International Enterprise (IE) Singapore has signed a Memorandum of Understanding (MOU) with the Gyeonggi Provincial Government of South Korea today, in line with the agency’s approach to engage governments more deeply at the provincial/city level. IE Singapore is the government agency that promotes international trade and partners Singapore companies to go global.
Comprising 31 cities, Gyeonggi (the province surrounding Seoul), is Korea’s centre of high-tech industries and hosts many world-class companies including Hyundai, Samsung, and SK Group. In 2016, its GDP of S$393 billion and international trade amount of S$271 billion topped all provinces in South Korea.
There are opportunities for Singapore companies to offer their services in partnership with Korean companies to bring Korean brands to ASEAN, capitalising on their existing distribution networks.
This MOU is expected to boost collaboration in technology start-ups, wholesale distribution and logistics. As part of the MOU, IE Singapore and the Gyeonggi Provincial Government will organise business missions, business matching and facilitate Singapore and Gyeonggi-based companies to partner in these areas.
Witnessed by Senior Minister of State for Trade & Industry and National Development Dr. Koh Poh Koon and Gyeonggi Governor, Mr. Nam Kyung-Pil, the MOU was signed by IE Singapore’s Assistant CEO Mr. Tan Soon Kim and Gyeonggi’s Director-General of International Cooperation Dr. Cho Jung-Ah.
Mr. Tan Soon Kim, IE Singapore’s Assistant CEO, said, “This MOU provides a framework for us to engage the Gyeonggi government and facilitate collaboration between our companies. Beyond looking at South Korea as a market, our companies could explore partnerships with their Korean counterparts to jointly access third countries by leveraging each other’s strengths in areas such as technology and distribution network.”
Helping Korean SMEs expand into south-east Asia
There are over 761,000 SMEs in Gyeonggi, including those in consumer products such as beauty, health supplements and textile. Singapore companies in the trading, logistics and e-commerce sectors can provide their services, source for products and services from this large pool of SMEs and enter new markets together with Korean companies.
Many of these Korean SMEs want to expand overseas, especially to tap into the growing consumer market in Southeast Asia. But they may not have the necessary connections in this region, especially in marketing,
distribution and logistics fulfilment.
With strong business networks in Southeast Asia, Singapore wholesale trade companies can collaborate with South Korean companies to jointly distribute their consumer products in the region, further reinforcing Singapore as a trade hub.
IE Singapore has been facilitating tie-ups between South Korean brands and Singapore companies. An example is Luxasia, who is working with South Korean company Clio Cosmetics and entered the Indonesia and the Philippines markets.
Besides wholesale distribution, there is a growing demand for cross-border fulfilment services as South Korean companies look beyond their domestic market to capture the growing e-commerce market. The Asia Pacific e-commerce market is expected to grow Singapore’s strong logistics networks in the region meet the needs of such players.
For example, IE Singapore connected Singpost to Interfashion Planning, South Korea lifestyle and fashion company, to partner them in logistics and marketing to consumers in Southeast Asia.
Singpost is also working with Café 24, another Korean e-commerce business, to provide logistics services for their products in Hong Kong, Taiwan and other markets.
Partnering Korean start-ups
The Korea start-up market has grown significantly since the government introduced the Creative Economy initiatives in 2013. From 2015 to 2016, investments in start-ups increased by 49% in number, and 23% in size, due to government support. Most of the start-ups are in Information and communications technology (ICT) services, ecommerce and healthcare, including e-commerce platform Coupang, and mobile platform operator Yellow Mobile, both of which are part of the Global Unicorn Club.
The MOU will facilitate the entry of Singapore technology start-ups in Gyeonggi and help them access its ecosystem, including co-working spaces, incubators and in-market immersion programmes to help our start-ups gain deeper understanding into the technology scene in South Korea and meet with potential partners.