The market is expected to get close to the size of the land-based TV ads market in the near future.
Major Buying Holidays
Chu-seok (The 15th day of the 8th lunar month), Seollal (Lunar New Year’s Day), Parents’ day (May 8th) and Children’s day (May 5th) are major buying holidays in Korea. However, when purchasing from foreign online shopping sites, Koreans also follow foreign countries’ buying holidays, like Black Friday, to get the best deals.
43.1 percent of the Korean population use social media, according to a survey by Korea Information Society Development Institute. Kakao Story is the most widely-used social media (45.7 percent) followed by Facebook (30 percent).
Each age group uses different social media sites. Facebook is favored by teenagers and those in their 20’s, while Kakao Story is favored by those in their 30's and above.
The most popular items sourced from the U.S. are dietary supplements (27 percent), apparel (14 percent), and food products (12 percent). Cosmetics and electronics are sourced more from the E.U. and China than the U.S., according the Korea Customs Service.
CS Korea was not able to identify any trade shows focusing on electronic commerce. CS Korea does have an extensive list of Korean retail trade shows, which can be obtained upon request. However, most of these trade shows tend to be B2C instead of B2B.
Ministry of Trade, Industry and Energy (MOTIE) - http://www.motie.go.kr/language/eng/index.jsp
Ministry of Strategy and Finance (MOSF) - http://english.mosf.go.kr/
Korea Customs Service (KCS) -http://www.customs.go.kr/kcshome/site/index.do?layoutSiteId=english
Ms. Jinjoo Lee
Commercial Service Korea
U.S. Embassy Seoul
188 Sejong-daero, Jongro-gu
Seoul 03141, Korea
The U.S. Government’s primary trade promotion agency in South Korea is the U.S. Commercial Service. Located within the U.S. Embassy in Seoul, it is an agency of the U.S. Department of Commerce, International Trade Administration. Consult: http://www.export.gov/southkorea.
In Korea, the Commercial Service works with numerous trading and commercial entities, to include:
A geographically small country, Korea is an exciting place to launch effective, sophisticated, state-of-the-art advertising. Korean advertisers are highly creative and utilize a host of media to capture the consumer’s attention.
Particular aspects of Korea’s advertising market include the following:
o KBS I, KBS II: TV and radio stations owned/operated by the Korean government
o MBC, SBS: Independently operated, but with ROK government influence (Consult: www.kobaco.co.kr/eng)
o Launched on December 1, 2011, four new nationwide networks supplement existing conventional free-to-air TV networks like KBS, MBC, SBS, and other smaller channels. Unlike land-based television channels, new comprehensive programming channels can broadcast for 24 hours and commercial breaks are allowed. In Korea, over 80 percent of the population watches cable or satellite TV, so the influence of these comprehensive programming channels is strong.
o Channel A www.ichannela.com is managed by Dong-A Media Group. The Dong-A Media Group consists of twelve affiliate companies, including Dong-A Ilbo, the leading newspaper in Korea since 1920.
o TV Chosun http://www.tvchosun.com/main.html, also known as Chosun Broadcasting Company, is owned by the Chosun Ilbo-led consortium. Chosun Ilbo is one of the major newspapers in South Korea, with a daily circulation of over 2,200,000.
o JTBC http://jtbc.joins.com/ is managed by the JoongAng Media Network. JoongAng Ilbo is one of the major newspapers in South Korea.
o MBN www.mbn.co.kr, also known as Maeil Broadcasting, Inc., is owned by Maeil Business Newspaper. MBN was formerly a news channel, between 1993 and 2011. It transitioned to a general programming cable TV channel after 17 years of operation.
In Korea’s export-driven economy, price competitiveness is a key factor. Korean manufacturers try to purchase lower-priced raw materials or equipment, while also looking for quality.
