Trade plays a major role in South Korea’s economic growth. Although the U.S. and China have predominately been South Korea’s key trading partners, in the year ahead South Korean businesses including small and medium-sized enterprises (SMEs) should explore the encouraging prospects within the Asia-Pacific region. The growth outlook for Asia-Pacific remains strong with the region expected to lead global growth at 5.4 percent in 2018.
Intra-regional trade offers promising opportunities including the ASEAN market, which is the world’s third most populous market with more than 630 million people. The ASEAN – South Korea Free Trade Area signed in 2005 can benefit SMEs as it offers preferential trade arrangement for goods through reduced tariffs and duty-free treatment.
Vietnam is a market that is worth highlighting, because it shows promising potential for SMEs. It is one of the fastest growing economies in Asia with a population of over 95 million. Agriculture plays a major part in the economy, but there is a continual shift towards manufacturing and services. Vietnam’s domestic market is attractive for several reasons: a fast-growing middle class, a large workforce of approximately 54 million people, and an estimated 60% of the population under the age of 35. These factors are paving the way for growing consumer demands and consumption of goods, which offers significant export and import potential for small businesses. SMEs can explore the opportunities presented by South Korea and Vietnam Free Trade Agreement signed in 2015, which covers a range of preferential treatment including reduced tariffs for exports and imports.
E-commerce is booming in Vietnam and growing at 35% annually, 2.5 times higher than Japan. This e-commerce growth has also triggered the demand for cross-border e-commerce with up to 33 percent of customers have also purchased from overseas markets.This opens up many possibilities for South Korean SMEs who can tap this growing trend and sell goods through e-commerce. A key element to building a successful e-commerce business is getting the right logistic support. Finding a reliable logistics provider with access to a logistics network can help SMEs’ ship seamlessly to international locations and achieve profitable and scalable growth.
At FedEx, we understand that SMEs need a provider that can offer flexibility, speed, and the ability to adapt and anticipate having the right product in the right place at the right time. FedEx offers a range of shipping solutions to match SMEs’ requirements along with digital tools that simplify shipping processes from generating shipping labels to preparing paperwork for Customs. We understand that managing returns is an important part of e-commerce, and we offer a global returns solution that helps SMEs manage their customers’ return experience. We have also expanded our delivery options so that consumers have greater convenience by allowing them to customize their delivery location and time.
With many promising trade prospects in the Asia-Pacific region, there has never been a better time for SMEs to grow their business.