The impact of the devastating earthquake and tsunami in Japan on local industries has been narrower than expected, although some industries are experiencing problems with supplies of semiconductor wafers and synthetic chemicals.
Today marks the one-month anniversary of the quake.
Despite initial worries about procuring components from Japan, the impact was not as serious as expected. In a survey of 200 Korean small and medium-sized companies that import parts from Japan, only 7 percent experienced severe component shortages, the Korea Trade-Investment Promotion Agency said in a release.
Work at factories of Shin-Etsu Chemical Co. and Sumco Corp., which account for 60 percent of the world's semiconductor wafer productions, is still suspended. Korea depends on Japan for more than half its procurement of wafers and there may be some problems ahead for local semiconductor companies if Japan's production halt continues.
Semiconductor imports from Japan are largely unaffected but there is a shortage of micro controller units, a non-memory chip widely used in electronics. Japanese companies including Toshiba and Renesas Technology Corp. control over 60 percent of the domestic market for the chip.
JX Group, Japan's biggest producer of para-xylene, a raw material for polyester, is likely to stop exports of the chemical. Korea depends on Japan for more than half of its purchases of para-xylene. Last year, Korea imported 544,652 tons of the material. Kotra said Korea must urgently diversify its sourcing of the chemical.
Korea relies on Japan for an array of auto components, and if production suspensions continue, some damages to the local automotive industry is expected. In 2010, Korea imported $1.59 billion of such components from Japan and they accounted for 32.3 percent of total auto component imports that year. Now, Renault Samsung Motors suspended overtime work at its factory due to parts procurement problems but other companies are unaffected.
Some exporters seem to have benefitted from a boost in their exports since the earthquake in Japan. According to Kotra, exports to Japan between March 12 and 29 jumped 51.2 percent from a year ago. Spring water exports soared 785.5 percent, the most significant increase. Tangleweed deliveries jumped 406 percent, petroleum products exports quadrupled and instant noodle exports grew 123.3 percent
In particular, as the resumption of Nand flash memory chip production in Japan seems uncertain, global buyers are expected to turn to Samsung Electronics or Hynix Semiconductor. The price of DRAM memory chips and Nand flash chips are on the rise again.
Flight traffic between Korea and Japan fell as tours were canceled. Korean Air Lines saw its occupancy rate drop 13 percent compared to a year before while Asiana Airlines experienced a 17 percent decline. The two airlines suspended flights to the Aomori and Fukushima regions.
SK Telecom, Korea's largest mobile service operator, announced yesterday that it will establish a cooperative relationship with China Mobile, China's biggest telecommunications company, in the areas of mobile games, telematics and navigation, among others.
SK Telecom signed a memorandum of understanding with China Mobile in Nanjing City, Jiangsu Province, over the weekend. Under the deal, SK Telecom will provide Chinese versions of Android-based games at T Store, its application store, after customizing them to meet Chinese customers' needs.
Oh Se-hyun, president of SK Telecom's China operations, said, "The MOU will create valuable opportunities for competitive Korean content providers to fully enter the Chinese market. SK Telecom will further strengthen its collaborative relationship with China Mobile in mobile games and M2M [machineto-machine] businesses."
A Lotte Mart quality supervisor at Seoul Station branch in central Seoul checks for radiation on fishery products yesterday. The discount store said it is testing for radiation in stores and warehouses on seven types of vegetables and six fishery products from the East Sea and off the southern coast.
- Social commerce Web sites can take advantage of SK Communications' 33 million members.
Ticket Monster, Korea's leading social commerce Web site, launched its service last week through Brand C-Log, a social networking platform operated by Cyworld, the country's top social media, according to media reports yesterday - and a powerful new entity in the world of social commerce was born.
Social commerce Web sites are e-commerce sites that allow people to make collective purchases with online friends at discounted prices. They are the latest fad in Korea and there are thought to be more than 200 of them in the country. However, they lack social networking platforms of their own, such as Twitter and Facebook.
Cyworld launched the beta service of Brand C-Log last September, which allows such companies to promote their latest news and products as well as events and coupons. The companies can take advantage of not only the platform, but also SK Communications' 33 million members. Cyworld is run by SK Communications.
So one can't say whether this is a perfect marriage. Because the relationship isn't monogomous.
