The Korean market opened rapidly at the end of the financial crisis, from 1997 to 1998. Since then, international groups have poured into the fourth largest economy in Asia. However, many international groups have been trying to compete with local enterprises.
Wal-Mart, the world's largest retailer, and Carrefour, the French group, have both withdrawn from the Korean market, while other multinational companies such as McDonald's, Coca-Cola, Google and Nokia are struggling to compete in their respective markets.
Hank, industrial research and consulting consultant. Hank Morris said: "I think these big overseas companies misunderstood or underestimated the difficulty of entering the Korean market. Here, their popularity is not too high, but the names of their competitors are widely known by local people because of their association with various consortia. "
After losing money for two consecutive years, Wal-Mart agreed this week to sell its 65,438+06 supermarket in South Korea to Shinsegae, which is the market leader with a market share of 34%. Carrefour said last month that it would sell 32 supermarkets in South Korea to local fashion retailer Yilian in order to focus on the China and French markets.
The withdrawal of Wal-Mart and Carrefour was shocking to outsiders, but it had long been expected in South Korea because the performance of the two companies was mediocre. In the Korean retail market of $654.38+02 billion, Carrefour and Wal-Mart only account for 9% and 4% respectively, which are dominated by local retailers such as e-mart under New World and Lotte Mart under Lotte Shopping.
Lee Jung-jo of Risk Consulting Korea said: "These western companies stick to their own [management] methods and ignore local characteristics. Therefore, they try to apply the so-called global standards to the Korean market without understanding the needs of Korean consumers. I think this is the biggest reason for their failure. " Analysts warn that the Korean market is not so easy to make money for foreign companies who don't understand the complexity of the local market.
Coca-Cola Korea Bottle Company said: "These Korean companies are very agile. They quickly launched new products (reflecting changes in consumer tastes), but we launched new products late because we tried to maintain the original product portfolio. " However, the group said that its operating profit increased again this year after the introduction of new products such as green tea.
In addition, because it is difficult to compete with the local fast food chain Lotteria, McDonald's also reduced its business in South Korea. The latter's network scale in South Korea far exceeds McDonald's.
McDonald's said: "The Korean market is highly competitive and the catering industry is quite developed. We are constantly striving to transform our chain stores, because Korean consumers are obviously more willing to enjoy the atmosphere, not just food. "
In addition, global Internet search engines such as Google have also been left out by Koreans. Koreans like to search for information on local portals, such as Naver and Daum Communications in NHN. According to KoreanClick, a Korean network consulting company, Google's share in the Korean search market is only 1.5%, while Naver controls 70% of the search business, and Daum's market share is 12%.
Analysts said that Google failed to understand the needs of Korean Internet users. Domestic competitors such as Naver and Daum have rich Korean databases because they encourage users to post questions for others to answer.
Wayne, an analyst at Woori Investment Securities, said. Wayne Lee said: "The content created by such users is very powerful and hard to see in the US market. Google's search engine is good, but the ability of its Korean website is still limited. "
Nokia, the world's largest mobile phone manufacturer, closed its marketing business in South Korea because Korean companies such as Samsung Electronics and LG Electronics have strong market positions.
British prudent investment company. Woo Young-moo, head of securities research, said: "Meeting global standards is not enough. The Korean economy is quite developed, and consumers here are very picky. " (Translator/Chen Jiayi Liu Zhifeng, Financial Times Seoul Report)
Focus on design and brand.
Korean companies have successfully shaped the image of science and technology leaders. In fact, the key to success lies in successful marketing. Successful marketing means healthy marginal management, which is helpful to enterprise financing and R&D, which in turn will further support marketing.
Pay attention to users' needs and launch new products quickly.
Coca-Cola Korea said: "These Korean companies are very agile and launch new products quickly (reflecting the changes in consumers' tastes), but we launch new products late because we try to maintain the original product portfolio."
Typical case: the success of Samsung Electronics
In the past seven years, Samsung Electronics has staged the myth of digital business speed. It is no exaggeration to describe Samsung Electronics with adjectives such as flying into the sky and being as fast as lightning. Samsung Electronics, with its extraordinary running speed, constantly impacts people's psychological limits.
First of all, we should strengthen our own internal technical learning at the same time of joint venture, and regard joint venture only as a means of our own technical learning.
Second, vigorously introduce external talents and absorb external knowledge.
Third, the government gives a lot of subsidies and industrial protection.
It is difficult for China enterprises to copy the Korean model.
First of all, localization is only for products, not for developing technical capabilities.
The second mistake is only joint venture production without learning technology. Conclusion: Korean experience is worth learning from China.
South Korea's strategy of "small country and big enterprise" is quite successful, while China is the development model of "big country and small enterprise". China is a big country, but the enterprises in the global market are relatively small. This complementary feature of the two countries has enabled South Korea to maintain a living standard 10 times that of China. From many angles, South Korea's experience is worth learning from China.