Helping hand: Korea announces measures to increase logistic support for SMEs under export pressure

By Amanda Lim contact

- Last updated on GMT

[Getty Images]
[Getty Images]

Related tags: K-Beauty, South korea, Logistics, COVID-19

The Korea Trade-Investment Promotion Agency is expanding logistics support services and creating an emergency budget to help small and medium-sized enterprises that are under pressure.

This was in response to the critical bottlenecks in South Korea’s ports caused by the COVID-19 pandemic, which has resulted in a shortage of shipping containers particularly.

On July 11, Korea Trade-Investment Promotion Agency (KOTRA) said would increase the number of beneficiaries from 514 to 2,268 SMEs. It would also establish a system that supports international transportation to local delivery, packaging, as well as inventory management.

The companies with access to the Overseas Joint Logistics Centres would also be increased to 1,000.

The Overseas Joint Logistics Centre is a service that holds inventory in local logistics warehouses through 210 partner logistics companies around the world and delivers them as soon as a consumer or buyer places an order.

Furthermore, the state-backed organisation will also be increasing export voucher handouts to 518 companies, up from 114.

In order to help reduce the logistics burden on companies, KOTRA has raised the limit of support per company for international shipping vouchers from KRW10m to KRW20m.

It said that these companies could receive vouchers for international shipping costs, including sea and air shipping from logistics providers.

The number of logistics companies that provide services will also be increased from 45 to 100.

Andy Eum, CEO of South Korean cosmetic company Dermaclass, told CosmeticsDesign-Asia ​that the company was glad for the additional export support from KOTRA.

While the company, which owns the derma K-beauty brand Flesette, has not faced any severe issues, Eum underlined several hurdles it has faced, among them were the burden of rising shopping costs.

He added: “Recently, it has been hard to ship to the US because of there’s been a shortage of vessels. Also, on the Vietnam side, it has been hard to send cosmetic samples to Korea. This is because Korea’s customs inspection for cargo is too strict as they are worried about drugs.”

In addition to export vouchers, Eum added that the company would welcome support, such as buyer contacts, to central Asia and the Middle East.

Healthy export numbers

South Korea’s exports have been surging this year. As of June, the nation’s exports marked a fourth consecutive month of double-digit growth.

Recently, it attained the mantle of the world’s third-largest cosmetics exporter behind only France and the US.

This was according to government data released by the Ministry of Food and Drug Safety (MFDS), which showed that the country’s combined exports of cosmetics products increased 16.1% to KRW8.28tn (U$7.28bn) in 2020.

These figures now place the country ahead of other leading cosmetic exporters such as Germany, Japan, Italy and China.

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