More than K-Pop: South Korean companies are also making waves in ASEAN
Trade & Investments
07 Apr 2025
4 mins read
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More than K-Pop: South Korean companies are also making waves in ASEAN
Increasing investments from South Korea into the region is a long-term, win-win upward trend that will continue to benefit both.
The green soju bottle is a familiar sight in many South Korean dramas. From plum and peach to grapefruit and green grape, the fruity flavours, served refreshingly ice-cold, have been guzzled down in tropical Southeast Asia.
Now, the region is not just seen as a consumer market, but also a thriving production centre. Sometime in mid-2026, a factory in Vietnam’s Lien Ha Thai Industrial Park will start producing 30 million bottles of clear fermented rice wine a year.
The soju factory, situated just south of Haiphong City, is alcohol giant HiteJinro’s first overseas investment in 100 years. The facility is part of the company’s 2030 ambition to raise its revenue from soju sales – led by its flagship brand Jinro – to more than US$350 million, which is three times its revenue from 2024.
The company is planning to use the Vietnam plant as a base to expand into other parts of Southeast Asia. And it is not the only Korean company to see the region as a key growth market.
The region is already familiar with Korean brands such as Samsung, LG, and Hyundai establishing themselves as household names. But newer and smaller companies like Jinro are setting their sights on moving south, as the region prepares to receive a second wave of all things Korean.
Breaking out into the world
Southeast Asia has always been a key market for South Korean companies. ASEAN is South Korea’s second-largest trading partner, with the two-way trade volume reaching US$208 billion in 2022, up from US$147 billion in 2017. In 2023, South Korea ranked sixth in terms of foreign direct investment (FDI) inflows into ASEAN, at a value of US$10.9 billion.
A big part of the reason is simple economics. South Korea’s GDP growth has been slowing in recent years, expanding just 1.4 per cent in 2023 and 2 per cent in 2024, with the trend likely to continue this year. As with any developed country, South Korea also has an ageing population, with one in five residents aged 65 and above.
In contrast, Southeast Asia, with its population of about 700 million, promises a booming market. GDP growth for some of its top economies is projected to be above 6 per cent in 2025.
UOB launched its 11th Foreign Direct Investment (FDI) Advisory Centre in Seoul on 27 March 2025, in support of South Korean companies seeking to expand into Southeast Asia. Photo: UOB
The South Korean government has also recognised this. In 2017, the previous government under South Korean President Moon Jae-in introduced the New Southern Policy to promote further ties between South Korea and ASEAN. This has since evolved into the Korea-ASEAN Solidarity Initiative (KASI). ASEAN and South Korea have also signed the ASEAN-Korea Free Trade Area, which eliminates tariffs for 80 per cent of the goods traded between ASEAN and Korea. It is no wonder that 90 per cent of Korean production facilities in the pipeline are being built overseas, based on a recent report by The Korean Economic Daily.
But for many companies, it is the ASEAN consumers and their growing taste for Korean products that represent the greatest opportunity. Over the past two decades, consumption of Korean culture such as K-drama and K-pop has surged. More recently, the rise of reality television in the form of Netflix programmes such as Physical: 100 are also proving to be hits in the region.
These developments have provided the impetus for smaller companies from South Korea to follow the trend. Athleisure wear company Andar, for instance, recruited Physical: 100 winner Woo Jin Yong to promote its products in Singapore and the region.
In fact, for many South Korean companies, Singapore has been useful as a springboard into ASEAN’s market – South Korea’s investment in Singapore increased by 110.6 per cent in 2024, compared with 2023. There are more than 1,000 registered South Korean companies in Singapore.
Success in the long haul
Apart from exports of lifestyle products into the region, the second Korean wave into ASEAN is also marked by active Korean investment into the region. The annual average of South Korea’s investments in ASEAN nearly tripled from US$3 billion in the period 2006 to 2015, to US$8.7 billion in the period 2016 to 2023.
Much of this investment has been channelled towards Vietnam, which has emerged as a key production destination for many South Korean manufacturers such as Samsung, SK, LG, Lotte, and Hyundai.
But Singapore is quickly emerging as a key destination for many South Korean companies looking to develop research and development. Hyundai Motor’s assembly plant in Singapore has started rolling out the electric car Ioniq 5.
The company’s Innovation Center in Singapore also exemplifies how ASEAN can function as an innovation and research hub. The Center is working with local agencies and talents on a Corporate Lab, collaborating with local institutions on research and development.
Likewise, activity on the digital landscape front is also heating up. ASEAN’s digital economy is poised to grow to US$2 trillion with the Digital Economy Framework Agreement (DEFA) – something South Korean tech companies are keeping close tabs on. Internet conglomerate Naver, for example, works extensively with local companies in the region to grow its communication app Line.
For example, Line Man, a spin-off from Line, and Thai restaurant review platform Wongnai, have merged to form Line Man Wongnai, a food delivery app that has since expanded beyond food into financial services, ride-hailing services and more.
Not a one-size-fits-all approach
The challenge, however, lies in the details, where South Korean companies must navigate the nuances of the local market. One-size-fits-all is not viable in ASEAN. Countries are in different stages of economic development, and markets in the region are highly diverse.
This is where local partners like UOB assist with their knowledge, communicating effectively through regional desks that serve as a bridge between new Korean entrants and domestic partners. The result could be like Line Man Wongnai, which is gearing up for an initial public offering later this year – a blend of Korean expertise and local knowhow that stands out.
South Korea’s investment in ASEAN is a long-term, win-win upward trend that will continue to benefit both the country and the region. From the manufacturing sector to lifestyle companies, ASEAN’s expanding consumer market, growing talent pool, and untapped local resources are highly attractive to Korean capital.
Like a chilled glass of sweet, crisp soju, the second wave of Korean investments could satiate a region that is thirsty for growth.
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About the author
Sam Cheong
UOB
Sam Cheong is the Head of Group Foreign Direct Investment Advisory, UOB.
