Hint: It takes a little more than knowing ‘Gangnam Style’
Amazon has moved boldly into Southeast Asia, setting up shop in Singapore and signaling its intent to expand across the region. But there’s Asian country where the e-commerce giant has refused to commit: South Korea.
This isn’t surprising to anyone who has tried to do business in Korea, the country whose picky populous famously drove out both Wal-Mart and Carrefour within 10 years of the companies laying the cornerstones of their Korean bricks and mortar outlets.
Across Korea’s tech startup landscape, domestically-bred unicorns like Coupang, Yello Mobile, Kakao and Viva Republica dominate. This has led to a startup ecosystem that many, including the Korean government, describe as rigid and monolithic. In a country already dominated by Samsung, that’s not the desired outcome.
Last year, TechCrunch quoted an official at Korea’s Ministry of Science, ICT and Future planning as saying, “Most innovation is borne from diversity—just look at Silicon Valley. At this stage the startup and business ecosystem in Korea lacks a high level of diversity.”
To correct that problem, the government has begun directing part of its $2 billion annual budget toward incentivizing high-potential startups to relocate to Korea, or to open branch offices here.
Now in its second year, the K-Startup Grand Challenge has attracted nearly 4,000 applicants for just 90 spots. Supply for support falls far short of demand, as startups are attracted by Korea’s central location in East Asia, the world’s fastest internet, affordable but high-quality talent and, despite what the Western media may report, safety.
But the challenges to setting up shop in Korea have little to do with actually establishing a business. That can be done at any local government office for a small fee on top of paid-in-capital. Business registration documents for a corporation are ready in a week. For a sole proprietorship approval can come the same day.
The real challenges are Korea’s unique language and culture. Korean consumers are notoriously demanding. While the Korean language includes some Chinese vocabulary and grammar reminiscent of Japanese, it is actually quite distinct from the languages spoken in either of these neighboring countries. And anyone who has watched Korean dramas on TV knows that personal relationships are directed by Byzantine rules that Koreans begin observing and absorbing from birth.
New incubator helps foreign entrepreneurs adapt to Korean culture
Keeping in mind the challenges that foreign startups face in launching in Korea, the National IT Promotion Agency set up a new program called In2Korea. It functions essentially as a non-equity incubator that provides the support, expertise and resources startups need to succeed in Korea.
Specific benefits for participants include courses on Korean culture and language, which are key to startups’ success. In2Korea also provides access to legal, accounting and marketing experts, free office space, exclusive access to job fairs, and, perhaps most importantly of all, a fast-tracked startup visa.
“In2Korea helps startup entrepreneurs succeed in Asia’s hottest startup hub, Korea,” said DJ Kim, Vice President the National IT Industry Promotion Agency. “We’ve already recruited some of the best mentors and area experts in Korea, and they’re eager to get started working with the startups.”
Next Monday, participants in the first batch of 31 teams from 18 countries will begin to arrive in Pangyo, the tech-centric city 15 minutes south of Seoul’s glitzy Gangnam district. Pangyo is also home to the head offices and R&D centers of many of Korea’s biggest names in tech.
While the first batch has been selected, there is still room for additional startups to apply. Applications will be considered on a first-come-first-served basis, so interested startups should visit https://www.in2korea.org/ soon and start the application process.
The views expressed are of the author.
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