Why I Chose South Korea to Expand My Startup

Exploring the most attractive market for Wideo’s launch into Asia

I recently wrote a post on how Asia has begun to define its place in the global startup scene. The number of venture capitalists in the region is on the rise, and the area has become a prime location for later-stage startups who wish to break away from the noise in Silicon Valley.

As the co-founder of Wideo, an online video platform targeting small and medium enterprises who seek an easy way to create and share animated videos for their product demos, presentations, advertisements, infographics, and more, my team and I discovered our product could be a great fit in key Asian markets. We had the opportunity to partner with The Nanyang Fellows Programme, and conduct a feasibility study to assess the market attractiveness of the following Asian countries: Hong Kong, Japan, South Korea, Singapore, and Taiwan, with the ultimate aim of targeting startups, educators, and SMEs in these countries and converting some into paid users for Wideo’s long-term sustainability.

Why South Korea is the most attractive market for Wideo

Based in Buenos Aires, Argentina, my team has always operated with limited resources, so when entering a new market, we always consider carefully which countries to prioritize and what type of strategy to use. Our feasibility study assessed the following six factors in order to determine which of these would be the most attractive market for Wideo’s launch into Asia:

• Market Size
• English Proficiency
• Quality of Information and Communication Technology (ICT) infrastructure
• IT savviness
• Receptiveness of Western Products/Services
• Openness to Online Transactions

Our feasibility study concluded South Korea would be the most attractive market for Wideo, based on the country’s high scores in IT savviness and openness to online transactions. With a high-speed Internet network (fastest average Internet connection speed in the world in Q2 2014), and keen interest in education and adoption of technologies, the Internet has become intertwined in the South Korean’s way of life and has contributed to the increase of SMEs and entrepreneurial culture in South Korea: the main target user group for our video platform.

A 2013 report by Ernst and Young, which compared and analyzed entrepreneurship ecosystem in G20 countries, placed South Korea as one of the five leading G20 countries for fostering entrepreneurship. The South Korean Government has even established the “Content Industry Promotion Plan” for cultivating the content industry as one of the core industries that drive the creative economy, allowing creativity and imagination to be injected into Information and Communication Technology (ICT) to spawn new high value-added industries and help achieve sustainable economic growth.

The Benefits of Launching Wideo in South Korea

There are many benefits for launching our product in South Korea first, but we identified the following as the most significant.

1. Allows for Rapid Entry into Asia

South Korea is known for producing global brands, and its pop culture is widely accepted in other Asian countries. This would place Wideo in an advantageous position to launch into other parts of Asia, should we establish a successful presence in the South Korean online video market space first. Wideo’s success in quickly acquiring new users in South Korea is likely to aid our expansion into other parts of Asia.

2. Minimizes our Startup Costs

By focusing our growth efforts solely in South Korea to start, minimal capital and costs are required for our expansion. We can rely heavily on our existing resources, and we would not need substantial investment in additional human resources. We can boost our acquisition of new users by developing and launching a Korean-themed Wideo platform that appeals to the population and meets market requirements. We can then encourage positive word-of-mouth promotion of the platform via South Korean early adopters of IT and opinion leaders in the region.

3. Reduces our Risk of Failure

By focusing first on entrance into one country, we can be sure Wideo’s resources and efforts are concentrated instead of diffused. Each of the five countries we identified in our feasibility study as a potential market for Wideo is widely different in terms of culture, business practices, consumer practices, as well as technological, economic and political environment. We would need to dedicate a great deal of our effort and resources to understanding and adapting Wideo’s services for each country. Our primary focus on South Korea to start will allow us to attain the optimal outcome desired, rather than spread our resources too thinly.

Next Steps: Wideo’s Potential in Singapore & Japan

Though we found South Korea to be the most attractive market, we do see potential for Wideo in the future in Singapore and Japan as well. Singaporeans’ proficiency in the English language and receptiveness to western products would save us the need to adapt our product for the Singapore market. And while Singapore’s market is likely too small for Wideo, it may be possible for us to leverage entrance into Singapore as a way to bring Wideo to other Asian countries. As Asia’s premier education hub, Singapore also offers a diverse and comprehensive mix of quality education services. Wideo is useful to not only Continuing Education and Training (CET) educators, but also e- or blended- learning curriculum developers, which could be a more viable market for our product in Singapore down the line.

Taking a look at Japan, a country with heavy media consumption, we know that video sharing is very popular on both the Internet and on mobile platforms. While animated video production services at affordable prices do currently exist in Japan, the growth in online advertising incorporating video may also lead to a growing need for DIY-video animation solutions among Japanese SMEs, if we develop a cost-efficient proposition for this market.

In conclusion, we know we can achieve the most success by focusing our resources and efforts first on the market that is most captivating for our growth — South Korea. Furthermore, the South Korean government is more than ready to support technology startups who wish to set up in the region, promising $3.7 billion in backing for startups over the next three years. With the lowest barriers to entry and most favorable environmental factors for us to acquire new users, we look forward to accelerating our growth and taking the next steps in South Korea.

Facts and statistics provided by the Nanyang Fellows Programme; Alvin Chong, Serene Chiang, Ng Hwee Yian, Jasmine Neo

This blog is by Agu De Marco, Co-Founder of Wideo, a DIY animated video production platform.

Looking for a community contributor for technology, startup or entrepreneur related stories? DM me on Twitter @agudemarco or email agu@wideo.co