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It’s not easy to get a toehold in the booming South Korean market. But two New Zealand companies are pushing open doors for other Kiwis in very different ways. Ruth Le Pla filed this report from Seoul.
S imon Walsh nibbles on Whittaker’s chocolate in his air-conditioned slice of Kiwi-land in sticky Seoul. US soldiers from the nearby military base stroll past the window in search of their mid-morning caffeine fix.
To Walsh, it’s just business as usual. His two companies Tiwi Trade and Tiwi Trade Corp are the eyes and ears of Kiwi companies back home. While they import and trade in their own right, they also do business contract negotiations for Kiwi companies.
Unlike other market entry firms, they work entirely on commission for this, carrying all the costs until the Korean and Kiwi partners sign a deal. They get paid when product leaves New Zealand shores.
Walsh has teamed up with Korea-born business partner Sunny Myung. Their imaginary ‘tiwi’ is a hybrid tiger-kiwi: the national animals of South Korea and New Zealand.
They run the two companies in tandem. Tiwi Trade manages alcohol imports while Tiwi Trade Corp handles the non-alcoholic stuff.
So far, they’ve fixed their sights on food and beverages, ensuring Kiwi produce is munched and sipped in Seoul’s top international hotel chains and high-end restaurants.
Luxury yachts are on their horizon. They reason that South Korea’s blossoming economy is ripe for New Zealand’s leisure culture and its boatbuilding expertise.
Certainly, luxury is in the air in the capital of the Republic of Korea [ROK] where Maserati showrooms nestle up against Ferrari, where Rolls-Royce and Mercedes-Benz limos hurtle through the streets, and Prada handbags and Chanel suits jostle on the pavements.
Walsh’s relaxed manner belies the nitpicking attention to detail needed to set up shop in Korea. Because he’s licenced to trade alcohol, for example, his office had to be of a certain size and at a certain distance from the road, which had to be a certain number of lanes wide.
No matter that he outsources distribution and doesn’t physically handle the stock on these premises, his offices had to be in a basement or on the first floor [which means ground floor in New Zealand]. A second floor option was out. He could have been on a third or fourth floor but only if the building had an industrial elevator.
To Kiwi ears, it sounds fiendishly bureaucratic. But there’s method in the authorities’ madness. Seoul’s regulations stymie cowboy companies whose back-room businesses literally block the paths of commerce for others. The underlying message: if you want to do business here, you’d better play by the rules.
The Tiwi Trade business model means Walsh and Myung pick their contract negotiation partners very carefully. They’ve already aligned Sanitarium and Hubbards with some of Korea’s largest distribution networks and, when I visited, had just signed Sanitarium with CJ O Shopping, Korea’s largest home shopping network.
In essence, Tiwi Trade Corp acts as the companies’ brand managers in Korea.
“Rather than them signing up with a Korean company over here, seeing their stock disappear overseas on a ship and not knowing what happens to it, we report back on what’s going on in the market, where their product ends up, how it’s being marketed, and, if there’s dual marketing, what it is being marketed with,” says Walsh.
As a native Korean, Myung can also tease out the full meaning behind the statements that some local companies make in English.
“Sometimes the English department’s vocabulary might be limited,” says Walsh, “and it tends to be limited to very positive words.
“They may say ‘yes’ or ‘no’ in English when ‘maybe’ comes out in Korean,” he says. “It’s very hard for them to say, ‘We’re thinking about it’, ‘We could do something’, or ‘There are some boxes we need to tick first’.”
Play the game long
If Walsh and Myung make a good team in Korea, then pay heed to Kiwi Lewis Patterson who first visited the country back in 1999, fell in love with the language and has been enamoured with it ever since.
Now impressively fluent in Korean, Patterson provides in-market representation to a number of Kiwi companies through his own organisation, Latitude 45.
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For Patterson – and therefore for his clients who include the New Zealand Berryfruit Group, Berryfruit Export NZ Ltd and the New Zealand Buttercup Squash Council – business home base is now on the 21st floor of a tower block in Seoul’s central Jongno-gu district.
Patterson can look out across the city to the Seoul Tower and the hills beyond. One window serves as a see-through whiteboard.
If the Tiwi Trade companies are the eyes and ears of Kiwi companies back home, Latitude 45 is their very own walking-talking branch arm.
Patterson’s driving motivation is a desire to help fix some of the most frustratingly common problems that Kiwi companies face in-market. Unaware of the complexities of the local market, they often leap at the first offer they receive from Korean agents, ship off their goods and wait… and… wait.
Patterson knows that, even with the best will in the world, import agents must juggle demands from competing suppliers and focus on price. Patterson’s objective as an in-market rep is to present and nurture a long-lasting premium brand for the Kiwi firm.
“New Zealand companies,” he says, “have a great history of trading but not necessarily of building brands.”
He’s built up his own market nous through a series of posts, including time with Zespri and a stint in Korea’s tough and traditional oriental medicine sector where he once fronted up to an accuser after receiving threats that he’d end up floating in the harbour.
Patterson has seen several Kiwi companies ditch their smaller in-market contacts when more muscular players offer them a deal. When the big opportunity runs cold, the initial contacts refuse to pick up the pieces and the Kiwi company is left high and dry.
Patterson urges Kiwi companies to play a long game. Business in this part of the world, he says, is as much about taking time to hook up with the right partner as it is to actually work with that person or group in-market.
“So, in a sense, anyone can be the right partner if you work closely with them and give them the support
they need.”
Ruth Le Pla travelled to the Republic of Korea on an Asia New Zealand Foundation Media Advisory Grant.
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