Asian interest in the African continent could spell opportunity for local ICT companies. However, organisations looking to capitalise on the interest will need to overcome culture differences.
So says Sake van der Wal, economic counsellor at SA's embassy in Seoul, South Korea.
"SA has much to offer Asian markets in terms of business process outsourcing and an alternative manufacturing destination. However, differences in business cultures make Asian investors question the efficiency and commitment of South African companies," he explains.
Promoting SA
In recent years, countries like China and India have made fast inroads into the African market to secure the continent's natural resources. Slightly slower off the mark, countries like South Korea have had to identify which opportunities they can capture on the continent.
Van der Wal explains: "The South African embassy in Seoul is actively targeting companies in the region to promote SA as a destination. As an example, we promote SA as a destination for customer service centres. For Asian multinational companies, SA is a great region because it sits right in the middle of the Americas' and Asian time zones."
According to Van der Wal, many of South Korea's major companies have opted to set up regional customer service centres in each area of operation. However, differences in customer experiences, high costs and difficulty in delivering messaging changes in real-time have these companies looking at alternatives.
"On average, we speak to big businesses on a quarterly basis to get the idea of SA as a destination going. And the interest is certainly there."
Van der Wal adds there is an opportunity for SA to become a manufacturing or assembly destination for IT and electronic goods like monitors and flat screen TVs.
"SA can compete in manufacturing despite the much spoken about concerns over our labour costs. The cost of labour is just one aspect; SA's free trade agreements, good infrastructure and language neutrality balance out labour cost concerns."
Capacity and commitment
Like other rapidly developing regions, South Korea is concerned about the speed and availability of connectivity in SA.
"Certainly, our connectivity is seen as slow and unreliable - this is more of a concern for Koreans than cost. However, greater doubt surrounds our business processes. South African businesses are typically slow to respond to e-mail and Internet queries; this signifies lack of interest and commitment to efficiency-conscious Asians," he explains.
While there are opportunities for South African companies from their Eastern counterparts, the success in turning talk to action is largely dependent on African readiness to adopt Asian business culture.
"The interest is there, but South African companies need to come to the party. Doing business in Asia takes investment - companies need to look at whether they have the capacity to service these relationships. At all times Asian businesses demand commitment and honour in dealings from their parties."
Van der Wal says the embassy is keen to hear from local companies that are interested in dealing in Korea.
"Our job is to open doors for South African industry. Companies can contact the embassy or me directly on satrade@korea.com. We are keen to broaden our information, that way we provide a better service to both South Korea and South African companies."
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