Korea losing IT edge to China in EU

By Kim Yoo-chul

China is pushing Korea into a corner in the European information technology market, with its cheap products; and if it narrows the technology gap, Seoul could be swept away from its stronghold in the North American market.

According to the National IT Industry Promotion Agency (NIPA) Korean IT exports accounted for 3.2 percent of total exports ― worth $22.6 billion ― as of the end of last year.

NIPA noted that Korea’s market share was stalling as the country was failing to make a massive breakthrough. Since 2005, the market share of Korean IT companies has remained almost flat at around 3 percent.

Korea’s share increased to 3 percent in 2004 from 2.6 percent in 2003, but has remained relatively unchanged since then.

Japan is stuck in a similar dilemma. The institute said the combined share by Japanese firms in Europe remained at 4.5 percent last year after its peak of 6.5 percent in 2001.

``Korea and Japan are shifting their top priorities to selling more premium and value-added consumer products rather than selling low-end digital devices. With cheaper products, China has recently been raising its European share,’’ said an official at the Samsung Economic Research Institute (SERI).

China is raising its footprint in one of the world’s biggest consumer electronics markets by exporting much cheaper products.

NIPA said Chinese companies took up 21.7 percent in Europe on a combined basis from 5.6 percent and 12.6 percent in 2001 and 2005, respectively.

``In Europe, the market gap between China and Korea has been expanding. Except for some industries that need advanced technologies, China is far ahead,’’ said NIPA.

Europe was controlling 31 percent in the global demand for IT products last year.

Samsung Electronics and LG Electronics are battling with Chinese companies over televisions, handsets and monitors to other digital devices.