Have you ever thought of starting an import-export business in or with Korea but don’t know how to do it? Therefore, the following article will give you answer to questions such as what would be the steps and procedures, how to be successful doing the export-import business in Korea, what are profitable import-export products and ideas, as well as the Korean business culture.

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Overview about Korea

Korea is the 4th largest economy in Asia and the 10th largest globally with a GDP of $1.8 trillion and a per capita income of 34.865 USD. Korea is one of the developed countries in Asia with a long-standing culture with Confucian roots. This country is famous for its film, and music, which fascinates many young generations. Korea is an ideal destination for international students, workers, and business people.

The rapid development of the local economy in the past 30 years was driven largely by the development of the modern transport and transport infrastructure systems: roads, bridges, and ship networks. Seoul’s subway ranks 8th among the countries with the subway system. Also due to the developments and investments into the Korean key industries such as electronics, car industry, semiconductors, telecommunications, and other advanced industries. Before China came on the radar, then Korea was one of the main manufacturing powerhouses in Asia.

Advantages and disadvantages of doing business with and in Korea

Advantages of doing business in Korea

Korea has a favorable business environment, not only for import and export. In the past, Korea rose from one of the poorest countries in Asia to become an Asian dragon with a strong economy. These advantages are reflected in the following characteristics:

Korea has a high scientific and technological development level

Korea ranks first among 152 developed countries in ICT. Developed industries such as machinery manufacturing, electronics, chemicals, shipbuilding technology, and automobiles, South Korea is at the top of the world. With more than 20 million households with Internet access and most families use science and technology. Korea can provide the best hi-tech products for you to import.

The high income per capita 

Korea is one of the countries with highly appreciated education systems, which contributes to the development of an advanced economy with high-income jobs. This results that the average annual income of Koreans is over $ 30,000, which shows that they can afford to pay for high-quality items.

Import demand in Korea is very high

Korea is very dependent on the imports of agricultural and aquatic products. Korea itself does not have enough arable land and it is basically an island country. Basic agricultural products are and will be always one of the main import items of Korea. Additionally, Korea lacks the main natural and energy resources, and also rare metals and chemicals.

Furthermore, since Korea is expensive for primary and energy-intense manufacturing, like garments, clothes, and basic chemicals, then also these kinds of products are in great demand in Korea.

Disadvantages of doing business in Korea

Korea has no significant natural and energy resources, it has less arable land, and labor prices are skyrocketing. In general, Korea has many favorable conditions to boost the economy and import and export businesses for high-tech products. However, there are also many difficulties for businesses.

Quality and price issues

It is difficult for Korean importers to find overseas partners capable of producing products that meet Korean standards required for imports, as for food products. There are very high standards and requirements for food hygiene and safety; deep processing).

Korean people prefer their products

One thing to note is that Koreans are loyal of the products produced in their country. If you want to compete with domestic goods, this is not a good idea. Because no matter how good your product is, Korean people still prefer to use their products. However, you can also have many ways to promote products or promote import and export through many forms or supply raw materials to Korea. There will still have people who want to try foreign brands of products.

The second approach would be to supply something unique to Koreans, which they do not have locally. For example, Euoropean Saunas and wooden houses has been found their places on the Korean market.

What does Korea export?

2018 was the first year Korea exported over $600 billion to other countries, which made Korea become the sixth-largest exporter in the world. Korea’s exports recorded a record high in 2018 thanks to sales of memory chips and petrochemical products. However, in 2021 Korean export exceeded already $640 billion. Below are the main industries and products that Korea exports. As you can see, Korea exports mostly high-end products.

Semiconductors

Semiconductors and chips are Korea’s major export items, accounting for nearly 25% of Korea’s total exports. The world’s largest memory chips manufacturing group is Samsung Electronics in Korea.

