Business opportunities in Korea

The Republic of Korea (ROK), commonly known as Korea, is the fourth largest economy in Asia and the 13th largest in the world. Korea is located within an average travel time of three hours from over 81 cities with a population of one million or more. Coupled with its world-class infrastructure, Korea is an ideal location for Australian businesses looking for a North Asian hub for strategic expansion.

Korea is Australia’s fourth largest trading partner, with two-way trade totalling over AUD 33.8 billion in 2015-16. Australia and Korea enjoy a complementary trade relationship – Australia sending raw materials to Korea and Korea exporting manufactured goods to Australia. Services are also an increasingly important aspect of the trade relationship, and investment is growing from a relatively low base. Korea is a dynamic country with many opportunities for Australian businesses.

The Korea Australia Free Trade Agreement (KAFTA), which came into force in December 2014, has opened up even more opportunities for Australian business. There are several industries that Australian businesses can target and take advantage of.

Food and agriculture: Australian businesses are in a strong position to supply various food and beverage products to the Korean market. Korea is highly dependent on food imports, with agricultural imports totalling AUD 35 billion per year. Opportunities exist for Australian businesses in a range of food and agricultural items such as wine, nuts, dairy, meat and fresh fruits.

Financial services: Korea’s rapidly ageing population needs increased financial security from personal investments. Consumer expectations are challenging the traditional investment mindset and are putting pressure on Korean banks and funds to deliver higher returns.

Education: Korea is a stable and well-established market for Australian education providers. It is the fourth-largest source country for foreign students in Australia after China, India, and Vietnam. Australia is an attractive destination for Korean university students trying to improve their English language skills and to build work experience to be more competitive in Korea’s tough job market. Opportunities for Australian institutions exist in higher education, vocational education and training (VET), schooling, and intensive English courses.

Professional services: The free trade agreement will deliver new market opportunities for Australian service suppliers, particularly in accounting, legal and audio visual services. For example, within two years of KAFTA coming into force, Australian law firms will be permitted to enter into cooperative agreements with Korean law firms, and within five years, establish joint ventures and hire local lawyers.

ICT digital contents and services: Koreans are among the world’s biggest users of fast broadband and mobile phones. Korea was the first country to build a national, high-speed fibre broadband network (more than ten years ago), and has a mobile penetration rate of 1.1 mobile phones per person - which means there are more mobile phone accounts than people.

Health, aged care and biotech: Korea’s population is ageing rapidly – faster than most other OECD countries. This is the result of increased life expectancy and one of the lowest fertility rates in the OECD. As a result, there is an increased demand for aged care, the bio-tech industry, medical services and devices, over-the-counter medications and rehabilitation services.

R&D: Korean investment in research and development was USD 80 billion (AUD 108 billion), or 4.3 per cent of GDP in 2016 – one of the highest levels in the world. Koreans love new technology, and are often among the first in the world to embrace cutting edge products and services.

Want to learn more? Explore our other South Korea information categories or download the Korea Country Starter Pack.