Advice for Success in Global Expansion
Jae-Hyeong Lee Since the global market is unfamiliar and unpredictable, startups thinking about global expansion will have many things to consider. We’d appreciate your insights on what to prioritize based on your experience with global expansion.
Saet-Byeol Park Analyzing the market you want to enter is a fundamental step. A product that’s popular in one country might not succeed in another. Just as Korea, China, and Japan have different cultures, countries like Indonesia, Thailand, and Myanmar have their own unique culture. A different strategy must be developed for each country.
Jae-Hyeong Lee What about taking a simpler approach to accessing the global market? Would using a global commerce platform to sell the products overseas be sufficient, without needing to establish a local entity?
Yun-Jeong Park Of course, that’s a good way to test the marketability in advance. However, for the continuous scale-up of a startup, it’s inevitable to establish a local entity. Even in a country like Indonesia, where there is active investment in startups, the target is mainly local entity companies, not foreign companies. In many cases, local ownership is required for incorporation, so it’s recommended to work with a trusted local partner from the beginning.
Saet-Byeol Park The Southeast Asian market is diverse, with each country having its own specific process for incorporation. Given the limited time and resources, managing all these processes alone can be challenging for a startup. In case setting up a local entity is unavailable right away, it’s beneficial to cooperate closely with partner companies to secure the market, and then establish a local entity as the market expands.
Jae-Hyeong Lee Many startups have been making attempts to enter the global market, and some are now starting to show some positive outcomes. How would you assess the overall performance of Korean startups in the overseas market?
Min-Gyu Lee In Hong Kong’s downtown Tsim Sha Tsui, Korean brands have a strong influence. Especially Korean chicken brand stores are so popular that people are waiting in line for more than an hour to get in. Chinese companies are also creating and promoting similar Korean food. It is highly competitive.
Saet-Byeol Park The K-beauty market has a similar trend. Four to five years ago, large companies dominated the market. However, in the past two or three years, independent brands such as Beauty of Josun and Huxley have grown rapidly. The 2024 Beauty & Healthcare Show, taking place in Incheon, will feature mostly independent brands in the beauty category.
Jae-Hyeong Lee As pointed out, the results of Korean startups entering the global market are becoming noteworthy and are being shown in different ways. There has been a growing number of consumers searching for small brands, which indicates that there are more chances for niche markets. We should also talk about the reasons behind these accomplishments. I wonder whether the market’s needs and supply just happened to fit together or if startups have carefully and strategically pursued overseas expansion.
Min-Gyu Lee I believe that both factors were essential. Korean content, like K-pop and dramas, has gained remarkable popularity. There has been an increase in the global consumption of Korean culture. Startups can address those needs. They are focused on resolving the issues we are facing. That’s why startups show more apparent accomplishments in global expansion.
Yun-Jeong Park Large companies have longer decision-making processes and procedures, so it’s difficult for them to keep up with trends. Startups, on the other hand, can execute something quickly if the reason for action is reasonable and there are enough ideas.
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