This article was written by Chris. Marketing associate at G3 Partners Seoul. Bike rider, photo taker, and coffee drinker. Melbourne native based in Seoul. Find me on Instagram @pikshee.
South Korea may not immediately come to mind when you think about cross-border expansion to Asia. While Japan has been on the slide for years, the talk of the town has been China, India and fresh opportunities in SE Asia.
Recent government incentives and a wave of foreign entrepreneurs and investors have made Seoul, South Korea a major player in the Asian startup ecosystem.
The South Korean government recently committed USD $2.9 Billion to help launch 50,000 startups. They are also committed to supporting foreign entrepreneurs to set up their Asia operations in Seoul.
Born and raised in Melbourne, I was looking for something different when I arrived in Seoul in 2012. At that time I couldn’t have named a startup and the idea of working for one had never crossed my mind. But it’s simply impossible to ignore the rapidly maturing startup ecosystem here. Once I’d secured a job at (G3 Partners)[www.g3partners.asia], a marketing company that helps startups with cross-border expansion I became fully immersed and now I’m hooked. One of my first projects last summer was helping 40 international startups through a 3-month acceleration program in Seoul – fully sponsored by the government.
I’ve learned a lot about Korea in the last couple of years and genuinely believe that it should factor in your Asia market entry strategy.
Here’s a few reasons why more Australian startups need to take expansion into Korea seriously in 2017.
Early tech adopters hungry for innovation
Spend just 15 minutes on the subway in Seoul and you’ll get an impression of just how much a part of life smartphones have become. E-commerce, gaming, social media, messaging and much more. Even elderly Seoulites manage to rapid fire messages back and forth through ‘Kakao Talk’ the local messaging app that’s installed on around 97% of Korean smartphones. Korea is tech obsessed and its consumers have often been referred to as a barometer of smartphone usage and tech adoption for the rest of the world.
There are opportunities for foreign entrepreneurs in many different verticals. Anything on mobile, as long as it meets Korean consumers high expectations, has a chance to do well. Content, fashion & cosmetics are booming and even fintech has its rising stars – at just two years old Korea’s top fintech startup, Viva Republica, has already transacted over USD $3 billion in mobile payments. Aussie unicorn, Atlassian, has also enjoyed rapid growth in Korea.
Finding your base in Seoul
Whether you’re looking for luxury digs or free co-working space, there’s a great place to work that welcomes startups
WeWork just opened a flagship co-working space in Seoul. At $500 per month for a desk it’s not cheap, but at least you get a privileged view of the famous Gangnam shopping strip. Unlimited free beer and coffee sweetens the deal a little. Hyundai’s credit card division is set to open a similarly-priced, super luxe space right next door to WeWork tomorrow.
But don’t think that you need to spend big to get a nice space in Seoul. Desks can be found for free in a number of venues, tucked away in the heart of the city. Seoul Global Startup Centre even offers free office space and grants for foreign startups. Seoul Global centre (yep a different one) is well equipped to answer any questions about doing business in Korea and of course they’ve got free office and desk space as well.
‘Campus Seoul’ by Google is the first in Asia. It’s a stunning space with more coffee and free co-working space. Their event venue also plays host to numerous startup events each week (more than 365 in their first year), many of which are in English.
Maru180 and D-Camp also offer affordable space by-the-day or on longer contracts and are also located in the Gangnam district. They are both great venues for meetings and present opportunities to rub shoulders with some local startups in the coffee shop.
A mobile first-market that surpasses the West
I’ve lived in Seoul for years, but the speed of Seoul’s mobile internet continues to amaze! If you’re an app developer and you’re building a next generation mobile service, Seoul has to be in your game plan. Most of the city is covered by free wifi and mobile the data speeds mean live HD video streaming on your phone is a piece of cake, even underground.
Seoul is truly a mobile first market. The sheer number of internet connected devices in such a concentrated space makes it great for testing concepts.
Finding your way in Seoul as a foreigner
Seoul is incredibly easy to navigate for foreigners, without a car. Reliable public transport connects every corner of the city and is surprisingly affordable at about $1.25 a trip to most places in the city.
Korea’s economy, now 15th in the world, was built on the incredible domestic human resource and you feel this every day in Seoul. An incredible population density of 16,000 people per square km makes Sydney’s 2,000 feel like farmland. Wonder why tech adoption is so fast in Korea? Just imagine the power of smartphones when you’ve got 26 million people within a 50km radius of your office! There’s plenty of top engineering talent as well, with 65% of Koreans possessing a university degree.
Getting into the city from the capital’s Incheon Airport is straightforward and the airport connects you to around two billion people within a three hour flight. Singapore is a very manageable six-hour hop.
Government support for (foreign) startups
Last year, the Korean government’s largest program for foreign startups, the K-startup Grand Challenge, made it easier than ever to boost your startup into Asia, through Korea. The program (returning in 2017) provided startups with office space, mentorship and funding for three months. After the first three months, twenty finalists were given additional grants of up to USD $130K and visas to set up operations in Korea.
I worked closely with some of these startups and saw first hand how foreign startups, with no prior knowledge of the Korean market could begin to make inroads. Most hired local staff and many even signed deals with some of Korea’s top conglomerates in just three months. Australian startups missed this opportunity in 2016, but if you’re looking to enter Asia this year look out for applications opening up in April.
To sum up why you should consider Korea/Seoul
Seoul’s startup ecosystem has seen explosive growth over the last five years. While barriers to entry exist, as with any market, foreign startups are presented with many compelling reasons to explore Korea and establish a hub in Asia. Free office space and other resources, a foreigner-friendly population, government grants and world class infrastructure make Seoul a very attractive city for startups looking for cross-border growth in Asia.
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