Philippines Export Strategy: 3 Essentials for Korean Businesses

Hello, we are Toms Corporation, a specialized export agency for the Philippines.

The Philippines is one of the fastest-growing markets in Southeast Asia, offering numerous export opportunities for Korean companies. It is a vast market with a population of 120 million, a young population with over 30% being young adults, and a dynamic market growing at 7% annually.

However, due to the Philippines' extremely complex and slow administrative system, Korean companies face significant time and cost burdens when expanding into the Philippine market. Despite the market's attractiveness, Korean companies' entry has been limited. Entering the Philippine market requires Korean companies to overcome several crucial steps and preparations.

1. Obtaining Philippine FDA Certification

To export food, cosmetics, and medical devices to the Philippines, you must obtain certification from the Philippine FDA. This is essential to ensure product safety and quality and to carry out formal import procedures in the local market. However, obtaining FDA certification can be a time-consuming and complex administrative process for exporters to handle independently.

First, you need to be qualified to apply for certification registration with the Philippine FDA (LTO). Generally, only local companies can register, and Korean companies must establish a local corporation if they wish to do so. There are many other requirements for obtaining an LTO, but we will omit them from this article. After going through all these steps, you must register with the FDA to obtain a CPN, CPR, etc. The registered products can be verified here.

Due to safety concerns, the Philippine FDA's verification process is becoming increasingly stringent and complex, with more and more technical requirements. Without expertise, it can consume a great deal of time, money, and effort. Utilizing a local certification, customs clearance, and IOR specialist, such as Toms Corporation, is a far more rational and efficient approach in any respect.

Toms Corporation directly operates VAVLON Inc., an import/export corporation in the Philippines. We are not a third-party outsourcing company that is difficult to trust. Our export/import experts with over 30 years of experience handle all product categories directly, and we hold all the necessary licenses for FDA and customs clearance.

Exporting companies can focus on delivering quality products to the Philippines, leaving all administrative procedures to us.

2. Legal and Formal Customs Clearance Procedures

To secure legitimate distribution channels in the local market and ensure sustained product sales growth, compliance with legal and formal customs clearance procedures is imperative.

However, there are still many instances where goods are illegally brought into the Philippines through gray channels, also known as 'blind customs clearance'. Gray channels allow products to be brought into the local market at lower costs compared to formal customs clearance. It reduces the time and cost involved in taxes and other administrative procedures.

However, the associated disadvantages and risks are substantial. It is difficult to secure legitimate distribution channels, and it is not conducive to company growth in the long term. Furthermore, the Philippine Customs is emphasizing corruption eradication and is becoming increasingly modernized, leading to a consistent increase in detection rates. In the event of detection of gray channel imports, the product will be blacklisted, prohibiting re-entry and making sales in the Philippines impossible. This can result in various penalties.

Toms Corporation possesses a legitimate import permit issued by the local Customs and is a member company of the Philippine Korean Business Association. In the event of a problem, we can leverage various channels to provide the fastest and most efficient solutions.

3. Securing Local Sales Outlets

Securing local sales outlets is crucial for entering the Philippine market. Toms Corporation has established various partnerships to help Korean companies achieve rapid growth in the Philippine market. We provide support to Korean companies to secure optimal sales outlets in the Philippine market.

Even without a sales outlet, once you obtain certifications such as FDA through Toms Corporation, we can initiate the buyer matching process.

1) Matching with Local Wholesale Companies

All certification procedures are now complete, and you are fully prepared to enter the Philippine market legally. Korean products are popular in the Philippines, and major wholesale companies frequently inquire about high-quality Korean products.

Through Toms Corporation's distribution network, you can supply to major wholesale companies, enabling rapid product promotion to various retailers in the Philippines.

2) Matching with Local Large Shopping Malls

To build further trust, strategic entry into major local shopping malls can be pursued. While it may involve higher costs, it can contribute to the premiumization strategy for the product.

3) Entrusting Local Online and Offline Sales

Sales can be entrusted through local online and offline channels through Toms Corporation. Detailed information will be provided upon consultation.

Toms Corporation is committed to supporting the successful entry of Korean companies into the Philippines. For more detailed information on our services, please visit the Toms Corporation website.

We also offer free consultations through KakaoTalkby clicking the box below. Please feel free to contact us with any questions or inquiries.

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