South Korea plans to foster 15,000 e-commerce exporters by 2022 with additional infrastructure and financing, amid the rapid growth of e-commerce globally.
On Wednesday, the Ministry of Trade, Industry and Energy unveiled plans to help small and medium exporters advance in the global market using online platforms. The plan was jointly announced by the ministries of finance, SMEs and culture.
“The local online export market has surged over the past years but there has been a lack of support from the government in terms of infrastructure and system,” said a spokesperson of the ministry.
E-commerce exports in Korea rose from 1.2 trillion won ($1 billion) in 2015 to 3.5 trillion won in 2018, according to government data. The outlook for global digital commerce transactions is also bright, with annual growth of 20 percent predicted through 2022 to reach $5.8 trillion, according to New York-based research firm 451 Research.
“For small companies exporting multiple types of products in small volume on the internet, the key is to secure logistics competitiveness,” the ministry said.
The government will build an integrated logistics center where storage, clearance and delivery are handled in one place. It will be connected with the Korea Customs Service for automatic export declaration from a firm’s sales to delivery history. A standard information system will also be established to integrate information from production to delivery.
In addition, overseas bases will be set up to better help startups advance in the global market and boost exchanges with foreign companies.
The cities of Gurgaon in India and Seattle in North America will be overseas bases for Korean startups. Some of the Korea Trade-Investment Promotion Agency’s overseas offices will also be turned into international bases for e-commerce exporters.
The government also plans to match Korean small and medium exporters with global companies, foreign venture capitals and accelerators to attract investment funds.
It will make use of KOTRA’s global networks to match with Korean startups. Potential foreign accelerators include Germany’s Bayer in health care, Japan’s KDDI and China’s Alibaba in information technology and Standard Chartered’s Singapore office in financial technology.
Foreign venture capital funds will increase from the current 2.1 trillion won to 2.4 trillion won.
The Industry Ministry will support small and large exporters with a total of 2.9 trillion won in funds this year by newly setting aside 264 billion won. The 264 billion won will be funded by the Export-Import Bank of Korea, Korea Trade Insurance Corp., the Korea Credit Guarantee Fund and Korea Technology Finance Corp.