South Korea

Market overview

While South Korea was one of the early epicentres of COVID-19 community spread, the number of deaths resulting from infection is remarkably low, seemingly through a stringent testing policy that many other countries are hoping to emulate.

South Korea ended its social distancing campaign and implemented an “Everyday Life Quarantine” scheme on 6 May. However, further localised waves of infections dampened early optimism.

South Korea is a high potential market for New Zealand companies, and while there are some common challenges facing exporters, there is also an opportunity to secure more market share for certain products with the right strategy, particularly once Korea begins to transition back to normalcy.

Many large Korean corporations have sizeable cash reserves and are good at getting products to market. This often pairs well with the creativity of small New Zealand companies - so now may well be an opportune time to look into, or expand to, Korea.

Challenges with export logistics are likely to be first and foremost. However, demonstrating strong communication utilising e-channel technology, together with a definitive commitment to the market in the long term, will stand you in good stead.

According to reports from the New Zealand Ministry for Foreign Affairs and Trade (MFAT), the New Zealand brand appears to be benefiting from New Zealand’s successful response to COVID-19, creating a good impression with many Korean stakeholders.

For more information on doing business in South Korea, visit myNZTE - our free online portal for curated, in-depth information and guidance.

COVID-19 Market Realities: South Korea

Export support
Last updated: 19 Jul 2020
COVID-19 Market Realities: South Korea update, 1 July

NZTE's TC to Korea, Stephen Blair, talks to NZ Ambassador Philip Turner about new opportunities in South Korea & the long-term outlook for exporters.

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Export support
Last updated: 28 Apr 2020
COVID-19 Market Realities: South Korea overview, 29 April

Philip Turner, NZ Ambassador to South Korea, speaks with Craig Pettigrew (NZTE Trade Commissioner, East Asia) about his advice to NZ exporters.

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Economy and trade

The OECD’s Economic Outlook in June 2020 forecast that Korea will be the least affected economy in the world by the pandemic.

"(The outbreak) led to an unprecedented slump in domestic demand, which maximised fears and caused shock in financial and labour markets," said Deputy Finance Minister Bahng Ki-sun on 1 June in a press briefing reported by The New York Times.

"Recovery in domestic demand will likely be limited due to deepening slump in external demand and uneasy sentiment, and can worsen if the second wave materialises ahead of winter," he added.

The Korea Development Institute (KDI) estimates the economy will recover in the second half of this calendar year and continue to rebound and is forecasting 3.9% growth in 2021. The New Zealand brand appears to be benefiting from New Zealand’s successful response to COVID-19, creating a good impression with Korean consumers and commentators. South Korean President Moon recently proposed a “digital New Deal” as part of an economic stimulus package that will further develop online platforms. This seeks to generate new jobs.

South Korea's economy is strongly connected to China and is likely to suffer impacts while the Chinese economy grapples with COVID-19. China takes around 25% of Korea's exports (particularly semiconductors, chemicals, and machinery), and supplies 21% of its imports.

The Ministry for Foreign Affairs and Trade (MFAT) has a report that includes additional insights, available here.

Supply chain, logistics & freight

Air freight continues to be a challenge for New Zealand exporters due to limited connections and rising costs, however prices have dropped from highs seen in the first few months of the pandemic.

For some products, the instability of sea freight is seen as an ongoing risk to supply. The erosion of international air links has also resulted in reduced freight capacity as companies wrestle with limited options.

Government support

South Korea's government has announced three fiscal packages worth 270 trillion won (NZ$344 billion or 15% of GDP), with room for more, given the country's net public debt at 14% of GDP in 2019.

The current stimulus includes support for five industries - automobile, aviation, shipping, oil refining, and shipbuilding - plus a “new deal” for digital transformation and reduced carbon emissions.

The Government is providing financial support to employers who attempt to maintain their workforce during the challenges of COVID-19. A summary of these packages, compiled by New Zealand’s Ministry for Foreign Affairs and Trade, are as follows:

Loans and Guarantees

  • For SMEs and small merchants: KRW72.7 trillion (NZ$93.6 billion) .

  • For low cost airlines: KRW0.3 trillion (NZ$386 million) .

  • To local credit guarantee funds: KRW0.5 trillion (NZ$643 million) .

  • Loans and guarantees to avoid a credit crunch: KRW41.8 trillion (NZ$53.8 billion) .

  • Loans to banks as well as securities and insurance companies for 3 months: KRW10 trillion (NZ$12.8 billion) .

Coupons and vouchers

  • Family care leave: KRW2.8 trillion (NZ$3.6 billion) .

  • Emergency livelihood support and deduction in national health insurance: KRW3.5 trillion (NZ$4.5 billion) .

  • Emergency relief grants of up to KRW1 million (NZ$1287) to all 21 million households. Note: 2.7 million lower income households can receive grants in cash and remaining 19 million households are to receive vouchers or credit card points.


  • Liquidity support to the financial sector: KRW8.2 trillion (NZ$10.5 billion) .

  • Expansion of FX liquidity by raising ceilings on FX derivatives positions of banks and easing of FX market stability rules .

