With a population of 127 million and the fourth-largest economy in the world, Japan is an economic powerhouse. After a period of stagnation in the 1990s and the global slowdown of the 2000s, Japan’s economy has returned to strong annual growth rates over the last decade. Today, Japan has a robust manufacturing sector that is strong across the board, with specialized strength in shipbuilding, food processing, chemicals and motor vehicles, among other types of products. Japan was the fourth-largest export market for Wisconsin goods in 2016. Its top import categories are food, textiles, fossil fuels, chemicals, machinery, and raw materials for industry.
With a population of 51 million and the 13th-largest economy in the world, South Korea is also a well-developed market. South Korea’s economy grew at an annual rate exceeding 10 percent for more than 30 years. It was one of the few countries that escaped the global economic slowdown, and its economy continues to grow at a healthy pace (2.7 percent in 2016). Its strength stems from a focus on technology and innovation: South Korea has the world’s fastest internet speed and highest rate of smartphone ownership, and the South Korean workforce is highly skilled and highly educated. A free trade agreement between the U.S. and South Korea has benefited both economies since its implementation in 2012, and South Korea was the ninth-largest export market for Wisconsin goods in 2016 (up from #10 in 2015). Its chief import categories are electronic components, machinery and parts, fossil fuels, metals, chemicals, and food.
Both countries’ capitals are megacities—the Tokyo metro area is the world’s largest, with more than 38 million people, and Seoul is the third-largest, with 25 million population.
In September 2017, the Wisconsin Economic Development Corporation (WEDC) will be leading a global trade venture to Japan and South Korea. Wisconsin exporters of goods and services are invited to participate in this program, which will include segments in Tokyo and Seoul. In each city, participants will be scheduled for one-on-one meetings with potential partners in the market. These partners are chosen specifically for each participating company.
Each participant in the global trade venture will also receive Japan and South Korea market assessments specific to his or her company, detailing considerations they should keep in mind when introducing their product or service into these markets. WEDC has eyes and ears on the ground in the markets, in the form of Wisconsin’s authorized trade representatives—thus making it easier for Wisconsin companies to find local partners they can trust, and taking some of the guesswork out of launching in a new market. With all your appointments arranged for you, you can focus on business rather than logistics and scheduling.
Because both Japan and South Korea are large and well-developed economies, companies of just about any kind will find opportunities in these markets. Wisconsin companies in the following sectors are especially encouraged to participate in this global trade venture:
Both Japan and South Korea have low birth rates and long life expectancies, meaning that in the coming years, the elderly will make up an increasingly large proportion of the population. As a result, demand for medical devices and health technology is strong in both markets.
Japanese and South Korean consumers have sophisticated tastes, and products will do best in the market if they are of high quality and/or are substantially different from what is currently available in the market. Consumers in these markets take a strong interest in food products that are have not traditionally been available locally, such as cheese and craft beer.
This program is timed to coincide with the Midwest U.S.-Japan conference in Tokyo, and the global trade venture package price includes admission to the conference reception. And with South Korea preparing to host the 2018 Winter Olympics and Japan scheduled to host the 2020 Summer Olympics, both nations are focusing on making sure their transportation and other infrastructure is in excellent condition to handle large amounts of international visitors and a global media spotlight. Wisconsin companies should not let geopolitical concerns dissuade them from participating in this global trade venture; in fact, potential local partners may be especially eager to forge new international connections if such concerns have led to a decreased level of interest in their markets.
In particular, Wisconsin companies might find opportunities in these markets for products with which European markets are saturated—medical devices, for example. Companies whose long-term export strategy includes these markets are encouraged to begin exploring the markets now, since these are relationship-based economies and it can take more time than expected to earn the trust of local partners. These two markets can also be viewed as potential entry points for the Chinese market, as the lessons learned and connections made may prove useful for this even larger market in the same region.
In general, it will be more fruitful for Wisconsin exporters to compete on quality, rather than on price, in these markets. Product features and packaging may need to be adapted for these markets compared to what is used in North America or Europe, which is one reason visiting in person for market research and meetings is recommended.