Ticket Monster needs the social networking platform, and Cyworld hasn't ventured into ecommerce yet. But Ticket Monster has hooked up with social media before.
"Ticket Monster has already made its service available in such social media like Facebook, Twitter and Naver blog," said Kim Ji-sun, a PR representative for Ticket Monster. "[The latest development] is the continuation of such efforts."
One big factor about the collaboration is that Cyworld has 25 million users in Korea, dwarfing Facebook's 3.8 million and Twitter's 2.5 million.
Also, more than 6,000 companies and institutions currently have opened their services in Brand C-log. They include Kyobo bookstore, Bennigan's restaurant chain and T Store, SK Telecom's application market.
"We think there can be synergy with social commerce companies," said an SK official.
The Bank of Korea (BOK), the central bank of South Korea, predicted a prolonged uphill climb for consumer prices.
"As economic conditions improve, the current prices hike will most likely be prolonged due to increased demand, uncertainties in global raw material prices, and greater inflation expectations," said the BOK on Tuesday in a currency policy report published after the bank's decision to freeze interest rates.
"We will put more weight on maintaining a firm foundation for price stability," the BOK said in regards to the directions to be taken with the currency policy.
Instabilities in North Africa and the Middle East, fiscal problems in select European countries, and the Japanese quake were all cited as down-side risk factors stumping growth. Compared to last month, the Japanese earthquake calamity was a new addition, while high oil prices and rise in international raw materials were omitted from the list.
Uncertainties in both Korea and abroad will act as the biggest risk factors weighing down growth, said the BOK.
"The Korean economy will still maintain strong growth backed by thriving exports. Meanwhile, surging oil prices set off by regional instabilities in the Middle East and North Africa, the Japanese quake, and the European fiscal crisis will be factors suppressing growth," the bank explained.
However, the BOK's overall forecast for the Korean economy was positive. "Korean exports may set an all-time high record in March. Indicators on domestic consumption and production made a fall from February, but these are mostly due to temporary and seasonal factors such as the foot and mouth disease (FMD) and the Lunar New Year's holiday," it explained.
Meanwhile, the bank predicted higher spikes in consumer prices due to increasing demand, high oil prices, and other by-products of economic growth.
"I propose that China and South Korea begin negotiations of the free trade agreement (FTA) for now," Chinese Prime Minister Wen Jiabao told his Korean counterpart Kim Hwang-sik at the Boao Forum for Asia (BFA) held in Beijing.
Wen's remarks are interpreted as a proposal that the two countries should gather at the negotiating table as early as possible, since they already held two ministerial-level discussions in last September and this April.
"China is quite firm in starting negotiations. Prime Minister Wen believes that once the negotiation process begins, the two countries will be able to work on sensitive issues during the process," Korean Prime Minster Kim told reporters in Beijing on Thursday.
"Korea needs to mull over the proposal, since the FTA with China will give us an opportunity to achieve significant economic development with the help of the expanding Chinese domestic market," Kim said. "I explained to Wen that enough revisions should take place in advance before starting negotiations in order to stave off obstacles and make achievements in negotiating."
Kim means that the two countries need to take careful considerations and preceding measures with regard to sensitive issues like imports and exports of agricultural and fisheries products.
"No decision has been made yet about directions or schedules of the Korea-China FTA," Kim emphasized.
Broker sites that specialize in purchasing brand labels from the overseas market are seeing a surge in male customers as the won-dollar exchange rate falls to the 1,080 won range.
According to the retail industry on Monday, eBay Shopping - a Korea-based purchasing broker site for eBay, the largest internet shopping site in the US - saw a whopping 94% jump in sales in the past month. More than 70% of the buyers were male.
In particular, eBay Motors, a favorite shopping spot for male customers seeking better prices for car parts, has daily traffic in the 1,500 range, a two to three-fold growth from last year. Sales in this category spiked 36%. Sales in music records/musical instruments and smartphone accessories rose 38% and 33% each.
Enjoy Newyork, another purchasing go-between run by KT Commerce, also saw a rise of more than 30% in the category of overseas purchasing in the past month, from March 10th. The male category saw the highest growth in sales at 120%.
This sudden spike in online male shoppers can be attributed to the late entry of male consumers into internet shopping and male sensitivity to brand labels and exchange rates, explained industry experts.
Office of Commercial Affairs, Royal Thai Embassy in Korea
Source : http://www.depthai.go.th