The global semiconductor market will grow thanks to the introduction of 5G network communication services. The demand for personal computers and the development of new industries are increasing. Additionally, the fastly-developing industries like electrical cars, robotics, solar, wind, and other renewable energy fields need semiconductors and chips as well.

Automobile

Korean cars gradually grasp high technology. Today, Korea ranks fifth global in automobile manufacturing and holds the sixth position in exports, creating more than 10% of jobs and paying the most taxes. Hyundai, Kia, and Daewoo are Korea’s leading automobile groups.

Korea’s car export turnover in 2019 reached $ 17.9 billion, exported 123,022 cars in February 2020, in the context of the world market demand for multipurpose sports cars (SUVs). Korean automakers are also developing and advancing in the electric cars segment.

Steel

Korea’s exports of steel in the first nine months of 2018 reached 330,000 tons. China is the largest steel import partner, accounting for 20.4% of total exports of Korea. As for steel rods, Korea exported 515,000 tons of steel bars in 2018. Taiwan is Korea’s largest export market for steel rods. POSCO of Korea is the third largest steel manufacturer in the world.

Korean standard steel products, together with Japanese steel are also widely accepted in Europe. On the Same time, Chinese standard steel is often not preferred.

Ships and vessels

Korea’s shipbuilding industry has reached an export value of 36.1 billion USD. Ships and related items/products have become the most exported items (in money value), surpassing even semiconductors. Besides the price of petroleum and energy products has increased sharply, and had affected the Korean Shipbuilding industry’s competitiveness, Korea is and will remain one of the main shipbuilding hubs in asia. Most of the newbuild ships and re-build projects are being done in Chinese and Korean shipyards and docs.

The three largest Korean shipbuilding companies are: Korea Shipbuilding & Offshore Engineering Co. (KSOE), Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co.

Electronics and information technology products

The three main product groups of the Korean electronics industry are semiconductors, display boards, and mobile phones, including finished products, parts, and components. Exports of these three items account for more than two-thirds of Korea’s total information technology (IT) exports each year.

The main export markets include China, the United States, and Japan, Europe of which China accounts for about 50%.

Their leading electronics corporations are Samsung, LG, and Hyundai.

What does Korea import?

Korea is a high-income economy. In addition to commodities such as mineral fuels, like crude oil, natural gas, coal, and ores, Korea also imports many other goods are: machinery, electronics, and equipment electronics, steel, transport equipment, organic chemicals, plastics, vehicles, electronic components, medical devices. Korea imports products that it itself lacks of or which are too expensive to manufacture locally (low-end products and raw materials).

Crude oil

Korea is the fifth-largest crude oil importer, with crude oil imports in Korea reaching 35.33 million tons (2.83 million barrels per day) in the first quarter of 2020. Korea crude oil import turnover from Saudi Arabia in 2019 is 3.4 million tons (804,304 barrels/day), imported from the US reached 1.68 million tons (397,951 barrels/day).

Fuel, coal, gas

Korea is heavily dependent on importing fossil fuels to meet domestic energy needs. Korea is the fourth largest coal importer. This country is encouraging companies to increase purchasing energy sources from the US, importing about 86.5 million tons of coal from the USA, accounting for 1.2% of the nation’s total coal import. Korea’s import of liquefied gas is the second largest in the world.

Agricultural products

Korea is a big market for agricultural products with tens of billions of dollars each year. Specifically, in 2018, Korea imported $ 35.2 billion of agricultural, forestry, and aquatic products. Imports of vegetables and fruits were $ 8.44 billion, seafood of $ 5.045 billion, and forestry products of US $ 3,825 billion. Potential goods such as coffee, chili, garlic, rice, shrimp, frozen fish, cabbage, kohlrabi, and tomato.

With these kinds of products, neighboring ASEAN countries have huge export potential to Korea. Vietnam, Thailand, Cambodia, Philippines are all in a good position to export agricultural products to Korea.

How to export goods to Korea

Step 1: Create the export business plan

Before you start doing something, make sure you have a clear plan for your export import business. Before you conclude the plan, it is important to conclude the market research.

