Japan vs Korea: 7 Things European SMEs Must Know Before Expanding

Jan de Vries · 2026-10-27

Japan and the Republic of Korea (South Korea) both offer serious opportunities for European SMEs in healthcare, clean energy, and advanced technologies. But which market is the better fit for your business? With the EU-funded EU Business Hub – Japan and the Republic of Korea programme supporting European SMEs through targeted business missions, here are seven factors to consider before you expand. ### Different Investment Priorities Japan's energy transition is creating opportunities for European clean-tech suppliers. Under its Green Transformation (GX) strategy, the country aims to mobilise over ¥150 trillion (approximately $1 trillion) in public and private investment over ten years from fiscal year 2023, supporting renewable energy, hydrogen, and industrial decarbonisation. The Republic of Korea has strong electronics, semiconductor, automotive, and medical technology industries, offering opportunities for European suppliers of specialised components and advanced technologies. **For SMEs:** Identify where your solution fits into existing industrial supply chains. ### Ageing Populations Drive Healthcare Demand In Japan, approximately 29% of the population is aged 65 or over, creating demand for elderly care, rehabilitation, assistive technologies, and healthcare efficiency. 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. **For SMEs:** Both markets offer healthcare opportunities, but potential customers and applications may differ. ### 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. In the Republic of Korea, medical device distributors, manufacturers, research institutions, and technology companies may provide relevant entry points. **For SMEs:** Choose partners with access to your target customers and the technical capacity to support your product. ### Business Practices Require Preparation Both markets value reliability, product quality, and established business relationships. Decision-making processes, however, vary by company and sector. European SMEs should prepare technical documentation, evidence of successful applications, and a clear commercial proposition. Local-language support can facilitate negotiations and technical discussions. **For SMEs:** Focus on demonstrating measurable value rather than relying on generic market-entry presentations. ### Regulatory Requirements Differ Medical technologies face distinct regulatory frameworks. In Japan, the Pharmaceuticals and Medical Devices Agency (PMDA) reviews medical products, while 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. **For SMEs:** Assess regulatory requirements early. European certification does not automatically guarantee market access. ### Test Before Investing Entering either market does not 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. **For SMEs:** Validate your commercial proposition before making long-term investments. ### 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. This is where initiatives such as the EU Business Hub come in: they provide on-the-ground support and connections that can accelerate your market entry. > “Expanding into Asia is not just about market size; it's about finding the right partners and understanding local nuances. Programmes like the EU Business Hub are invaluable for SMEs.” – Jan de Vries, E-commerce Consultant In short, both Japan and Korea offer unique advantages. Your choice should align with your product, resources, and long-term strategy. With careful planning and the right support, European SMEs can successfully tap into these dynamic markets.