SEOUL, Aug. 18 (Korea Bizwire) – Smaller startup and emerging companies are boosting their shipments abroad despite a prolonged downturn in Korea’s export sector.
According to the Korea International Trade Association (KITA), while Korea’s total exports from January to July 2016 decreased by 10.1 percent compared to the same period last year, exports by emerging businesses have shown a steady increase in recent months.
Although total exports by these emerging firms as of July increased by 0.8 percent ($9.99 billion in total) compared to last year, exports increased by 9.8 percent in May, 5.8 percent in June, and 1.7 percent in July compared to the same months in 2015.
Considering Korea’s recent double-digit decline in overall exports, such an increase is a remarkable trend, said the association.
The KITA also noted that the rate of increase in exports by emerging companies has surpassed that of all industries since 2014. Emerging companies saw a 9.5 percent increase in 2014 compared to 2.3 percent for all industries combined. The same was observed in 2015, in which their exports increased by 2.5 percent while aggregate Korean exports fell by 8 percent.
The United States, Vietnam, and Japan were among the biggest importers of products from Korean emerging companies this year. Exports to the U.S. from January to July 2016 amounted to $1.36 billion (a five percent increase from 2015). Exports to Vietnam came in at $10.5 billion (11.1 percent increase), and to Japan, $906 million (16.5 percent increase).
The association pointed to the slowly improving American economy and Vietnam’s increasing imports of IT equipment and related parts as the sources of the growth. Japan, which is now expanding its investment in domestic facilities with the stagnating economic environment in developing countries, is also seeking to import more foreign equipment and components across its industries.
Semiconductors and wireless communications devices were among the top exported products by the emerging companies. Exports of semiconductors increased by 7.6 percent to $715.9 million (as of July), while wireless communications devices saw an increase of 23.1 percent to $668.8 million.
“A large portion of the semiconductors and wireless communications devices were exported to production hubs across ASEAN member nations, including Vietnam,” said a KITA official. “The recent launch of new smartphones also helped boost emerging company exports.”
By Kevin Lee (email@example.com)