Author: Stephen Blair - South Korea Trade Commissioner, New Zealand Trade and Enterprise
South Korea’s push to boost its economy from the impact of COVID-19 centres around the ‘untact’ concept, which presents significant opportunities for New Zealand businesses.
Even before COVID-19 hit, South Korea was already moving towards creating a highly automated and contactless society, using a uniquely Korean concept called ‘untact’.
Coined by Korean consumer science experts in 2017, the term describes South Korea’s plans for a no-contact economy to combat the impact of rising wages and an ageing workforce. The vision is to have companies replace humans with robots and machines to reduce the amount of labour required from employees, especially older workers, and to increase productivity.
While South Korea has been experimenting with ‘untact’ for some time now with many unmanned convenience stores and digital cashiers at fast-food outlets, it has gained new prominence in the country since COVID-19.
Now, the concept has hit the mainstream and is the expectation for many Koreans who have come to demand the faster, safer, and more convenient experience offered by contactless consumer interactions.
Businesses – big and small – are looking at ways to stay ahead of advances in the fast-moving ‘untact’ economy, launching products and services that can cater to the rise of non-face-to-face social and economic activities. Naver, the country’s top online search engine, adopted a ‘Live Commerce Tool' feature for offline store operators to promote their products through livestreams, which consumers could then order from in real-time.
The South Korean government has also incorporated ‘untact’ into its 160 trillion won (NZ$202 billion) Korean New Deal programme, a stimulus package outlining the direction of the country’s post-COVID economic policy.
Where are the opportunities for New Zealand businesses?
A key pillar of this new programme is the Digital New Deal which aims to expand the digital economy to accelerate future economic growth and innovation in South Korea.
A total of 2.7 trillion won (NZ$3.4 billion) has been earmarked for investment in this year alone, highlighting not only the priority the government has placed on this digital pillar, but also the opportunities for New Zealand’s technology exports into South Korea.
In particular, there are opportunities in areas that are poised for strong growth in the ‘untact’ economy such as chatbots, remote work systems and virtual education, as well as online industries like e-commerce, which has seen a surge as a result of the pandemic.
These plans build on South Korea’s already impressive digital infrastructure – the market is characterised by high digital device possession, fast internet, and high e-commerce spend per capita.
The Digital New Deal also calls for further investment in other technologies such as 5G, artificial intelligence, automated driving and other future mobility technologies that will help reduce the need for person-to-person interaction.
A number of New Zealand companies have already demonstrated their ability to deliver global technological and digital solutions. One business paving the way is Ohmio Automation, which recently launched an autonomous shuttle vehicle in Sejong, a designated smart city in South Korea. The company used its self-driving vehicle technology, software and design, as well as its deep understanding of some of the issues facing South Korean society such as traffic congestion and an ageing demographic, to win the confidence of their Korean partners.
Think ‘Made in New Zealand, For South Korea'
It’s clear there is a huge opportunity for New Zealand businesses to work with South Korean companies to achieve the objectives the government has laid out with the Digital New Deal and contribute to the ‘untact’ economy.
But it is not just technology providers who should take note. New Zealand businesses that can think of innovative digital solutions for sectors beyond the traditional F&B and specialised manufacturing space, such as healthcare and education, will also set themselves apart in this competitive market.
Consumer businesses targeting the South Korean market, such as those in the F&B and FMCG sectors, need to consider how they can meet consumer demand for an ‘untact’ experience – whether that’s using digital channels and tools to tell their brand story or offering products and formats that are tailored to e-commerce platforms.
Regardless of the sector you are coming from, it is key for New Zealand businesses looking to leverage the technology opportunities in South Korea to have a good understanding of what the market needs. This is especially true as the country navigates COVID-19 and moves towards economic recovery.
Aside from producing the best technological solution or product and selling it in-market, it is imperative that New Zealand companies pre-empt the needs of the local market and provide solutions that will help local partners overcome the challenges they are facing.
I believe the best way to go about it is for New Zealand businesses to think about whether their solution is one that is ‘Made in New Zealand, for South Korea’, where they contribute to the market as collaborative partners that can add value for local firms.
If it is, speak to your partners in-market about how you can use your solution to leverage some of the opportunities that have emerged out of COVID-19; or connect with us at NZTE where we can provide the relevant resources to help you navigate this current environment. You can also find more resources on NZTE’s dedicated COVID-19 website as well as here on myNZTE, our free online portal for curated, in-depth information and guidance.
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