  • Bilateral currency swap agreement between the Bank of Korea and US Federal reserve for 6 months .

  • 50 point policy rate cut to 0.75% .

  • Interest cut on Bank Intermediated Lending Support Facility to 0.25% .

  • Purchase of treasury bonds: KRW1.5 trillion (NZ$1.9 billion) .

  • 25 basis point policy rate cut to 0.50% .

  • Bond Market Stabilisation Fund: KRW20 trillion (NZ$25.7 billion) .

  • Securities Market Stabilisation Fund: KRW10.7 trillion (NZ$13.7 billion) .

  • Key Industry Relief Fund (to purchase corporate debt and equity): KRW40 trillion (NZ$51.5 billion).

Tax benefits

  • Reduction of rents and cut in individual consumption tax on cars: KRW1.7 trillion (NZ$2.1 billion).


  • Aid to employees and severely affected provinces, including expanded employment retention subsidy: KRW1.2 trillion (NZ$1.5 billion).


Travel to Korea for non-urgent purposes, including tourism, is suspended until further notice. Only visas for work, investment and other business purposes are being issued. Visit Korea has more information on visa issuance.

Air New Zealand has a limited schedule between Auckland and Seoul as follows:


  • 15 October 2020

  • 13 November 2020

  • 4 December 2020

  • 18 December 2020 (additional December service)

  • 22 January 2021

  • 19 February 2021

  • 19 March 2021


  • 18 October 2020

  • 15 November 2020

  • 6 December 2020

  • 20 December 2020 (additional December service)

  • 24 January 2021

  • 21 February 2021

  • 21 March 2021

South Korea travel advisory:

Advice to exporters

The overall impression by a range of New Zealand exporters to Korea is that the impact on their business has not been as bad as potentially expected. Appetite for F&B in retail in particular has soared in recent times and some New Zealand exporters have been quick to bring in higher sales. The healthcare sector is also performing well.

Various reports note that most industries including automotive, telecommunications, aviation, hotel, and fashion will be negatively impacted, whereas food and beverage will be partially impacted only, with delivery service and e-commerce purchase demand increasing and offsetting other softening sales. The gaming, media, and entertainment industries are likely to benefit as people are spending more time indoors.

New Zealand exporters that will continue to perform well under the current scenario (if supply can be maintained) will include food and beverage producers, helped by strong Korean delivery service and e-commerce channels. New Zealand products that are sold through large café brands in Korea will continue to fare better than small to medium sized retailers. The trend points to growing demand for immune system-related products off the back of strong demand for health food products and is unlikely to diminish anytime soon.

Common challenges facing New Zealand 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.

A report by the Ministry of Foreign Affairs and Trade (MFAT), accessible here, identifies further challenges noted by New Zealand businesses:

  • Weaker in-store retail sales (and reduced promotional activities);

  • Difficulty sourcing raw materials/components (e.g. containers) from China;

  • Slower sales due to cancellation of events, school closures, and reduced customer foot traffic at food service outlets and tourist destinations;

  • Remote working and social distancing policies have made it difficult to undertake sales pitches and generate sales leads.

If these challenges can be met by New Zealand companies, Korean partners will appreciate effort and commitment to their business long term.

Tradeshow and event information

Numerous international tradeshows and events are being postponed or cancelled in response to the COVID-19 pandemic.

Make sure you proactively check with organisers for any tradeshow or event you're scheduled to attend – conditions and regulations are changing rapidly overseas, and events may be postponed or cancelled at short notice.

Sector insights

As is to be expected, numerous sectors have been impacted by the COVID-19 pandemic. Below you'll find information on any COVID-19 effects across important sectors and industries in Korea.


Online retail sales have continued to experience strong growth in Korea. Government statistics show online transactions in March were up 11.8% from the same period last year, and up 24.5% on the previous month. Compared to last year, online demand has surged for food and beverage products (up 59.4%), food delivery services (up 75%) and sanitisers and detergent (up 46.9%).

South Korea's leading online portal Naver is strengthening its non-contact (also known as 'untact') technology support to help small and medium businesses.

Naver's 'Live Commerce Tool' is designed for offline store operators to promote products sold at their offline shops and communicate with customers in real time through live broadcasting. Customers can order products via Naver's online store platform.

As consumers become used to contactless service, it is likely that these changes will remain as a growing trend even after the outbreak finally ends.

Additional resources

Below you can find information and contact details for other New Zealand government and international agencies regarding their response to COVID-19.

New Zealand Government agencies
COVID-19 helpline for businesses
New Zealand Customs
Ministry for Primary Industries (MPI)
New Zealand Export Credit (NZEC)
MFAT Export Helpline
MFAT Safetravel
Callaghan Innovation
Ministry of Health
WorkSafe New Zealand

Global agencies

World Health Organization (WHO)
Centers for Disease Control and Prevention (CDC)

Contact NZTE

We're available to talk to you about any issues your export business is facing due to COVID-19.

For existing NZTE customers, please contact your New Zealand-based Customer Manager.

If you're unsure who to contact or haven't worked with us before, you can call NZTE on 0800 555 888 or email below and one of our Customer Advisors will help you.