Korean buyers generally consider that U.S. goods:
1. Denomination, use, ingredients, material quality, performance, size, price, capacity, permitted number of goods and contents of services
2. Name (including address and telephone number) of the enterprise that has manufactured, imported, sold or provided goods, etc., and the origin of the goods
3. Method of use, matters of caution and warning in use and keeping
4. Date of manufacture, quality guarantee period or, in case of goods such as foods, medicine etc., which are apt to be altered in the course of distribution, the validity period of such goods
5. Dimension, location and method of indication, and Organization (including its address and telephone number) and method of settlement for any complaint on goods etc., or any consumer’s damage due to goods, etc.
A 10 percent value-added tax (VAT) is included on services and products.
Commissions in Korea are dependent upon the type of product and the transaction amount. For larger contracts, commissions generally decline as the contract value for a major purchase/acquisition/contract increases.
Considered secondary to product and price considerations, after-sales service in Korea is often found lacking by foreign suppliers. After-sales service and customer support by Korea’s big conglomerates, such as Samsung and LG, are often seen as better than the services offered by global enterprises or international SMEs. Korean consumers are very demanding in terms of customer support. After sales service and customer service in general should be managed closely, especially given the competition of third countries in this market. Servicing is/should be an important component of the ‘sale.’
The best approaches for after-sales service and customer support include:
In any foreign market, companies should consider several general principles for effective management and protection of their intellectual property. For background on these principles, please link to the following articles: Protecting Intellectual Property and Corruption.
IP Attaché Contact (For Korea)
Please contact our office at firstname.lastname@example.org for your IPR issues.
CS Korea offers a fee-based service called the International Country Profile (ICP): http://export.gov/southkorea/servicesforuscompanies/icp/index.asp. The ICP includes the above information, obtained by the Commercial Service in Korea, in addition to a visit to the office of the Korean company, as well as obtaining financial information from D&B Korea Co., Ltd. (http://www.dnbasia.com/kr/english/sitemap/) and Kroll International (http://www.kroll.com/), both of which also provide due diligence reports.
Korea has a highly-developed economy with a full range of professional services:
Law firms: http://export.gov/southkorea/usefullinks/lawfirms/index.asp
Major banks: http://export.gov/southkorea/usefullinks/majoruskoreanbanks/index.asp
Major real estate and real estate consultancy firms, accounting companies and human resource firms: http://export.gov/southkorea/usefullinks/majorrealestateaccountinghrfirmsinkorea/index.asp
Major newspaper contacts: http://export.gov/southkorea/usefullinks/majornewspapersbusinessjournals/index.asp
The “Featured U.S. Exporters” (FUSE) site provides information on how you can advertise products on our worldwide website, in various languages, for a small fee. Click http://www.export.gov/fuse/ for more information.
For principal business associations in Korea, please see the link below:
With the signing of the U.S.-Korea Free Trade Agreement in 2012, in general, U.S. companies will not face formal limitations. However, there are special circumstances where formal or informal limitations may exist. For additional information, please contact a Commercial Specialist from the U.S. Commercial Service in Seoul: http://export.gov/southkorea/contactus/index.asp.
Busan Exhibition and Convention Center (BEXCO):
Agents or Distributors in Korea:
Banks in Korea:
Convention and Exhibition Center (COEX):
Daegu Exhibition and Convention Center (EXCO Daegu):
Defense Acquisition and Procurement Agency (DAPA):
Dun & Bradstreet Korea
Featured U.S. Exporters (FUSE)
Government e-Procurement Service (GePS):
International Company Profile:
KITA New York Office:
KITA Washington Office:
Korea Broadcast Advertising Corporation (KOBACO):
Korean Commercial Arbitration Board:
Korea Importer’s Association (KOIMA)
Korea Intellectual Property Office (KIPO):
Korea’s Main Distribution Centers:
Korea Trade Investment Promotion Agency (KOTRA):
Public Procurement Service (PPS):
Law Firms in Korea:
Newspaper Agencies in Korea:
Real Estate Firms, Accounting Corporations and Human Resource Agencies:
Seoul Trade Exhibition Center (SETEC)
World Federation of Direct Selling Associations
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