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| Country Manager Shi-Young Chang The York Group Korea Yook-In Bldg. 2F, 996-16 Daechi-dong, Gangnam-ku Seoul, 135-280, Korea Tel: +82-2-561-3136 Fax: +82-2-561-3529 Mobile: +82-17-224-3136 E-mail: sychang@theyorkgroup.com |
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Mr. Chang has been active in software since 1980, including extensive
experience in mainframe systems management, and client-server technologies.
His background includes technical positions as well as sales & marketing,
bringing broad a range of experiences to his role as Managing Director
of The York Group (Korea) Ltd.
Regional Spending on Information and Communications Technology
(Data provided by WITSA - www.witsa.org/digitalplanet
)
| Technology Sectors | Spending ($millions) |
| Hardware | 9,977 |
| Software | 1,645 |
| Services | 4,701 |
| Communications | 28,118 |
| TOTAL ICT Spend | 44,441 |
| Vertical Markets | |
| Agriculture | 69 |
| Manufacturing | 15,954 |
| Utilities | 796 |
| Construction | 526 |
| Wholesale & Retail | 2,943 |
| Transportation & Communication | 3,197 |
| Finance & Bus. Services | 3,675 |
| Other Services | 1,206 |
| Government | 3,674 |
| Consumer | 12,393 |
| Software Piracy | 46% |
Top 5 reasons to consider Korea as a place to do business:
Doing Business in Korea*
1. Korea is the ninth largest ICT market in the world, and the third
largest in Asia-Pacific
2. IT infrastructure is well-established, so technology companies will
find ready markets for their products
3. Korean companies are familiar with foreign products and are early
adaptor of new products and technologies
4. The business risk is low because the market is stable for international
business processes
5. Because 98 % of technology products are sold through indirect channels,
resellers and systems integrators are very experienced, and enjoy strong
relationships with their clients that can accelerate the sales process.
Doing Business in Korea*
Local representation is essential for the success of foreign firms in
the Korean market. This is especially true when considering the fact
that business relationships in Korea are built upon personal ties and
social introductions, and that much of the major third-country competition
is only a few flight-hours away. In addition, for sectors that involve
any type of government procurement, an entity must be registered with
the Korean government in order to bid on the procurement projects. Hence,
many American firms enter into a consortium with a Korean company or
enter into a representative agreement, especially for the purposes of
market entry. Finally, the language barrier and established social/
business circles make it extremely difficult to enter the Korean market
without a qualified Korean representative.
The most common means of representation include: 1) appointing a registered commissioned agent (more commonly known as an "offer agent" in Korea) on an exclusive or non-exclusive basis, 2) naming a registered trading company as an agent, or 3) establishing a branch sales office managed by home office personnel with Korean staff.
Any businessman registered with the Korean government can import goods
in his own name. Appointing a registered trading company (rather than
an "offer agent") as an agent has its advantages because these
agents can handle all of the import paperwork and imports for their
own account. Registered trading companies tend to be larger firms that
split their businesses between exports and imports. However, these larger
firms may be less attentive to building the U.S. supplier's business,
placing a higher emphasis on diversifying their portfolio of products
from different countries. Similarly, while the larger general trading
companies may be influential and well known in the market, they also
may not devote as much attention to a single product as smaller firms
do.
Parallel imports can legally enter Korea. Parallel imports marginally
reduce the value of an exclusive distribution agreement. Many American
companies continue to give exclusive contracts, since they have in place
territorial limits in neighboring countries that enhance the value of
the exclusive in any one country. Likewise, any parallel importer in
Korea that is not receiving the support of the OEM, and does not deal
in the same volume, cannot be guaranteed a steady source of supply.
As noted above, the legitimate exclusive distributor still has considerable
advantages in Korea.
When writing a distribution or agency contract it is common to include
a termination clause. When there are no specific provisions in a contract
on termination, the Korean Commercial Arbitration Code can specify the
provisions for terminating the contract. This compensation clause allows
the agent to claim compensation from the principal. As a mutually signed
contract between a supplier and an agent/distributor overrules the default
Korean provisions of claims by a commercial agent, U.S. companies are
advised to include termination provisions.
U.S. companies should also seek legal counsel with regard to protecting
their intellectual property. Trademark and patent registration (if applicable)
with the Korea Industrial Property Office (KIPO) is the minimum safeguard
for your intellectual property rights in Korea. U.S. companies are advised
to seek the services of a local attorney to directly register their
trademarks and/or patents in their own names. In order to have control
over these important intellectual property rights, registration must
be done in the U.S. company's name and not the Korean agent's name.
Under Korean law, only local attorneys can submit applications to KIPO.
* INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND
U.S. DEPARTMENT OF STATE, 2005. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED
STATES.