When we think about Korea, the first things that came to mind would be their drama, pop stars, soccer team, Samsung, LG and Hyundai. Korea has slowly gained competitive market share over the Japanese, especially in the realm of electronics.
I think there were only a few flights to Seoul from Singapore – SIA, Korean Air and Asiana. SIA charged S$1,200 which is about $200 more than the cheapest Korean Air. I chose SIA for the reputable safety and service standards.
Cho Yang-Ho is the chairman of Korean Air. He is the 31st richest in South Korea with $520m.
[Free Ebook] How should you invest your first $20,000?
We asked 14 Singapore finance bloggers to share what they would do if they could go back in time and invest their first $20,000. They can no longer rewind time, but you can learn from their experience and hopefully start with a better footing.
Getting around – Seoul Subway Metro
Seoul has an extensive network of subway lines. It is quite confusing as there are 8 lines, and some stations can have 3 lines intersecting. I pretty much traveled on trains 90% of the time. The lines are complicated to the point that I see Koreans referring to the map time to time. Even the locals cannot remember the stations and their connections. Like Singapore, the stations are filled with retail shops and connected to adjacent shopping centers. Seoul is in turn connected to other Korean cities by railway, operated by Korail. Below is a picture of a typical subway walkway littered with retail shops.
The biggest corporation in South Korea by market capitalisation would be Samsung. Most people will be familiar with the electronics products but Samsung Electronics is just a division of the conglomerate. Besides Electronics, the Samsung Group have businesses in ship building, engineering, construction, life insurance, investment banking, theme parks, hotel chain, marketing, medical and IT services. Samsung accounts for a fifth of South Korea’s exports and has a revenue larger than some countries’ GDP.
Looking around my household, I notice a few Korean products. I have 2 Samsung refrigerators and 1 Samsung 21.5″ LCD monitor. I even remembered when I was a kid, I used to record TV shows. At that time, Sony was the dominant brand, but I was handling this unfamiliar brand “Samsung” VHS tapes. That was my first exposure to the Korean brand and who knew they grew to a giant over the years.
The richest man in South Korea is Lee Kun-Hee, the reinstated Samsung chairman, with $7.9b.
Hyundai is the next giant conglomerate giant in Korea. Hyundai Heavy Industry is the biggest shipbuilder in the world. Hyundai Kia Automotive Group is the largest car maker in Korea and second in Asia. The company also dips its toes in retail and operates the Hyundai Department Stores. I observed many of the elevators and subway gates bear the name of Hyundai. It also have insurance and underwriting services. By the way, I drive a Kia which I find it cheap and good. Hyundai Motors Office in the picture below.
Chung Mong-Koo is the chairman of Hyundai Motor Group, and is the second richest man in South Korea with $4.1b.
I just learned that LG was a merger between Lucky and Goldstar, and that was how the acronym was derived, even though the company associates with the slogan “Life’s Good”. LG is also dominating the display market, probably after Samsung. For your information, I am typing this post with a LG laptop and it is still working well after 3 years of heavy usage. I was utterly impressed when I watch “Transformers 3” in South Korea. I went to Times Square’s cinema, CGV, to catch the movie and I believe the screen and projection were made by LG as shown before the show. The 3D effect was mind blowing. The explosion really approaches you to the point you can grab the fragments with your hands. We have nothing close in Singapore cinemas.
Koo Bon-Moo is the chairman of LG Group. He is 11th richest in South Korea with $1.25b.
As I research more about the cinema, CGV, I learned about the CJ Group. CJ Group is another conglomerate that have 4 main businesses – Food, Logistics, Entertainment and Pharmaceutical. CJ GLS is a logistics company and has a branch in Singapore. I remember the logo to the point I had deja vu moments when I see their trucks in Korea. CGV is known as CJ Golden Village. If you are wondering if there are connections to our biggest cinema chain in Singapore, you are right. Golden Village is jointly owned by Hong Kong’s Golden Harvest and Australia’s Village Roadshow. In Korea, CJ is the third partner operating the chain in Korea.
Lee Jay-Hyun is the chairman of CJ Group. He is 17th richest in South Korea with $800m.
Lotte is another conglomerate. Korea is never short of one. It has food, retail, financial services, heavy chemicals businesses and more. I usually expect McDonalds to be the dominant fast food chain in any country but to my surprise, Lotteria is a commonplace in Korea, and it is quite crowded at all the branches. I filled my meals with traditional Korean food and had no room for fast food so I did not try it. Below is a picture of the many Lotte shopping centres.
Shin Dong-Bin is the vice chairman of Lotte Group and CEO of Lotte Shopping. He ranked 6th richest in South Korea with $1.6b.
Google is not the champion search engine in Korea. The global search giant has its limits in a country with her own language. Naver has 70% Korean market share in search and Google with a mere 2%. I noticed this when I saw an email given by a supplier with @naver.com and I subsequently see it online while surfing on the free internet terminal at the cinema.
Yongsan Electronics Markets
I went to the Yongsan Electronics Markets and expect to find state-of-the-art IT products at cheap prices. It was touted as the largest electronics retail place in Korea. I was pretty disappointed to find older models there while prices are comparable to Singapore. There was no Samsung Galaxy Tab 10.1 in Korea even though it was launched in US in Jun. The entire place was quite empty, maybe because it was a weekday.
My partner and I was trying to connect our phones to the local network but to no avail. After searching the internet, we found that we need on our 3G connection. My partner had an iPhone and she connected without problem. I was using a 2G phone and hence, was not able to connect at all. Most, if not all, Koreans use a 3G smartphone. Compared to Singapore, there have less iPhone users and more Samsung users. Not surprising afterall.
Chey Tae-Won is the Chairman of SK Group, a telecom provider. He is 10th richest South Korean with $1.3b.
Korea is famous for cosmetics. My partner’s friends asked her to buy truckloads of facial masks as they are cheaper there. The competition is fierce since almost every corner of the street or building has a cosmetics shop. It is as ubiquitous as convenience stores in Taiwan and Hong Kong. I see Face Shop, Skin Food, Etude, Tony Moly and Innisfree.
Suh Kyung-Bae is 12th richest in South Korea with $980m. He is the boss of Amorepacific which owns Etude and Innisfree.
Lock & Lock
Whenever we went to dine at a Korean restaurant, we will be given a bottle of plain water. The bottle is usually made by Lock & Lock. This brand is widely used in Singapore as well based on my observation.
Kim Joon-Il is founder of Lock & Lock and is the 26th richest in South Korea with $590m.
Nicknamed the “Miracle of the Han River”, South Korea had an exponential growth in its economy after the Korean war. It has no natural resources and relied heavily on exports to grow its economy. Despite having many years of peace after the war, the relationship with North Korea is still volatile and the underlying tension is ever present. Any outbreak of war or escalation of tension would have impact to its economy. Being export dependent would also mean they would be subjected to fierce competition from China, which the latter can produce goods at a cheaper price. We see it when Japan beat US to electronics and automotive market. Subsequently, South Korea is catching up with Japan in those areas. China would likely surpass all of them in the near future. Another characteristic of South Korean business is that they are usually run by family members. Samsung chairman Lee Kun-Hee has 2 prominent daughters running some of his Samsung groups. Likewise for Hyundai and many other big conglomerates. There is a Chinese saying, “富不过三代”, which means the wealth in the family cannot last beyond 3 generations. There is a danger of showing favoritism to family members in succession plans as it discourages meritocracy. An outsider can be more capable of leading the company than a close family member but would not have the opportunity simply because of his relationship.