Korean Export Companies Seek Entry into US and Europe Post-COVID-19... "1-2 Years Needed for COVID Recovery"

KCCI Announces Survey Results of 300 Domestic Export Companies
58% of Companies "Preparing to Diversify Overseas Expansion Strategies"
Preferred Regions: Americas, Southeast Asia, Europe, China
Most Expect Recovery Within 1 Year (45%) Amid COVID-19... 2 Years (36%), 3 Years (10%), 6 Months (8%)

[Asia Economy Reporter Hwang Yoon-joo] As the impact of COVID-19 has continued for over a year and a half, a significant number of domestic export companies have been revising their existing overseas expansion strategies and seeking diversification in target regions, indicating new preparations across their overseas operations. This appears to be the movement of Korean companies amid the post-COVID GVC restructuring process. Additionally, 8 out of 10 domestic export companies expected the recovery period from COVID-19 to be within 1 to 2 years.

According to a recent survey conducted by the Korea Chamber of Commerce and Industry targeting 300 export companies (including overseas-invested companies) titled 'Post-COVID Overseas Expansion Trends and Response Tasks of Companies,' 58.3% of export companies answered that they are "seeking diversification in overseas expansion strategies in preparation for the post-COVID era." When asked about the primary strategies being considered, responses were in the order of regional diversification (54.9%), non-face-to-face management methods (42.9%), diversification of marketing methods (32.6%), and product diversification (29.1%).

Preferred Expansion Regions: Americas, Southeast Asia, Europe, China... 'Geographical Convenience' Concept Changes Due to Inter-country Movement Restrictions

When asked about the top priority regions for expansion, responses were 'Americas' (34.7%), 'Southeast Asia' (28.6%), 'Europe' (17.7%), and 'China' (10.2%) in that order. These survey results indicate that the main countries of interest for domestic companies are shifting from the Asian region to the United States and Europe.

A representative from the Korea Chamber of Commerce and Industry explained, "As inter-country travel has become difficult post-COVID, the geographical convenience of China and Southeast Asia has diminished. On the other hand, with increased experience in non-face-to-face business operations, interest in relatively distant advanced markets such as the Americas and Europe seems to have risen."

When asked about South Korea's external competitiveness compared to before the COVID-19 pandemic, 27% of respondent companies answered 'improved,' while 53% said 'unchanged.' The increased confidence of Korean companies amid the COVID situation is also interpreted as supporting the trend toward diversification of overseas expansion regions.

5 out of 10 Companies Reduced or Postponed Overseas Expansion Due to COVID... Long Road to Normalization but Expecting Recovery

Meanwhile, when asked about the current status of overseas expansion of Korean companies during the COVID era, half of the companies responded that they had 'reduced' (43.0%) or 'postponed' (9.3%) their overseas expansion. Regarding the expected recovery period from COVID, 44.7% answered 'within 1 year,' and 35.7% answered 'within 2 years,' indicating that there is still a long way to go before normalization to pre-COVID levels.

For smooth overseas expansion, the support policy most expected from the Korean government was 'financial support' (35.5%). This was followed by 'entry and exit privileges such as quarantine exemptions' (34.0%), 'accurate and prompt provision of local information' (29.8%), and 'priority vaccination' (19.3%). The analysis suggests that restricted mobility and difficulties in collecting local information are acting as barriers to overseas expansion.

This content was produced with the assistance of AI translation services.