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(EDITORIAL from Korea Times on Sept. 18)

Editorials from Korean dailies 07:16 September 18, 2020

Rise of non-contact trade
: Korean SMEs should expand new type of export aggressively

Amid the unrelenting COVID-19 pandemic, export patterns are also changing. Korean companies' non-contact exports through remote bargaining have increased sharply recently. The Ministry of SMEs and Startups said that 131 businesses concluded export contracts worth 21.3 billion won (US$18 million) through video negotiations in the first half of the year.

For example, a midsize home electronics maker's exports this year increased by a hefty 870 percent from 2019 after joining the Southeast Asian online mall Qoo10. Finance Minister Hong Nam-ki said, "Export firms that have opened stores on Amazon.com and other foreign online malls with the support of the startups ministry recorded a shipment increase of 400 percent on average." The news was like much needed-rain after a drought.

The government is also about to step up its support. The startups ministry plans to connect Korean exporters to foreign buyers through holding online and in-person conferences to discover promising startups in non-face-to-face trade. It will establish an offline showroom exclusively for promising SMEs by organizing events that combine offline and online trade fairs and negotiations. The ministry plans to link domestic and overseas online shopping malls while helping as many Korean SMEs as possible open stores in large foreign malls.

SMEs with weak overseas marketing routes can have advantages in contactless trade. It will be especially so if they are competitive in terms of price and quality in global markets. The government's active support is also likely to give impetus to the new type of exports. At stake is how they maintain competitiveness. Advanced know-how and a firm infrastructure for non-contact trade will end up as fool's gold unless accompanied by good quality, design and pricing.

Korean businesses need to develop "homerun products" that can attract foreign consumers, and do all they can to maintain quality. As things stand now, the current business climate created by the coronavirus pandemic is highly likely to continue for a few more years at the least. Even after vaccines and treatments become available, contactless trade will go on. Now is the time to focus on product quality and technological competitiveness.

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