The plan’s main contents should: be selecting the appropriate export products, the timeframe of set up, location, budget and financials, marketing and sales strategy, your competitive edge and weaknesses ( SWOT analysis) , and other necessary content.

After you have put together your plan, then we recommend giving the plan to experts for review and analysis, so they can help you check and evaluate the details and perhaps find mistakes or give new ideas. Remember, you cannot memorize everything, so if possible, write down all ideas.

Step 2: Select the suppliers and products for export

In this step, you find and select reliable and competitive suppliers with whom you can start cooperation, either as an agent or direct merchant. To do this, you need to conduct a market survey and have clear answers to the questions: What should be the product price range?, What should be the quality level? Packing and visual looking? To get this information, we suggest attending local fairs and exhibitions. There you can collect information from both sides: Suppliers and customers.

Most important is to collect the market information from the customer side to make sure all the requirements customers might have. Based on this, you can specialize ( take your niche) and select the most suitable manufacturers/suppliers which can provide the products meeting the commercial and technical requirements of the Korean customers.

Although Korea has high requirements for product quality, Korean people prefer a variety of products, and they can afford to pay if they want to try new products.

  • Most industrial products such as plastic products, bicycles, and spare parts, textiles, footwear, cables, toys, interior, and exterior goods must be followed by the Korean Safety Inspection and Quality Control Law when exporting to Korea.
  • Before exporting to the Korean market, the product must have a safety certification by Korean inspection agencies.

Step 3: Proceed with the export marketing

To find customers who will finally choose your products, you need to do the targeted marketing and sales. Your marketing and sales activities depend on your customers and the channels they are using ( you should deliver the marketing messages in their channels). For marketing, you have online and offline channels and methods available.

you can post a few product introduction articles in the chosen media channels, forums, groups, social media, and specialized applications, with content that shows the honesty of your products but make it easy to see and impress the customers who want to buy from you. 

You can also reach out to Korean dealers who are looking to distribute your products. In this case, you can send an email about the product’s technical and commercial information so that the dealers can decide whether to sign a contract or not. 

To do efficient marketing, experience and knowledge is required. We recommend to first taking some time and learning about what kind of options you have available and how to do effective marketing.  

Read more: How to get export orders abroad 

Step 4: Sign the export contracts and receive the deposit

After negotiating and receiving orders, It’s time to sign a commercial contract to firm your exports will go smoothly and reach the agreements.

Korean people are thorough, clear, and require high professionalism, so when negotiating a contract, you must show your professionalism, avoiding unnecessary mistakes such as time lag, spelling mistakes, etc. Also, check your bank account when customers make a deposit.

Most Koreans have a high level of education, so there are not often cases of fraud. However, you still have to be careful with each partner, and should not judge by the impression they make.

Step 5: Pack the products, prepare the delivery terms and related documents

Korea has its own requirements for packing products. You must pay attention to the labeling requirements that are specific to each product. Exported products should label in Korean and indicate the origin of the goods.

The main content of goods labels must include:

Country of manufacture: Name and address of manufacturer and importer; Product’s name; Manufacturing date and product batch; Amount; Number of units; Preservation method; Composition of substances.

After you complete the packing step, you need to prepare for the delivery

Depending on, how you have agreed with your customer, you should supply and deliver the goods accordingly.

– Shipping by air: Unlimited. Applicable to urgent orders or small quantities from a few kilograms to several hundred kilograms.

– Shipping by sea: The volume of goods is unlimited. But usually applicable to non-rush orders, large volumes from 1cbm (cubic meters) to container cargo.

Step 6: Buy insurance

Export services have available insurance. If you do not use an export service, you need to buy shipping insurance to prevent transport problems. Normally every international freight company such as DHL, UPS, TNT, DSV, FEDEX, etc all of them can also give you insurance. Normally the insurance amount is just 0,2-0,5% of the value of the goods. If you don’t want to pay 100% compensation if things happen, it’s best to go through insurance to secure the deal.

