The Korea Law Blog did a post, entitled, “Enter the Korean Market — Then Enter China and Japan,” positing that companies use Korea as a test market for China:
The Secretary General [of the EU Chamber of Commerce in Korea, Jean–Jacques Grauhar] mentioned something that I think all global businesses should recognize.
He notes that:
While the world focuses on the Chinese market, company executives should also try to include Korea in their itinerary whenever they visit this part of the world, because a presence in South Korea is indispensable for truly global brands and could in fact constitute an excellent launching pad to reach the Chinese and Japanese market.
In most cases, Korea is a great test market before entry into China and Japan. Many of my clients have successfully succeed and also “successfully” failed in Korea and choose to enter or forgo the Chinese and Japanese markets based on these Korean experiences.
Korea is simply a much cheaper place to do business than Japan and is a much geographically small market than China, thus, lowering the cost of doing business.
Color me skeptical.
Why should a company go into Korea before going to China? What are the benefits of doing that, rather than perhaps using one Chinese city as a test market?
I am a huge fan of Korea and I absolutely am not saying companies should ignore Korea because they should not. But I do question the value of using Korea as a prelude for China. I am just not sure mastering Korea would help all that much in mastering China and even if it does, why not use Vietnam or Singapore or Taiwan as your prelude for China?
Korea as China stepping stone?
What do you think?
