Korea’s exports aren’t very competitive: KITAOnly one out of three Korean exporters have a competitive edge in key markets, a recent study showed, not a good sign as dark clouds hover over a trade environment that may become more protectionist.
According to a survey of 1,125 exporters by the Korea International Trade Association (KITA) on Sunday, 36.7 percent of those polled make products that can easily compete against those of their global rivals. Some 45.6 percent make products that are equal to competitors.
But almost 18 percent make products that are inferior to the competition.
Some 50.7 percent of the companies polled make superior products but only 34 percent are considered good at marketing abroad.
Despite Korea having a relatively high penetration of smartphones and a robust social media scene, exporters have yet to find ways to make the best out of those systems. A mere 32.2 percent of the respondents were using social networks to promote themselves and attract more customers and only 14.8 percent have adopted e-commerce to increase exports.
In a related vein, the poll respondents received a 31.3 score on a scale of 100 when it comes to their ability to combine information and communications technology (ICT) for their businesses, even though ICT is increasingly constituting a key driver of productivity, speed and flexibility. Only 4.1 percent of the exporters are engaged in high value-added service sectors such as marketing.
As for their key concerns, 33.9 percent cited unrest in the international financial markets including an anticipated interest rates rise by the Fed and fluctuations in key currencies. Next came changes in international oil and materials prices, mentioned by 27.7 percent, followed by the slowing Chinese economy.
As measures to boost their competitiveness, 31.6 percent of respondents plan to slash costs, followed by strengthening sales channels, cited by 22 percent, and quality improvement through investments in research and development, by 18.8 percent.
“Recently flagging exports are largely attributable to the global economic downturn but the key factor for exporters is their corporate competitiveness,” said KITA in the report, “which is a must to cope with uncertainties in the aftermath of extended period of low growth in the global economy and trade environment transformation.”
Korea relies on exports for almost half its gross domestic product. In the first 10 months of this year, the United States was the second-largest export market after China, according to the Korea Customs Service. The share of the United States is 13.6 percent for all Korean exports Korea. China’s share is 24.9 percent.
Some 77 percent of exporters polled said their performance is expected to recover after the second half of next year but 21 percent said they don’t expect a recovery.
BY SEO JI-EUN [firstname.lastname@example.org]