Japan or Korea? 7 Things European SMEs Must Know Before Expanding

Jan de Vries · 2026-10-27

So, you're a European SME eyeing Asia. Japan and the Republic of Korea both look promising, especially in healthcare, clean energy, and advanced tech. But which one is right for you? That's the million-dollar question, and there's no one-size-fits-all answer. The EU-funded EU Business Hub – Japan and the Republic of Korea programme helps European SMEs explore both markets through targeted business missions. Here are seven factors to weigh before you dive in. ### Different Investment Priorities Japan's energy transition is a big deal for European clean-tech suppliers. Under its Green Transformation (GX) strategy, the country plans to mobilize over ¥150 trillion (that's roughly $1 trillion) in public and private investment over ten years starting fiscal year 2023. The focus? Renewable energy, hydrogen, and industrial decarbonization. So if you've got a solution that fits, Japan could be a goldmine. The Republic of Korea, on the other hand, has strong electronics, semiconductor, automotive, and medical technology industries. That means opportunities for European suppliers of specialized components and advanced technologies. The key is to figure out where your solution fits into existing industrial supply chains. Do your homework. ### Ageing Populations Drive Healthcare Demand In Japan, about 29% of the population is 65 or older. That's a huge market for elderly care, rehabilitation, assistive technologies, and healthcare efficiency solutions. The demand is there, but so is the competition. The Republic of Korea became a super-aged society in 2024, with over 20% of its population aged 65 or older. Its advanced digital infrastructure creates opportunities in diagnostics, AI-enabled medical devices, and digital health. Both markets offer healthcare opportunities, but the customers and applications may differ. Know your audience. ### Local Partnerships Matter In Japan, European SMEs can explore partnerships with manufacturers, distributors, and engineering companies to reach customers and integrate technologies into established systems. It's all about who you know. In the Republic of Korea, medical device distributors, manufacturers, research institutions, and technology companies may provide relevant entry points. Choose partners with access to your target customers and the technical capacity to support your product. Don't just pick the first one who says yes. ### Business Practices Require Preparation Both markets value reliability, product quality, and established business relationships. But decision-making processes vary by company and sector. So don't assume what works in one will work in the other. European SMEs should prepare technical documentation, evidence of successful applications, and a clear commercial proposition. Local-language support can facilitate negotiations and technical discussions. Focus on demonstrating measurable value rather than relying on generic market-entry presentations. Show, don't tell. ### Regulatory Requirements Differ Medical technologies face distinct regulatory frameworks. In Japan, the Pharmaceuticals and Medical Devices Agency (PMDA) reviews medical products. In the Republic of Korea, the Ministry of Food and Drug Safety (MFDS) regulates medical devices. Clean-energy technologies may also require local certification or compliance with technical standards. Assess regulatory requirements early. European certification does not automatically guarantee market access. Don't get caught off guard. ### Test Before Investing Entering either market doesn't necessarily require establishing a local office immediately. Distributors, technology partners, and system integrators can provide access to customers and market knowledge. Trade exhibitions and B2B meetings help companies assess demand, understand technical requirements, and identify potential partners before committing substantial resources. Validate your commercial proposition before making long-term investments. Dip your toes in before you dive. ### Direct Engagement Makes the Difference Market research can identify promising sectors, but only direct discussions with potential customers reveal whether a specific technology meets their needs. That's where initiatives like the EU Business Hub come in. They facilitate direct engagement, helping you connect with the right people. So get out there and talk to your potential customers. It's the best way to know if you're on the right track. Expanding into Asia is a big step, but with the right preparation and mindset, it can be a rewarding one. Weigh these factors carefully, and you'll be better equipped to make an informed decision. Good luck!