Samsung”. The company is ubiquitous here, selling everything from life insurance to weapons. It even runs its own theme park. As Director goes to press, Samsung is poised to cement its position as the world’s second-largest tech brand by launching the Galaxy Fold smartphone. Matthew Cockerill is a design consultant who works regularly with South Korean tech clients, having spent two years with Samsung in Seoul. He notes that, while the UK is home to many early adopters, South Koreans are even quicker off the mark when it comes to bringing new technologies into the mainstream. The country is the world’s third-largest market for bitcoin, for instance. Samsung is one of about a dozen family-owned conglomerates, known as chaebols – including Hyundai, LG and Lotte Corporation – that have formed South Korea’s industrial base since the Korean war ended in 1953. Their ambitious spirit impressed Cockerill during his time in Seoul. “There’s a real sense of opportunity and progress,” he says. “Two decades ago, Samsung would manufacture products inspired by Sony, but produce them more quickly and cheaply to supply markets such as Japan. Today it’s doing the same thing and paying the same attention as Apple does to design. This approach has given it an edge.”
Although the chaebols have formed an oligopoly – Samsung alone accounts for more than 20 per cent of the total market value of the Korean Stock Exchange – it’s still feasible for British fi rms to gain a foothold here and thrive, according to Welch. “Samsung has announced that all its products will be built using artifi cial intelligence by 2020, while Hyundai is investing in future mobility,” he says. “As the UK is recognised as one of the global leaders in these fi elds, there are some fantastic opportunities.”
SUCCESSFUL ROLL-OUTS Interfl oor, a manufacturer of carpet underlay and fl ooring accessories based in Haslingden, Lancashire, is one British business to have broken through the chaebol barrier. The company, led by IoD member John Cooper, has been exporting to South Korea for more than two decades, with clients including Incheon Airport and Seoul’s Four Seasons Hotel.
“It’s sometimes positive to be a smaller player, but try to start with some big-name projects fi rst,” advises Interfl oor’s international sales director, Joffrey Godin.
Also, as Lazell notes: “Many chaebols have come from heavy manufacturing. They haven’t occupied fashion, beauty or homeware, which is probably why Koreans have been looking to the West in these areas.”
Boots, Jo Malone and BrewDog have all opened outlets in Seoul in recent years to satisfy local demand for cosmetics, fragrances and craft beers respectively (British beer sales to South Korea were worth nearly £60 million in 2017).
36
director.co.uk
95%
of adults in South
Korea own a smartphone – the highest proportion of any advanced economy, according to a study by Pew
Research in February.
South Korea has been no slouch itself as an exporter in recent years. The sophisticated dance routines and sharply coiffed hairstyles of K-pop’s big artists have inspired a global youth movement. Welch notes that one of DIT South Korea’s most well-received tweets contained the “BTS” hashtag. Korean food such as kimchi is now widely stocked in British supermarkets, while K-beauty – whose products feature ingredients such as snail mucus – has gained A-list adherents including Emma Stone and Lady Gaga. Such developments are no fl uke: hallyu (the Korean wave) has been supported by government ever since it decided to invest heavily in its creative industries after the pan-Asian fi nancial crisis of 1997.
“South Korea is a regional trendsetter,” Welch says. “If a product makes it big here, it’s likely that other countries in Asia Pacifi c will consider it cool too.” British fi rms are naturally keen to exploit this trend. Having noted that many Chinese tourists visit Seoul on weekend shopping trips, Denby is planning to expand to China by the end of the year.
TALENT SPOTTING South Korea offers a highly qualifi ed talent pool for incoming foreign fi rms. Nearly three-quarters of its citizens are educated to
Left: the smartphone is ubiquitous in the ‘Republic of Samsung’, which activated the world’s first 5G network in April, pipping the US by a matter of hours. Right: video gaming rooms, known as ‘PC bangs’ abound in Seoul
WISE KOREA MOVES
Experts offer cultural tips for doing business in South Korea
MEETINGS AND GREETINGS
Mass ritual bowing may be popular north of the border in Pyongyang, but all British entrepreneurs need to do when greeting their South Korean associate is “a slight bow, followed by a slight handshake”, according to Welch. When you’re exchanging
any object, including a business card, you should always use both hands.
CONFUCIAN REIGNS “Koreans come from a Confucianist society, where hierarchy is important,” Cockerill says. This explains the structure and deferential culture of the chaebols, which means that British suppliers dealing with them “may find it hard to get people lower down in these organisations to
make decisions. The only person whose opinion matters is the boss.”
GIVE (UP) GIFTS
Although gift-giving is integral to Korean culture, recent corruption scandals have meant that it’s disappearing from business life. “Today, Korean companies are almost petrified of giving or receiving gifts, lest it be perceived as a bribe,” Welch observes. “I’ve been in meetings where
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