"One in Five Companies Sees Export Growth After COVID-19...Focusing on Local Sales and New Products"

Sangui's 'Export Changes Before and After the COVID-19 Crisis'
"Past Methods Like Joint Entry with Parent Companies
Are Hard to Work in Export Markets

Diversify Advanced High-Tech Export Items
Public-Private One Team Must Pioneer Small Markets"

After the global economy was hit by the Korosa crisis, companies that saw an increase in exports were those that actively engaged in overseas sales and proactively ventured into developing new export products.

The Korea Chamber of Commerce and Industry conducted a survey on changes in exports before and after the COVID-19 crisis targeting 1,222 export manufacturing companies nationwide. One in five respondent companies (20.2%) reported that the volume of some export items increased when comparing export performance between 2019, before the COVID-19 crisis, and the first half of this year. Companies that answered “there are items with decreased export volume” accounted for 36.3%, while 43.5% said there was “no change.”

In April 2021, the HMM 16,000 TEU container ship sets sail fully loaded for Europe.
[Photo by HMM]

Proactive Local Marketing Effective... US Export Items Increased the Most

Companies cited “active overseas sales activities” (34.0%, multiple responses allowed) as the most common reason for increased exports. This indicates that proactive marketing was effective during the restructuring of the export market caused by COVID-19. This was followed by “increased volume from existing clients” (28.0%), “development of new export products” (27.8%), “securing high-tech superiority” (25.8%), “securing price competitiveness through unit price reduction” (18.9%), and “overseas expansion of domestic clients” (7.3%).

The largest increase in export volume before and after COVID-19 was seen in items exported to the United States (29.0%). This was followed by China (20.3%), ASEAN (19.4%), the EU (12.3%), and Japan (11.6%).

The Korea Chamber of Commerce and Industry stated, “Despite deteriorating trade conditions such as geopolitical risks and minimal effects from China’s reopening, export companies that strengthened local marketing and sales activities and prominently featured new and high-tech products achieved good results.” They added, “Traditional export methods such as competing on intermediate goods’ unit prices or joint entry with parent companies are becoming less effective in the export market.”

"Quality Standardization and Declining Price Competitiveness... Must Compete with Localized Sales and Innovative Products"

Among companies that reported decreased export items, 64.1% cited “decreased volume from existing clients” as the reason. This was followed by “losing out to competitors on price” (24.0%), “policies and regulations of export countries” (14.4%), “circumstances of local clients such as closures or relocations” (11.1%), and “replacement by local production” (9.2%) as factors for export decline.

The country with the highest number of items with decreased exports was China (39.4%). This was followed by the United States (21.0%), ASEAN (15.2%), Japan (14.3%), and the EU (14.1%).

Hyunsoo Kim, head of the Economic Policy Team at the Korea Chamber of Commerce and Industry, said, “To counter competitors’ low-price offensives, domestic product preference trends, and protectionism, export strategies must be drastically changed.”

Kim added, “We need to diversify export destinations, which have been concentrated in a few countries, and diversify export items from intermediate goods to consumer goods and advanced high-tech products that are difficult to replace with imports. Now, efforts are needed for both the private and public sectors to jointly pioneer even small export markets with customized approaches.”

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