By Cathy Rose A. Garcia
Staff reporter
Small European businesses are getting much-needed help in entering the Korean market, thanks to a program funded by the European Union (EU).
The EU Gateway Programme hosted a two-day exhibition of 58 small and medium enterprises (SME) offering high-quality products and technology relating to the environment, energy, construction and building sectors at COEX, southern Seoul which ended Thursday.
Eric Hamelinck, general manager of the program to Japan and Korea, said the program brings European SMEs to Korea to establish business connections and learn about the business culture here.
``There are a lot of aspects to this: How do Korean businesses react to a European presence? What is their business culture like in regards to negotiation? This is complex... SMEs do not have the possibility of learning how to enter the market and how to deal with the particularities of doing business in Korea. Our purpose is to help them and the best way is to organize this event,'' Hamelinck told The Korea Times, in an interview, Wednesday.
The participating SMEs underwent a rigorous selection process to enter the program, in order to ensure they offer the highest level of technology, are financially stable and the products are viable in Korea. Companies have to be involved in one of three sectors: environment and energy; construction and building; or healthcare and medical, which were identified as having the best opportunities as European companies in Korea.
The EU Gateway Programme was introduced last year, in the midst of the economic crisis gripping the world. The response from the European side was muted with only 17 or 18 companies at each of last year's three sectoral events. The Korean response was more than they expected, with 360 to 370 Koreans attending each event.
However, this did not immediately translate into success stories for the European companies. Hamelinck said it takes around three years to establish a business relationship, which is why the program allows companies to come back up to three times.
``Setting up an international business, you never manage to do it in only one year. The first year is to check the market, the second is to reestablish the contacts they made and the third time is to consolidate, work it out and conclude deals,'' Hamelinck said.
Several European companies who returned to Seoul for a second time are upbeat about the prospects of doing business here.
``It was pretty good last year. It was our first entrance to the Korean market for the fuel cell components. After that we were able to build some contacts, we found an agent here who is responsible for our business. Things are moving forward,'' Thorsten Hickmann, CEO of German fuel cell company Eisenhuth, told The Korea Times.
Hickmann noted Korean companies are much quicker in making decisions than their Japanese counterparts. ``We appreciate the way the Korean companies work and make decisions with high velocity. It is much different in comparison with Japan, where their decision making time is much longer. At the end of the day, time is money. My personal opinion on one of the keys to success for Korean businesses is they are very fast in moving,'' Hickmann said.
Gerold Hacker, sales representative of Austrian firm RZ Holzindustrie, said last year the prices of European products were much higher for Korean companies, compared to suppliers from other regions. ``But now it has changed. Since the euro has gotten weaker, it is easier for exporters from Europe to be more competitive. We have a better chance to be a success this year... We have formed a lot of contacts. Most of them are interested in our products but can we match the price level, that is the final question.'' Hacker said.