Friday, May 25, 2012

High costs drive Korean SMEs to Malaysia

Source From (Business Times): http://www.btimes.com.my/Current_News/BTIMES/articles/pnchy/Article/

Published: on 25 May 2012

KUALA LUMPUR: The high cost of doing business in South Korea has prompted many of its small and medium size entrepreneurs (SMEs) to move to Malaysia to tap into the growth of the Southeast Asian market.

To date, there are more than 5,000 South Korean SMEs operating in the country, particularly in electrical and electronics goods, fashion and cosmetics and other consumer products.

The "Malaysia My Second Home" programme, and the lower cost of living here, has attracted some 25,000 South Koreans to reside in the country.

"Malaysia is also seen as a platform to tap into the growth in China and India. This presents a lot of opportunities to South Korean SMEs," said regional director of Gyeonggi Business Centre, Southeast Asia, Patrick On recently.

In identifying niche opportunities, the South Korean government also provides incentives to companies that want to venture into the halal market.


"With the Malaysian halal certificate being recognised in most markets and the country's close relations with the OIC (Organisation of Islamic Cooperation) countries, these South Korean SMEs are more drawn to set-up companies here," he said.

In addition, with the popularity of the K Pop or the Korean music culture in Malaysia there has been an increase in demand for Korean fashion, cosmetics and food, among others.
 
 
 On expressed his hope that the Ministry of International Trade and Industry will be more aggressive in encouraging South Korean companies to set up base here by providing tax incentives.

Currently, South Korea ranked number seven as an import source to Malaysia, while Malaysia accounted for 5.4 per cent or US$10 billion (RM31 billion) of South Korea's total exports.

The Gyeonggi Business Centre Kuala Lumpur (GBC KL) is the Southeast Asia business hub, representing the Gyeonggi provincial government, assisting South Korean SMEs to penetrate the Southeast Asian market via promotion of regular trade missions with local buyers and host specialised trade meets with respective local industries.

Through business collaborations with the Korean Gyeonggi provincial government, GBC KL is able to provide a huge sourcing database of about 3,000 South Korean SMEs seeking marketing partners in the region.

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