Increasing Overseas Production
The Korea International Trade Association released a report on August 23 via the Institute for International Trade. According to the report, approximately 49% of South Korean small and medium-sized exporters that have production bases abroad are considering increasing their overseas production whereas only 4.7% are planning to relocate their manufacturing facilities to South Korea.
“It has been found that 25% of the 1,015 small and medium-sized exporters that have their own manufacturing facilities currently have manufacturing facilities abroad and overseas production accounts for an average of 32% of their sales.” the institute explained.
The institute also said that 45% and 35% of the firms considering increasing their overseas production are doing so for production cost reduction and timely response to changes in market conditions, respectively. In addition, 65% of small and medium-sized exporters are not using SNS for the purpose of overseas marketing and only 12.4% of them are using e-commerce tools. Besides, company websites account for 48.8% of the tools whereas well-known global platforms and those in export destinations represent merely 29.1% and 14%, respectively.
According to the report, 48.3% of them are investing at least 10% of their sales in R&D and 64.9% of them said that they would increase R&D investment with time. 53.9% mentioned they were working on new business for future profits, 30.5% said they would do so, and 71.2% said they already found at least one future income source.