When consumers are back at home and make buying decisions solely based on price and their own personal preferences, entrepreneurs have to work harder. Since a shift in consumer spending patterns has occurred in most countries due to the global recession, trade in the global market is expected to be influenced. In anticipation of that, one of the longterm plans that the Korea-Trade Investment Promotion Agency (KOTRA) will follow to help domestic entrepreneurs attract foreign buyers is called the IT Set. Director General Ham Jeong-oh of the IT Convergence Marketing Team in the Growth Industry Department at KOTRA said: "IT Set refers to a package deal. For example, let's say we are trying to introduce DMB overseas. In order for DMB to be adopted in a country, other factors like platforms, content, and telecommunication services are needed as supplements. By using the IT Convergence Service as our strategy, we will ask domestic companies to collaborate with one another to put IT products in sets and provide a one stop service to foreign companies who are interested in trading with Korea." This is refreshing news to global companies who are seeking to adapt high quality IT services with affordable pricing and less hassle in individual business deals.
A newborn IT Convergence Marketing Team
On October 2008, the Growth Industry Department gave birth to the IT Convergence Marketing Team. This was good news to IT business which had just lost some of its specialists from the Ministry of Information and Communication because of the switch to the Ministry of Knowledge and Economy. In order to focus the IT sector, KOTRA, who has long been serving as a global marketing service, created an IT Convergence Marketing Team and hosted KIICA's best trained foreign market expert team. "KOTRA was originally designed to support small and medium sized Korean companies in their reach abroad. We are focused on finding and providing foreign markets for those who have no bases or stations overseas, and further work with them to smooth out their delivery of goods," Director General Ham added.
The mission
Mr. Ham continued: "The world economy is approaching the Convergence Era that is led by knowledge and innovation. Convergence between services and devices is already old history. Korean IT is moving forward by creating convergence with traditional industries like construction, automobiles, shipbuilding, and medicine. This increases the chance to find a new growth engine." The sales from IT industry took 16% of the Gross Domestic Product this year. The IT penetration percentage of the GDP is expected to grow. In order to increase synergy effects and business opportunities, the government unified several ministries and offices to work as one.
"Our priority is to introduce small and medium sized Korean companies to global players," Ham said. Global players refer to big firms like Ingram Micro who has a great distribution network. By connecting those two, a market is made. One high priority technology at this point, for example, is PC-based products like MP3 players that are combined with innovative ideas. "In the earlier process of distribution to global players, a broker who set up competition between Korea, Taiwan, and China lowered the price of our products in spite of their advanced quality. We are now well aware of the market, enough to succeed in contract between Korean companies and global players in fair competition," Ham said. He continued by saying: "For example, we had a case where a Korean company with highly competitive MP3 technology couldn't find any global players to distribute their products in the foreign market. To make it worse, countries like China soon came up with similar products that cost only one third of our products. However, one of the global players, Radio Shack, noticed the minor errors in the Chinese products and did not purchase them. A KOTRA staff member stepped forward then and visited Radio Shack alone with the Korean company's MP3 players and succeeded in a deal for them." Ham believes that long held foreign networks are the best strength of KOTRA when it is looking for new business and provides connections for needed companies in Korea.
"Our next important job is to deliver parts to global makers. Global makers refer to manufacturers. Commonly, the products are sent to countries like China that have many factories. Companies like GE in America, for instance, import core parts from all around the world. We try to make as many deals as possible for Korean companies to collaborate with global makers," Ham added.
KOTRA also has been active in financial support for exhibitions like Global Mobile Vision 2008 (GMV 2008) and ITC 2008. One hundred to one hundred thirty foreign buyers were invited directly by the government and were provided with lodging and plane tickets during the exhibition. KOTRA and the MKE were the main sponsors who supported funds. This increased the number of contracts between domestic and foreign companies. "To sum it up, our job is to increase the opportunities of business creation for Korean small and medium sized companies who have high quality products," Ham said.
Blue ocean finder
"If IT related products were individually developed and distributed before, new trends suggest that we should distribute products as a whole system. This strategy will drive us away from a red ocean and lead us to a blue ocean. In a red ocean, we made the spectrum only according to the buyer's requests to gain profit. We still hold this to be valuable, but as a country that has its strength in IT and is highly competitive in the global IT market, we should explore more avenues with our applied technologies. Although our weakness lies on the core technology, we are very strong in developing new applications." Ham continued by saying: "We will always be there to help find the blue ocean for Korean IT companies."
Ham outlined the strengths of the Korean IT sector. "Korea is highly advanced in e-government systems, u-Post services, and Traffic Control Systems with RFID. The package deals, therefore, will add lots of value to the system as whole. In the process of running for both the previous market and the new market, the 96 Korea Business Centers of KOTRA all over the world can be used best for Korean companies."
KOTRA will collaborate with various associations to select products and companies. Ham added: "Big firms are capable of things small and medium sized companies aren't and vice versa. Therefore, a successful project can involve several small and medium sized companies as one. We are seeking to help the companies in this sense."
The IT sector currently accounts for 33.6% of the total amount of exports. With IT convergence products soon to be introduced into the market in the package format, the future is bright. KOTRA is even planning to put together export consulting, buyer conferences, and IT company investments as a package deal.
KOTRA will also participate in global exhibitions like CES, CeBIT, and CommunicAsia next year. Ham concluded by saying: "We participated in 20 exhibitions before, but we are planning to join 35 exhibitions next year. Mobile, DMB and WiBro are expected to bring good news in the foreign market next year. The IT Convergence Marketing Team will find a way out of this long running economic recession with blue ocean strategies to bring hope to the companies, country, and to the world."
