MR No.: 051/17
Singapore, Tuesday, 21 November 2017
International Enterprise (IE) Singapore signed a Memorandum of Understanding (MOU) with the Gyeonggi Provincial Government of South Korea today, in line with the agency’s approach to engage governments more deeply at the provincial/city level. Gyeonggi is Korea’s centre of high-tech industries and hosts many world-class companies including Hyundai, Samsung, and SK Group. This MOU will boost collaboration in technology start-ups, wholesale distribution and logistics. Witnessed by Senior Minister of State for Trade & Industry and National Development Dr Koh Poh Koon and Gyeonggi Governor Nam Kyung-Pil, the MOU was signed by IE Singapore’s Assistant CEO Mr Tan Soon Kim and Gyeonggi’s Director-General of International Cooperation Dr Cho Jung-Ah.
The MOU adds to IE Singapore’s existing networks in market, establishing a channel for Singapore companies to discuss partnerships in South Korea as well as partner South Korean companies to break into Southeast Asia. IE Singapore and the Gyeonggi Provincial Government will organise business missions, business matching and facilitate Singapore and Gyeonggi-based companies to partner in technology start-ups, wholesale distribution and logistics.
Said Mr Tan Soon Kim, IE Singapore’s Assistant CEO, “This MOU provides a framework for us to engage the Gyeonggi government and facilitate collaboration between our companies. Beyond looking at South Korea as a market, our companies could explore partnerships with their Korean counterparts to jointly access third countries by leveraging each other’s strengths in areas such as technology and distribution network.”
Opportunities for partnership in Southeast Asia
Gyeonggi, the area surrounding the capital of Seoul, is an attractive business destination and the most populous province with a population of 12.5 million. In 2016, its GDP of S$393 billion and international trade amount of S$271 billion topped all provinces in South Korea1.
There are opportunities for Singapore companies to offer their services in partnership with Korean companies to bring Korean brands to ASEAN, capitalising on their existing distribution networks. Comprising 31 cities, there are over 761,000 SMEs in Gyeonggi, including those in consumer products such as beauty, health supplements and textile. Singapore companies in the trading, logistics and ecommerce sectors can provide their services, source for products and services from this large pool of SMEs and enter new markets together with Korean companies. Many of these Korean SMEs are looking to expand overseas, especially to tap into the growing consumer market in Southeast Asia, but may not have the necessary connections in this region, especially in marketing, distribution and logistics fulfilment.
With strong business networks in Southeast Asia, Singapore wholesale trade companies can collaborate with South Korean companies to jointly distribute their consumer products in the region, further reinforcing Singapore as a trade hub. IE Singapore has been facilitating tie-ups between South Korean brands and Singapore companies. An example is Luxasia, who is working with South Korean company Clio Cosmetics and entered the Indonesia and the Philippines markets.
Said Mr Wolfgang Baier, Group Chief Executive of Luxasia, “We see huge potential in South Korean brands as they have been gaining popularity in Asia due to 'Hallyu’, especially for beauty products. Luxasia has been growing by representing these promising Korean brands to enter new markets in Asia via its omnichannel capabilities. Through IE Singapore’s in-market assistance and connections, we gained the first-mover advantage to partner promising Korean brands such as Clio. We hope that IE Singapore’s partnership with Gyeonggi province will open more doors for us.”
Besides wholesale distribution, there is a growing demand for cross-border fulfilment services as South Korean companies look beyond their domestic market to capture the growing e-commerce market. The Asia Pacific e-commerce market is expected to grow to more than S$1.6 trillion by 2022 2. Singapore’s strong logistics networks in the region meet the needs of such players. For example, IE Singapore connected Singpost to Interfashion Planning, South Korea lifestyle and fashion company, to partner them in logistics and marketing to consumers in Southeast Asia. Singpost is also working with Café 24, another Korean e-commerce business, to provide logistics services for their products in Hong Kong, Taiwan and other markets.
Technology partnerships as South Korea’s start-up scene emerges
The Korea start-up market has grown significantly since the government introduced the Creative Economy initiatives in 2013. From 2015 to 2016, the number of investments in start-ups increased by 49%3, and the investment size increased by 23%4 due to the government support. Most of the start-ups are in Information and communications technology (ICT) services, ecommerce and healthcare5, including e-commerce platform Coupang, and mobile platform operator Yellow Mobile6, both of which are part of the Global Unicorn Club7.
The MOU will facilitate Singapore technology start-ups to enter Gyeonggi and access its ecosystem, including co-working spaces, incubators and in-market immersion programmes to help our start-ups gain deeper understanding into the technology scene in South Korea and meet with potential partners.
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About International Enterprise Singapore
IE Singapore is the government agency that promotes international trade and partners Singapore companies to go global.
We attract and anchor global trading companies in Singapore by promoting our unique advantages as a global trading hub. Today, Singapore is home to a complete ecosystem for the energy, agri-commodities and metals & minerals trading clusters.
Through our network of over 35 overseas centres and comprehensive assistance programmes, we partner Singapore companies to strengthen their global competitiveness.
IE Singapore will merge with SPRING Singapore to form Enterprise Singapore in Q2 2018. The new government agency will leverage our core strengths in internationalisation and SPRING’s expertise in helping SMEs, providing Singapore companies with a holistic and integrated network to build capabilities and access overseas markets.
Visit www.iesingapore.gov.sg for more information.
 Source: Korea International Trade Association (KITA)
 Source: Statista
 Total number of investments in start-ups in 2016 increased to 313
 From S$1 billion in 2015 to S$1.23 billion in 2016
 Source: Platum
 Source: CB Insights
 Start-ups valued at more than S$1.36 billion