Premia TNC Hong Kong Team
Author
As the global commerce landscape rapidly evolves, domestic e-commerce sellers are also actively seeking to expand into Southeast Asia, North America, and Europe through platforms like TikTok Shop, Shopee, Lazada, and their own Shopify-based online malls.
However, when entering the actual implementation phase, we face complex institutional and operational challenges that go beyond simply entering the platform. Let’s explore effective solutions to the most common constraints domestic sellers face when selling overseas.
Challenges for Korean Businesses Entering Overseas Platforms
Many global commerce platforms, including Southeast Asia’s TikTok Shop and Shopee Local Seller, require local corporation or business registration as a prerequisite for opening an overseas account. Opening a cross-border account is restricted for businesses operating solely in Korea, and settlement and marketing functions may be disabled. Ultimately, establishing an overseas corporation is becoming a practical starting point for entering the global market as a seller.
Key Takeaways:
Entry into overseas platforms is not permitted. Securing local seller qualifications has to be done through the establishment of a corporation in Hong Kong, Singapore, or others.
Understanding the Hurdles of Stripe Integration Worldwide
Most global payment gateway providers, such as Shopify Payments, Stripe, and Airwallex, offer limited official support for Korean corporations. To address this issue, many companies are establishing Hong Kong or Singapore corporations and corporate accounts to integrate payment solutions like Stripe. This appears to be a positive outcome, leading to increased overseas sales by securing global card payment acceptance and improving conversion rates.
Key Takeaways:
Global PG linkage is not possible. Stripe-based PG integration has to be done through an overseas corporation. Accepting multinational payment methods would aid in increasing conversion rates.
Overcoming Foreign Currency Challenges with Multi-Currency Accounts
When generating overseas sales, not maintaining a foreign currency receivables account can lead to various problems, including currency exchange delays, excessive fees, and missed settlements. To address this, dedicated global settlement account services are widely used, making it much easier to open multi-currency foreign currency accounts, especially for companies with overseas corporations.
Key Takeaways:
No available foreign currency collection account. Opening a multi-currency account has to be carried out in the name of a foreign corporation, which leads to easy integration with global settlement platforms.
Essential Logistics Infrastructure for Successful Overseas Operations
For small and medium-sized sellers who find it difficult to build their own warehouses or manage a global logistics network, platform-based fulfillment services, such as FBT (Fulfilled by TikTok) and Shopee SLS, are good alternatives. These logistics programs are designed to facilitate local delivery and returns for sellers.
Key Takeaways:
Inadequate response to global logistics. Leveraging platform logistics, including TikTok’s FBT and Shopee’s SLS. Secure cost efficiency through local 3PL collaboration.
Bridging Language Gaps in Customer Support
Translating product descriptions, responding to customer inquiries, and managing reviews all carry operational risks stemming from language and cultural differences. While using automatic translation tools as a baseline, you can also consider providing more localized services by incorporating outsourced customer support (BPO) services.
Key Takeaways:
Language and customer service burden. Automatic translation tool with outsourced customer service integration. Localize product pages and marketing content.
Getting Started with a Local Marketing Strategy
There’s often a lack of understanding and execution of content marketing strategies unique to the global market, such as short-form marketing centered on TikTok and Instagram, influencer collaborations, and live commerce campaigns. Consider selecting an agency that can drive tangible performance improvements through data-driven decision-making.
Key Takeaways:
Lack of understanding of SNS marketing methods. Marketing planning through local partners. Initial testing of advertising tools within the platform.
The Impact of Customs and Shipping on Pricing Strategy
Pricing strategies based solely on exchange rates can lose their competitive edge when considering factors like tariffs, shipping costs, and platform fees. Establishing a market-specific integrated cost structure and strategically establishing overseas logistics hubs are essential for price positioning.
Key Takeaways:
Lack of price competitiveness. Establishing a global base by establishing a corporation and logistics center in tariff-free Hong Kong. Maximize operational efficiency by connecting with local 3PL partners.
Navigating Tax and Export Compliance
As overseas sales increase, the complexity of tax processing tasks such as export declarations, tax invoices, and value-added tax processing also increases. A good alternative could be to utilize a country with a low income tax rate, no VAT, and easy export declarations.
Key Takeaways:
Burden of tax and export declaration procedures, etc. Take advantage of Hong Kong’s low tax rates and duty-free benefits. Cost savings are possible through various government-supported projects.
Leveraging Export Voucher Programs Effectively
Despite the availability of various support programs offered by public institutions, including export vouchers, the Global Expansion Program, and KOTRA’s customized research services, many fail to utilize them due to a lack of information. By partnering with a performing organization like Premia TNC, you can receive substantial assistance with costs for establishing overseas corporations, opening accounts, translation, marketing, and other items.
Key Takeaways:
Burden of additional expenses. Utilizing export voucher implementation agency consulting. Check the scope of support for each item and proceed with the application.
The Key to Global Expansion is Infrastructure Setup
For domestic sellers, global expansion doesn’t simply end with opening a store on a platform. It requires a comprehensive infrastructure setup, encompassing incorporation, settlement infrastructure, PG integration, logistics operations, tax compliance, and marketing execution capabilities. To avoid missing out on market entry opportunities, entering with a strategic structure in place beforehand dramatically increases your chances of success.
Practical Consulting for Successful Overseas Expansion
Premia TNC provides consultations on establishing a number of infrastructures for overseas sales, including establishing Hong Kong and Singapore corporations for domestic sellers, opening multi-currency foreign currency accounts that can be linked to overseas payment gateways, and utilizing export vouchers.
Premia TNC Hong Kong Team
Author
Premia TNC Hong Kong is a dynamic team of experts dedicated to supporting businesses and entrepreneurs as they establish, manage, and grow their presence in Singapore and across the region. Premia TNC Hong Kong specializes in providing tailored corporate services, from company incorporation and compliance to tax planning and accounting. With our extensive experience and deep understanding of the local regulatory environment, we are here to make business operations smoother and more efficient.
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