Need to Find Export Market Diversification Opportunity in the Middle East and Africa

- KITA recommends consumer goods, medical, Halal, ICT, construction equipment markets… will support industries by opening Dubai center -

While the recent trend of global protectionism and export risks of major countries are expanding, the Middle East and Africa are emerging as powerful markets. It seems promising to target the Middle East with medical care, halal products and consumer goods, while exporting consumer goods, IT, automobiles and construction equipment to Africa.

The Institute for International Trade (President, Shin Seung-kwan) of the Korea International Trade Association issued two reports titled 'Get on the rising air of the Middle East' and 'The Wiggling Frontier Market of Africa' on March 26, and advised to pay attention to the markets in the Middle East and Africa with great growth potential in order to diversify Korea's export market.

According to the report, the two regions are continuing the steady economic growth based on the abundance of underground resources and young consumers. The United States, the European Union and China have already been actively entering into the markets, while Korea’s market shares of those regions have been lagging far behind.

※ Import Market Share in the Middle East - Africa: China 11.3% -17.5%, USA 7.9% -5.7%, Germany 5.2% -6.7%, Korea 2.7% -1.2%

With a young and wealthy population and abundant natural resources, the Middle East is expected to grow at a rate of 3 percent this year, driven by oil price hikes. In addition, as the government of each country actively promotes industrial diversification in order to reduce energy dependency, it is expected to see growth in various fields, including manufacturing and retail distribution. The report stresses, ‘The Middle East region is growing with its high purchasing power, women's increased social advancement, and e-commerce expansion. Korean companies need to focus on local markets of consumer goods, medical devices, pharmaceuticals, and customized products for Halal and Muslim.’

Recently, Africa is emerging as a frontier market with a combination of political and economic stability and a rise in strategic value as a resource development market. The report states, ‘Africa has high growth potential, especially in the consumer goods, automotive, information and communications technology (ICT) and construction equipment markets. However, since the resource distribution, population characteristics, economic development and income level of the 49 countries are all different, it is important to differentiate approaches to each market and carry out joint growth strategies through R & D investment, technology transfer, and industrial cooperation.

Yoo Seung-jin, a researcher at the Korea International Trade Association, said, "The Korea International Trade Association is opening the UAE center in Dubai on March 27. We will utilize this center as a hub and actively support Korean companies’ entry into the markets in the Middle East and Africa."