MOTIE to Boost Cross-Border Direct Sales for K-Consumer Goods Exports... 47.1 Billion Won Per Year to Support Retailers' Overseas Expansion

Eight Retailers and Five Online Firms to Be Selected Each Year for Three Years
Joint Entry into Overseas Retail Hubs and Support for Platform Localization

Yonhap News

The Ministry of Trade, Industry and Energy announced on February 10 that it will implement the “Support Program for Overseas Expansion of Retail Companies” over the next three years starting this year, in order to strengthen the competitiveness of the retail industry and expand exports of K-consumer goods such as cross-border direct sales.

The ministry plans to inject 47.1 billion won in state funds every year to support small and medium-sized, as well as mid-sized, consumer goods companies so they can enter overseas markets together with domestic retail companies, focusing on overseas retail hubs. It also plans to foster cross-border direct sales as a new export growth engine by capitalizing on the spread of the Korean Wave and the activation of online transactions.

Currently, domestic retail companies face heavy initial investment costs and operational burdens in the process of overseas expansion, and online retail systems that can meet overseas consumers’ demand for cross-border direct purchases have not been sufficiently established. Although overseas demand for K-consumer goods has been steadily increasing, accessibility for overseas consumers remains low. Individual small and medium-sized, as well as mid-sized, consumer goods companies are also reported to be struggling to enter overseas markets on their own due to the costs and procedural burdens that arise throughout the entire export process, including customs clearance, certification, and logistics.

Accordingly, from this year for three years, the ministry will select eight retail companies and five companies related to online cross-border direct sales each year, and provide comprehensive, customized support across the entire process, including local market research, marketing, and logistics support. In particular, it plans to build a mutually beneficial structure between retail companies and manufacturing companies by encouraging joint overseas expansion with small and medium-sized, as well as mid-sized, consumer goods companies during the overseas expansion of retail firms, and to pursue “win-win” growth through mutual synergy.

The growth trend of the cross-border direct sales market is also a major background for this program. The size of domestic cross-border direct sales increased 143% in four years, from 1.19 billion dollars in 2020 to 2.9 billion dollars in 2024. Reflecting this trend, the ministry plans to strengthen support for the localization of domestic cross-border direct sales platforms and nurture them into global online malls with high accessibility for overseas consumers, thereby diversifying overseas sales channels for K-consumer goods.

The ministry expects that this program will promote the joint growth of K-consumer goods manufacturers and retail companies, and help secure new retail channels for expanding exports. In addition, it plans to review the program’s performance every year and reflect the results in institutional improvements and support methods to enhance policy effectiveness.

Companies wishing to participate can apply through the Korea Trade-Investment Promotion Agency (KOTRA) website by the 25th of this month.

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