KNZBC

News & Events

South Korea: The Impact of Covid-19 on NZ Business

• The overall impression from a range of NZ exporters to Korea is that the impact on their business has not been as bad as expected.

• Appetite for F&B in retail in particular has soared in recent months and some NZ exporters have been quick to bring in higher sales.

• The healthcare sector is performing well.

• New Zealand manufacturers appear to be muddling through but face considerable supply disruptions at home and abroad including component sourcing.

• The number of Korean students studying in NZ has halved as of March (now numbering 3116 students).

• The outbound tourism and aviation industries in Korea have been crippled and evidence suggests that they will suffer from an extended period of inactivity.

Common challenges facing NZ businesses include:

– Rising logistics costs (e.g. airfreight now priced 2-5 times higher), including many last minute cancellations, delays, and reduced capacity.

– Detainment of consignments due to delayed documentation for customs.

– Difficulty maintaining supply due to disruptions at home, export volumes constrained by excessive demand, and difficulty securing components.

– Travel stoppages and event cancellations that are forcing businesses to explore alternative marketing and promotion methods.

– There is opportunity for NZ businesses to secure more market share for certain products with the right strategy, particularly once Korea begins to transition back to normalcy.”

Thanks to the Ministry of Foreign Affairs and Trade and Export NZ for the following update (dated 1 May 2020):-