[Insight] Why Korean Companies Must Expand Overseas in the Era of Rising Exchange Rates

Create Chances for Global Expansion Through International Trade Shows.

KRW-USD Exchange Rate Trend (Source: Bank of Korea)

Since hitting its lowest point in 2021, the KRW-USD exchange rate has been continuously rising. Recently, it has been fluctuating around 1,450 KRW per USD. This ongoing depreciation of the Korean won reflects Korea’s low economic growth, stagnation in investment and productivity, declining export competitiveness, and capital outflow. Over time, this can lead to weaker economic vitality and reduced global confidence in Korea’s market.

Korea's Economic Growth Rate (Source: Bank of Korea)

As Korea’s low-growth trend continues and the exchange rate keeps rising, Korean companies have no choice but to expand into global markets. For small and medium-sized enterprises (SMEs), overseas expansion is no longer an option—it is a necessity.

Why Overseas Expansion is Crucial Amid Rising Exchange Rates

A higher exchange rate alone does not mean that every business must go global. However, considering current economic conditions, this is the perfect time for Korean companies to expand into international markets.

1. Maximizing Profits Through Exports

When the exchange rate rises, exporting becomes more profitable. Even if a company sells a product at the same price in USD, the higher exchange rate means more revenue in KRW.

For companies that source most of their materials domestically, their profit margins increase because their costs remain stable while their export revenue rises. On the other hand, companies that rely heavily on imported raw materials may face higher production costs, making it harder to benefit from the exchange rate advantage.

Several Korean food companies, including Samyang Foods, Binggrae, and Orion, have successfully increased their operating profits by over 5% due to expanding their export markets. These companies, which struggled with domestic market stagnation, have boosted sales by aggressively targeting international consumers.

For example, Samyang Foods—famous for its "Buldak Ramen"—now generates 77% of its total sales from overseas markets. Thanks to higher pricing power abroad and the advantage of exchange rate gains, the company has been able to maximize profitability.

2. Risk Diversification & Market Expansion

Expanding into multiple overseas markets helps companies reduce dependence on a single country and find new opportunities worldwide.

For instance, with the second Trump administration imposing tariffs (25% on Mexico & Canada, 10% on China), Korean exporters are facing serious challenges in the US market. Many companies already have factories in Mexico and Canada, but expanding production further in these regions is difficult due to labor shortages and rising costs.

This means Korean companies must diversify beyond the US market and explore alternative export destinations.

Emerging markets such as Southeast Asia, the Middle East, and Africa have a high demand for Korean products. These regions offer opportunities for partnerships, new product development, and investment attraction, making them essential for companies looking to spread risk and secure long-term growth.

Leverage Global Trade Shows to Enter Overseas Markets

Expanding into international markets is not easy, especially for SMEs and startups that lack the resources to establish local offices. This is why participating in global trade shows is one of the most effective ways for small businesses to enter foreign markets.

Trade shows provide an ideal platform to

. Build global networks before committing to full-scale expansion.

. Increase brand awareness in international markets.

. Gather direct feedback from local buyers, allowing for quick adjustments in product development and marketing strategies.

By attending specialized industry trade shows, companies can conduct market research and better understand local customer needs. There are many international trade show agents in Korea, making it easier to gather information and plan participation in advance.

However, simply setting up a booth at a crowded trade show and waiting for buyers is not a winning strategy. Instead, companies should:

. Identify key buyers before the event and set up pre-arranged meetings.

. Actively engage in marketing efforts, such as giving speeches or participating in award programs.

. Prepare strong business models for pricing, sales support, and technical services to attract serious partners.

Successful companies do not see trade shows as the end goal, but rather the beginning of their global expansion journey.

Overseas Expansion Is No Longer a Choice—It’s a Necessity

With rising exchange rates and low domestic growth, global expansion is no longer an optional strategy—it is a survival and growth necessity. However, the goal should not be short-term profits from exchange rate gains, but rather building a sustainable global business model.

To overcome domestic market limitations and strengthen global competitiveness, Korean companies must:

. Diversify exports

. Mitigate risks by expanding into multiple international markets🔹 Conduct thorough market research

. Leverage global trade shows for networking and branding

Yet, expanding globally is not a one-time effort. Companies must focus on follow-up activities, localized marketing strategies, and long-term partnerships to secure their place in the global market.

Although exchange rate fluctuations create uncertainties, those who seize the opportunity to expand internationally will drive future growth. Now is the time for Korean companies to think beyond the domestic market and embrace the world.

(C)VM Consulting