A common misconception many have is that the business processes are fair and transparent. The truth is that Korea is a relationship-oriented country, driven largely by reputation and trusted networks established over time. Most Korean companies would rather team up with an industry partner whom they have worked with and can trust, than with a foreign company of unknown reputation.
Relationships are the key to succeeding in South Korea, an example of which is Korea’s family-owned conglomerates. These companies operate in a closed ecosystem so they rely on their own vendors such as IT providers, wherever possible.The best deals in Korea are oftentimes the ones that marry both organisational and personal interests.
Hence, for a foreign company, it can prove difficult to break into the market without having any connections. Invest time into researching the business ecosystem in your industry. Find out who the key players are and their relationships with one another. This should give you clues on which company to go after. For instance, if a company has historically worked only with local companies from a particular family, you may not be as successful in cracking a deal with them as you would be with a relatively less entrenched new player. Choose wisely.
If you don’t have any relationships with the company previously, you have to find the right person in the company to close the deal. This can be tough if you don’t have the sufficient network. Forge relationships with industry insiders who can give you that information. This could look like working with a local Korean company with the right connections who can partner with you and help bridge the gap.
Koreans are very conservative, so it can be hard to win your clients over if you don’t have a solid reputation in the country. Make sure your PR team has reached out to local publications beforehand, and has secured articles or features in reputable media outlets. Another way to gain exposure is through partnering with communities in your client’s industry. These could be relevant industry bodies or forums, where you could get involved in relevant events for instance. Make sure your clients have heard (good things) about you before your first meeting.
Another misconception is that Korean clients prefer to close enterprise deals in English, which simply isn’t true. Korean clients feel uncomfortable at best, and threatened at worst when faced with the prospect of working with a partner who doesn’t speak the language. The finance and public sectors for instance, communicate almost entirely in Korean. If you’re not bent on picking up the language, work with an interpreter you trust to make sure your words are not being lost in translation.
The last misconception is that your solution has to be completely novel and disruptive. Where anywhere else in the world, your innovative solutions might have garnered interest or applause from potential clients, Koreans are fairly risk-averse. Your clients would feel more assured if they knew that your “innovative” product or service was proven to be successful. If your solution is out of the box, make sure you’re walking into the meeting armed with success stories. Otherwise, consider approaching the C-level leaders who might be more open to taking risks and experimenting with something new, because securing the buy-in at the working level is going to be a real challenge.
In terms of pricing, Koreans will often choose for the less expensive option unless the benefits are significantly high for choosing otherwise. The hierarchical nature of the corporate world means that an employee would need to justify these decisions to their superiors, and would prefer not to go through the hassle of explaining why they went for the costlier alternative. Do your research and make sure your product/service is priced competitively.
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Head of Digital Marketing/Experience Business, Korea