World’s leading IT nation’s restrictive market…
Korea is a renown leading nation in the tech world. As shown in the statistics on the left, Korea has the world’s fastest internet and two leading smartphone manufacturers. However, foreigners are not quite aware of the restrictive market in Korea.
쇄국정책 <Closed-Door Policy>
In the 1800s, Korea was well known to the foreign nations with the notorious closed-door policy. The Korean government restricted foreign merchants and missionaries to settle in the nation. This policy was known as the 쇄국정책 <swae-gook-jeong-chek> or the closed-door policy.
Although Korea is an open market in the modern times, foreign companies failed to thrive and often withdrew their businesses. The following cases are worldwide companies that struggled in Korea.
hTC K0rea: 2008.7 ~ 2012.9
HTC is a renown Taiwanese smartphone manufacturer. Although the company is struggling to prosper with competitive manufacturers, HTC still produces top-notch phones such as the HTC One M9. However, the company failed to survive in the Korean market. Now we cannot see HTC phones in Korea.
Yahoo Korea! 1997.6 ~ 2014.4
In 1997, Yahoo established its seventh international company in Korea. At the time, Korea’s internet market was just beginning to develop. Yahoo quickly gained popularity as the company provided free email and search engine for the nation. However, as other domestic companies began to rise such as Naver, Yahoo lost its competition in the market. Later in 2012, Yahoo decided to close down kr.yahoo.com and yahoo.co.kr. This was another case of a foreign company’s struggle in the Korean market.
Motorola 1988 ~ 2012
Another case of a foreign company’s withdrawal in Korea was Motorola Mobility. Motorola began its business in Korea in 1988 with partnership between telecommunication companies. The company had its golden time during 2006 with the phone “Razr” (image above). However, Motorola withdrew from Korea in 2012 after struggling to maintain popularity.
Korea, a grave for foreign companies?
With the exception of Apple, foreign companies struggle to thrive in Korea. From 2010 to 2012, four foreign smartphone manufacturers withdrew from Korea. This was an unfortunate case as this restricted customers solely to domestic cellphones and Apple. The continuing withdrawals of foreign manufacturers led the Korean customers to refer their own nation’s market as a “Grave for foreign companies, 외국기업의 무덤”.
The ultimate question to a situation like this is, “Why?” What is the reason for these companies to fail in succeeding in Korea? Although this matter cannot be answered in a black and white manner, I speculate there are two reasons. One is the hindrance of being certified by the government. Every year when foreign companies release a smartphone, it takes a lot of time for it to be sold in Korea. The certification process by the government to allow the phone to be sold takes a long time. The second reason is the lack of acceptance to the foreign goods by customers and companies. Even when the foreign manufacturers had better products, Korean customers were often inclined to buy domestic goods from Samsung and LG. This usually happened because of a partial marketing of the telecommunication companies.
Korea is a leading nation in the tech world. However, Korean companies have been recently struggling to maintain popularity and sales against Chinese companies. For the Korean companies to thrive, I believe it is important to have a less restrictive market. It is impossible to have the withdrawn companies to reattempt in surviving the Korean market. However, in the later future, it is important to have foreign companies to be equally supported as this will benefit the domestic customers and companies.
image source: en.wikipedia.org, blog.skbroadband.com, global-conferences.eu
– Bright Chong –