Increased costs at home attracts Korean SMEs to Malaysia
Escalating costs of doing business in South Korea has encouraged many of its small and medium size entreprises (SMEs) to move to Malaysia to tap into the growing South East Asian market with a consumer base of 600 million.
Currently, there are more than 5,000 South Korean SMEs operating in the country, particularly in electrical and electronics goods, fashion and cosmetics and other consumer products.
The "Malaysia My Second Home" programme, and the relatively lower cost of living here, has attracted some 25,000 South Koreans to reside in the country.
"Malaysia is also seen as a platform to tap into the growth in China and India, and this presents abundant opportunities to South Korean SMEs," said Patrick On regional director of Gyeonggi Business Centre, South East Asia.
In identifying niche opportunities, the South Korean government also provides incentives to companies intending to venture into the halal market.
“Malaysia’s halal certification, which is recognized globally, and its close relations with the OIC (Organization of Islamic Cooperation) countries, has attracted South Korean SMEs to establish operations here," added On.
He was also of the view that the Ministry of International Trade and Industry will be more aggressive in encouraging South Korean SME to set- up operations in Malaysia by offering tax incentives.
In addition, with the popularity of the K Pop or the Korean music culture in Malaysia there has been an increase in demand for Korean fashion, cosmetics and food.
The Gyeonggi Business Centre Kuala Lumpur (GBC KL) is the Southeast Asia business hub, representing the Gyeonggi provincial government, assisting South Korean SMEs to penetrate the South East Asian market via promotion of regular trade missions with local buyers and host specialized trade meets with respective local industries.
Through business collaborations with the Korean Gyeonggi provincial government, GBC KL is able to provide a huge sourcing database of about 3,000 South Korean SMEs seeking marketing partners in the region.
Adapted from Business Times, 4 June 2012
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