Exports to Middle East down 18% in January–August

Logistics support for cross-border e-commerce in 5 Southeast Asian nations and Brazil

Coverage from export declaration and certification to local delivery

Up to 24 million won per trade office

KOTRA's headquarters in Yangjae, Seoul [KOTRA]
KOTRA's headquarters in Yangjae, Seoul [KOTRA]

The government is expanding logistics support to help small and medium-sized exporters pivot to Southeast Asian and Latin American markets as shipments to the Middle East decline and freight costs rise. The initiative works through global e-commerce platform Shopee, covering everything from export declaration to last-mile delivery.

Korea Trade-Investment Promotion Agency (KOTRA) announced Monday that it is partnering with Shopee to help South Korean companies with a track record of Middle East exports break into alternative markets, including Southeast Asia and Brazil.

South Korea's exports to the Middle East totaled $8.87 billion in the January–August period this year, down 17.6 percent from the same period a year earlier. The Shanghai Containerized Freight Index, which tracks international container shipping rates, also rose from 1,333.11 in February to 3,662.18 this month.

A key feature of the program is that it extends KOTRA's overseas joint logistics centers — previously focused on business-to-business trade — into the "reverse direct purchase" segment, where overseas consumers buy Korean products directly.

Reverse direct purchases have long posed two challenges for exporters: transactions often go through a simplified customs clearance process that leaves them off official export records, and last-mile delivery costs to end consumers tend to be high.

To address this, KOTRA will support export declarations, certifications, import agency services and customs clearance, as well as B2B2C logistics — pre-stocking products in local warehouses and fulfilling orders on demand.

In Southeast Asia, KOTRA will use Shopee's fulfillment centers as joint logistics hubs, covering Singapore, Vietnam, Thailand, Malaysia and the Philippines. Last-mile delivery costs and other local logistics fees — which account for a large share of total freight expenses — will be subsidized by up to 24 million won ($17,800) per trade office.

In Brazil, support of up to 24 million won per trade office will cover costs related to export declarations, Brazil's health regulatory approval known as ANVISA, import agency services and customs clearance.

ANVISA is the health permit required to sell cosmetics, medical devices, food and similar products in Brazil. An importer of record handles customs procedures and tariff payments on behalf of South Korean companies that do not have a local entity.

Applications for the Brazil program are open through Friday. The program runs through the end of November.

Participating companies will receive government funding covering 70 percent of project costs, while mid-sized enterprises are eligible for 50 percent. KOTRA will also provide local logistics assistance and consulting tailored to each company's stage of market entry.

KOTRA President Kang Gyeong-seong said the program is designed to help companies hit hard by the unexpected war in the Middle East leverage the global wave of interest in Korean consumer goods to diversify their markets. "What makes this program distinctive is that, on top of logistics support, we are working with Shopee to tighten the export declaration framework for B2C reverse direct purchases — an area that had fallen through the cracks — and to build a foundation for local B2B2C fulfillment logistics," he said. He added that KOTRA would help companies affected by the Middle East war "turn a crisis into an opportunity and emerge as globally competitive sellers in Southeast Asian and Latin American markets."


kwater@heraldcorp.com