This is the start of a series of entries (I’m thinking three or possible four) on doing business in Asia. My consulting business focuses on business development for companies selling RF transceivers and test equipment and one of the most common questions I get is “How do I do business in Asia?” This is asked from two perspectives: (1) how do I sell more into Asian markets or (2) how do I outsource manufacturing to Asia (specifically China).
I have owned a number of small business that outsourced manufacturing to China and have hard-learned lessons I will share with you in the this next series of posts. We will also explore developing business in Asia; if you are a Test and Measurement industry or RF/Wireless OEM professional responsible for developing business in Asia then this is of special interest to you.
We’ll begin with Korea and allow me to explain why. Let’s look at two of the top short-range wireless apps: Zigbee (IEEE 802.15.4) and RFID. I used Google trends to explore who is googling these terms over the last 12 months and here is what I found:
We can clearly see that Korea is where a majority of the Google searches are being initiated from. While it can be debated how much this translates to business opportunities, there can be no doubt that there is interest which is the precursor to that much sought after marketing indicator…awareness. Notice also that English is sixth on the list of languages in which the search is being conducted in. This begs the question – how much of your marketing material is available in the top two languages: Korean and Chinese?
The next thing I discuss with clients is which application, or vertical, should they be focusing on; this is where Korea and China markets differ. While supply chain management is still a big vertical in Korea for companies exporting goods which require tagging, the biggest growth within Korea itself is consumer-facing applications such as contactless payment and smart houses.
A large fraction of the GDP of Korea is invested in construction – a phenomenal amount – required to cope with the speed of growth of South Korea. Dr Geunho Lee, a leading consultant on RFID in Korea, stated that there is a huge interest to embed RFID functionality into new city constructions and consumer appliances. The payback is added value for consumers which they are prepared to pay for. Indeed, the Korean government wholly support this drive; in and even opened “Ubiquitous Dream”, a museum in Seoul with a mock up “smart home”. This includes an Internet refrigerator which tells you what items are in the fridge, when they expire and can automatically order more; contactless security systems and wireless sensors (e.g. the movement of a human causes the lights to turn on etc) and smart laundry machines which read the tags on clothing to automatically set the type of wash required for that clothing. The Ubiquitous Dream House is now integrated into the Digital Pavilion in Sang-am dong.
Anyone who has traveled in Asia can attest to the huge amount of contactless payment systems, relative to the U.S. and most of Europe, which are actually being utilized, unlike most of the attempts in the U.S. (think Exxon/Mobile “speed pass” and such).
So, for those looking for opportunities in growing the market for your short range wireless devices/chipsets (specifically RFID and Zigbee) or the instruments which test them – think KOREA! In fact, I’m thinking of having one of my Korean friends translate and post this for me, hmm…
Oh, and before I get an outpouring of e-mail from Korea asking “Why didn’t you talk about WiBro?”; the reason is that WiBro is a wireless broadband technology and I’m focusing this post on short-range wireless. However, if you want some postings on WiBro, please let me know. (If you see the number of e-mails I get asking this question every time I include Korea and technology in a post you’d understand).
In the next post of this series I’ll talk about outsourcing manufacturing to China. I hope I can save you the blood, sweat and tears I’ve experienced with this (OK, maybe no blood, luckily it was a soft wall I was beating my head against). The good news is that, if you are a small business with a great product, it’s more possible and less expensive then ever to take that product to market and it have it manufactured on a large scale…but I’m starting to steal my thunder for next posting.
Also, I’m keeping in touch with my Department of Defense (DoD) contacts for any updates on this whole banning of USB memory devices issue which I’ll share as they become available.