Only half of Korean firms succeed in China: poll

HONG KONG (Yonhap News) ― Only about half of Korean companies operating in China have turned out to be successful, despite their rush into the world’s second-largest economy, a poll showed Sunday.

According to the survey on 212 Korean firms, taken by the Korea International Trade Association’s (KITA) Shanghai office, 55.7 percent of the firms assessed their business in China as “successful.” Among them, 3.8 percent said they were “very successful” in China.

The largest percentage of them, 37.2 percent, attributed their success to the competitiveness of products they sell, while 17.1 percent said good partnership was the key.

Those success factors were followed by a strong distribution channel or a suitable business location, with 12.4 percent, and hiring local talent with 10.2 percent.

Meanwhile, 33.5 percent of the surveyed firms said their business in China was neither very good nor very bad, while 9.4 percent said they failed for the most part and 1.4 percent said they failed exceedingly.

The most common reason for failure was financial difficulty, with 26.4 percent, followed by a lack of distribution channel and lack of product competitiveness, with each 16.1 percent, respectively.

Of the surveyed firms, 45.3 percent reckoned China’s homegrown firms were their largest competitors, and 34.4 percent said other foreign firms were their rivals. Other Korean firm were also thought to be competitors by 14.2 percent.

The companies grew more optimistic about the China market this year, as 57.2 percent, compared to 24 percent last year, said their sales in China will improve.

On sales outlook, 36.5 percent responded neutrally, down from 47.7 percent in 2010, and 6.6 percent had a negative sales outlook, a sharp drop from 26.4 percent in the previous year, according to the findings.