Step 7: Custom procedures and track the delivery

The exporter is required to do the export procedures in his home country’s customs. The exporter can authorize the transport company or freight forwarder or also a custom agent to do this for him. We recommend letting international transport companies, such as DHL, TNT, and DSV to do this for you. The cost for export declaration and procedures via them will cost you a few hundred bucks.

Export customs is always much easier than import procedures.

To proceed with the import procedures, it is normally the importer’s duty (your customers), unless the export hasn’t been agreed according to the DDP incoterm.

The customs procedure if imported into Korean is as follows (simplified):

  • The declarant shall fill in the form by customs declaration form by electronic means.
  • After completing the declaration, from the declarant. The officer will transmit to the system for automatic processing.
  • The system processes information on the customs declaration according to regulations, automatically dividing the declaration according to predefined criteria.
  • After the declaration has been processed, then the import duties and taxes values are being determined.
  • The importer shall pay the import duties and taxes and after that, he/she is allowed to bring the goods to the Korean market.

Currently, 100% of import and export goods in Korea are cleared electronically, based on the risk management criteria available online. If customs officers check the information on the declaration, if there is not enough or must change, they will notify the agent or enterprise of additions or amendments.

How to import goods from Korea

Step 1: Identify the products to import

In general, Korean goods are quite suitable for the needs and tastes of both Asians and Europeans. Korean commodity is diverse. Although it may be higher in price than goods from China or Thailand, it is more appreciated for the quality and bring high trust to consumers.

To select the goods you want to import, you need to determine your business needs. You can come directly to the workshop or store to check whether the product meets your requirements or not.

If you can’t come to Korea, you can send an email to the stores to search for the information.In some case you can ask to get the samples first.

The items you can import from Korea for your business are electronics, computers, phones, components, clothes, fabrics, cosmetics, food.

Step 2: Find the source of suppliers

After determining the products you want to import, the next step is to find partners and supplies.

Korean people have a high reputation, so partnering with Koreans is an advantage for your import business. They not only give you professional reliability but also excellent import business strategies.

There are many ways for you to reach suppliers. You can post on the websites that you are looking for the products or receive recommendations from people in the same business field. When choosing partners and suppliers, you should find partners compatible in ideas and business perspectives. Alibaba can be also used to search for reliable Korean manufacturers.

Step 3: Check the samples before ordering goods

To make sure the product meets your requirements, you can send a request to try the samples. When the partner or supplier accepts your requests you can continue with the next steps.

Step 4: Sign an international sales/purchase agreement

After you have made sure the products meet your requirements and the price is acceptable, then it is time to agree to all the terms and prepare international sales and purchase agreement with your supplier. In the ordering contract, all the relevant terms and conditions shall be agreed upon: Product quality and how to check it, packing way, price, warranty, inspections, payment terms, delivery terms, delivery time, and penalties.

Step 5: make payments

After the contract has been properly signed, then it is time to proceed with the advance payment to your supplier, acc to the contract. We recommend paying advance no more than 30%, and the rest after goods are ready for delivery and inspected. For advance payment, we would also recommend having insurance. You can either use Alibaba payment or Paypal payments, as with these providers, you can ask a refund if the supplier does not deliver the goods.

Step 6: Track the shipment and receive the goods

After reaching the sales agreement, and payment has been made, then the delivery party will send the goods to you. What you do is track the shipping process and take delivery at the meeting place.

You may have to pay import duty charges depending on your country’s regulations. After importing the goods, please check the quantity, quality, and requirements as agreed upon or not. If the goods are defective in transit, you need to contact the allergist as soon as possible to refund the goods.

For further reading: Read import-export procedures and documentation and read also the biggest risks in the export-import business and how to manage them.

