Travel Reference
In-Depth Information
Government and private-sector efforts to diversify South Korea's manufacturing-dependent
economy have borne some fruit. Its top-notch broadband infrastructure and tech-savvy
young population have made the country an important production site and test bed for anim-
ation and online gaming, which, by some accounts, up to a third of the population engages
in regularly. The explosive popularity of smartphones has also seen a surge in the mobile
app development industry, and a few homegrown apps, such as messaging service Kaka-
oTalk, have made a splash internationally.
Perhaps the biggest (and largely unexpected) triumph has been the rapid spread of South
Korean pop culture. Long admired in Asia, thanks in no small part to the power of social
media, South Korean films, TV serials, and music have recently garnered a truly global fan
base, with “K-pop” concerts and flash mobs now a semi-regular fixture in Europe and North
America. This has further bolstered the country's already growing tourism industry as eager
fans flock to South Korea to check out video and film sets or their favorite stars' haunts.
More than a few foreign companies have learned the hard way that the economic realm is
where South Korea's nationalist instincts most regularly assert themselves. While success-
ive governments have begun to chip away at them, plenty of seemingly arbitrary rules exist
that limit or bar foreign participation in key industries. One example was a (since repealed)
requirement that all mobile phones sold in the country use a homegrown standard, which
significantly delayed the debut of Apple's iPhone in the South Korean market—in order,
some cynics whispered, to give Samsung time to catch up.
Foreign businesses also often find themselves scrutinized more carefully than their local
partners by the government, the media, and the public. Attempts to take over or “restruc-
ture” local companies are frequently viewed with suspicion—as U.S. private equity firm
Lone Star found out, after having to extricate itself from the country after buying, then mov-
ing to profit from the sale of, Korea's main foreign exchange bank, a struggle that lasted
years. Other market entrants have had difficulty dealing with the country's frequently act-
ivist unions.
That being said, plenty of foreign companies are highly successful in South Korea—the
proliferation of fast-food chains alone is evidence of that—and Koreans can be highly ad-
aptable when it comes to new products or new ways of doing business. The companies that
have flourished here have found a sensitive public relations strategy and a little cultural
awareness go a long way.
