Korean SMEs, which belong to the 'KOTRA New Delhi Export Incubator Center' under Korea Trade-Investment Promotion Agency (KOTRA) New Delhi branch, are counseling with Indian companies at the 'one-to-one counseling between Korean and AP companies' held at a hotel in Visakhapatnam, the largest city in Andhra Pradesh, India, on September 22./ Photographed by Ha Man-joo

1

By Ha Man-joo, India correspondent, AsiaToday - As India is one of the fastest growing major markets in the world and the most popular markets for foreign entrants, more Korean companies are getting interested in entering Indian market. India is the world's third biggest economy in terms of purchasing power parity (PPP), and is indeed forecasted to be the world's third biggest economy by 2030. Besides, Narendra Modi's economic initiatives, such as 'Make in India' and 'Digital India', are making India more attractive to invest.

In addition, India is receiving attention as an export base for Southeast Asian, Middle East, and African markets. Hyundai Motor India is showing huge potential as India's largest car exporter.

However, the number of Korean companies that entered the Indian market in 2014 plunged to 35 with 85 companies in 2007 as the peak. This is in contrast to Japan's case. 1,072 Japanese companies entered the Indian market in 2013, up from 926 companies in the previous year. The number of German companies that entered the Indian market amounts up to 1,700.

It's a bit strange since the Indian central government as well as local governments have been making efforts to attract Korean companies as India considers Korea as its best partner for economic development.

The gap comes from the lack of accurate information on the Indian market. As the only Korean newspaper that sent special correspondent to India, we AsiaToday have been delivering news about Korean companies that entered the Indian market as a part of its effort to fill up the gap of information. On September 29, we invited Lee Joon-gyu, ambassador of Korea in India, and executive officers of Korean companies in India to discuss about Indian economy and business environment.

During the meeting, the participants pointed out, "It's necessary to provide helpful information for Korean SMEs who are preparing to enter a new market, rather than large companies who have already entered the Indian market successfully."

From now on, we will conduct a series of interviews with heads of Korean companies who have entered the Indian market and are striving to succeed, and share their experience and tips with our readers.

John Kim, president of Sammok S-Form India

1

The first interviewee is John Kim, president of Sammok S-Form India. We met him in New Delhi on Sunday. Sammok S-Form is Korea's top company engaged in producing, selling, and leasing aluminum formwork, which is used for construction. Mr. Kim is a former US lawyer, who served as a lawyer to the Dispute Settlement Division of the Korean Ministry of Foreign Affairs and Trade (MOFAT) and Trade and Commerce Expert of KORUS FTA Support Committee. In 2011, he entered a company that was completely different to his career, and a few months later, he came to India.

Q. Why and when did you enter the Indian market?
A. I saw great potential in India. There are nearly 40,000 construction companies in India. Since there are a lot of construction sites, I figured out there will be more demand for aluminum formwork. In October 2011, I arrived in India and set up a company the following year.

Q. What is your achievement so far?
A. We made sales in the following year of establishment. With annual growth rate of 300 to 500 percent, we've grown up as a company of approximately 100 employees from a small company of two people. We are now working with 45 construction companies in India.

Q. What is the hardest part when running a business in India?
A. India is a difficult place to run a business. Business practices in India are very different from ours. There are transaction transparency issues as well. India has lots of legislative restrictions and doesn't have business-friendly environment. Because of this, I was very confused at first. But when I started to look at them through Indian perspective, many changes began to appear.

Q. What is necessary to succeed in the Indian market?
A. Capabilities of employees, especially English ability is important. Apart from being able to introduce your company and products, you need to be fluent enough to respond to unexpected situations during negotiations. You need to build trust by talking about families apart from business.

Careful advance preparation is also required. Indians are smart, and very good at negotiating. So we went into real negotiations after repeating a large number of virtual meetings.

Besides, getting information and guide by placing my business under the KOTRA Export Incubator Center was one of the biggest factors contributing to reducing trial and error.

Q. What is your advice to Korean companies who are interested in the Indian market?
A. Market entry requires thorough market research and advance preparation. You need to analyze the market's demand for your product rationally and objectively. You need to prepare thoroughly step by step.

And the head office should not save its support and authority to on-site employees in India. It needs time to achieve tangible results for at least two years. But some companies decide to withdraw or change its Indian office chief within six months. One of the reasons that our company was able to enter the Indian market relatively favorably comes from smooth communication and support from the head office.