How to import goods from Korea for small business

If your business is still small, does not have much capital, or you want to get a certain amount of orders to sell, here are some ways you can apply to get goods quickly and effectively:

Get Korean goods portable from relatives or friends living in Korea:

When taking goods in this way, you can import goods to sell or receive orders from customers, and then start by friends and relatives who live in Korea to transfer by the post office or portable. This way of importing can help minimize the risks.

Buy duty-free goods at the airport or at the duty-free shops

Large and small duty-free shops gathered at the airport dealing in many different products and goods such as clothing, ginseng, electronic goods, etc.

You must bring your passport and provide departure information to purchase duty-free goods, including departure dates as well as the airport and flight number. Your total purchase bill must be more than 30,000 Won, and less than 200,000 won ($ 25- $ 150).

If you make a refund at the airport now, you need to arrive 5 hours before departure to complete the tax refund.

You can pay at Korean supermarkets, shopping stores in Korean currency, Japanese currency, US dollars, or credit cards (visa, master …)

Get goods directly from Korean stores, and wholesale agents:

Going directly to Korea to find and source goods can help you get reputable and quality goods at the best prices. However, you have to spend a lot of money on travel, and accommodation. In Korea, there are many factories, big shops, agents of big brands along with shopping centers and markets where you can find the goods you want.

Become a distribution agent:

With many items from Korea, you can choose to do business by becoming a distributor or taking goods directly from major brands to get the best wholesale prices and get support, advice on Korean commodity business experience. However, in this way, you can only represent the certain brand, meaning that you only sell products of that brand (sometimes the capital is very high).

Get goods from online shopping websites in Korea:

There are many famous websites that you can choose to find goods in Korea. If you want to take a variety of goods, you can visit some popular Korean e-commerce websites:

1. Gmarket: is one of Korea’s leading e-commerce websites. You can buy the most popular Korean goods from health, beauty, sports, family, etc.

2. Koreanmall is also Korea’s largest online shopping site. This website does not focus on domestic distribution but specializes in distributing and selling to the International market.

3. Yesstyle: is an online sales channel for Korean cosmetic and fashion products.

4. Danawa: is an online sales website that specializes in electronics products. 

There are also: 11Street, Last Save, Auction or Interpark e-commerce websites, etc.

Additional reading: How to import products from China

What are the most profitable goods to import from Korea for small businesses?

There are many types of goods in Korea.  You can import unique and reputation goods in Korea. If you do not know what goods to get from Korea, here are some ideas for your business:

Electronic components and Korean household appliances:

Korea has many famous electronic technology brands such as Samsung or LG, so you can be assured of the quality of items when choosing to do business. Korean electronics items are currently quite diverse and rich with everything like phones, laptops, cameras, tablets, camcorders, smartwatches, virtual reality glasses. Etc

Cosmetics:

Korea has strengths in beauty technology that are famous worldwide. So cosmetic products there are considered as the first choice of consumers. The popular Korean cosmetic brands are 3CE, Innisfree, Laneige, Skinfood, The Faceshop, Missha, etc.

If you are from China, then you should definitely consider importing Korean cosmetics, as it is very demanded in China.

Pharmaceuticals and functional foods

Ginseng, Ganoderma, and many functional foods and pharmaceutical products with Korean ginseng extract are commonly used in Asia. Ginseng root, fresh ginseng, red ginseng, black ginseng, Ganoderma, and Korean ginseng drinks along with other health and beauty functional foods are the best choice for your business

Korean food

You can also choose Korean food items for a business like spicy noodles, kimchi cabbage, rice water, rice wine, chili sauce, black soy sauce, seafood, favored in Korea. 

If you want to learn how to start your own export-import business online or offline, then we have online courses and programs which will give you the instructions to start an international business either as an agent or direct merchant – from scratch. We have also tools and resources for exporters/importers which help you to grow and expand your business and get more customers and raise profitability.

You are advised to take courses and use the resources ad tools listed below: