This commentary explores trends impacting Korea facing business. South Korea moves fast. Government mandates shift often and Korean technology leapfrogs. Against this backdrop, a few developments are notable.
 |
| Don Southerton |
1. South Korea's economy
The current flat economy may level out in the first half or early part of the second half of 2019. As in 2018, and hopefully going into the new year, strong export growth will continue to offset the contraction in domestic consumption and prop up the economy. (BTW South Korea based auto exports were down as production is now distributed more global for the Hyundai Motor Group. In Korea tech and semiconductors production, for example, as the main drivers of exports.)
As always when there is a discussion on the Korean economy, jobs matter-- more so despite the efforts of President Moon and the administration. His push for a “fair economy” has yet to create more jobs within the Small to Medium Enterprise (SME) sector. This means the chaebol will be called upon to boost hiring.
Update
No sooner have shared….And predicted in this 2019 Commentary, then South Korea president appears to be expanding communication channels to win backing from the country's leading industrial conglomerates including Samsung, LG, SK and Hyundai, which had been branded as "deep-rooted evil" by Moon years ago.
2. South Korean Consumer Behavior
Another valuable insight when looking at South Korea is that, much like in the Americas and EU, brands are considered representative of the consumer. As I point out often—a brand can differentiate and indicate the social status of an individual. Superstars, influencers and key tastemakers and their fashion and buying decisions hold massive influence over a majority of South Korean consumers and their decisions and endorsements can strategically determine the fashion and buying trends of the season.
Bottom Line Middle to upper-class South Koreans are well-connected, informed shoppers with special interests in quality, luxury goods. I do not expect this trend to change.
3. IT and Technology
As one of the world leaders in IT infrastructure and high-speed technology, over 98% of South Korean households access the Internet regularly, with over 85% of the population owning a smartphone. Additionally, over 97% of 18 to 24-year-olds actively use their mobile device every day.
Looking back, the most dramatic Korean technological shifts have often occurred in tandem with government mandates. As an example, I witnessed in the mid-2000s considerable accolades for the City of the Future, the $40 billion Songdo International District. The developers made huge Ethernet investments tied to the IoT (the Internet of Things).
Infrastructure, buildings, and residences were hard-wired with a “state of the art” Cisco-partnered Internet service.
No one foresaw that government-supported Korea telecom providers SK Telecom, KT and LGU+ would leapfrog and provide ubiquitous high speed 4 G Wi-Fi and South Korea developed WiBro, overshadowing the need for Ethernet technology.
Bottom Line
Fast-forwarding to 2019, we will find the emerging 5G market again driven by SK Telecom, KT, and LGU+with ambitious Internet of Things, Robotics & Automation, Virtual Reality, and self-driving vehicles.
At least in Korea, IT and technology infrastructure need the ability to adapt to what will be the next developments by both private industry and government in regard to the 5G landscape and smart tech leaps.
4. Transportation
Looking forward, I feel confident in several transportation developments that will impact customers and infrastructure. In other words, how Korean customers may choose to travel. We cannot underscore enough the fact that the automobile industry is undergoing a massive disruptive mobility shift from the past 90 years.
The first trend is eco-friendly autonomous (driverless) car and bus transportation.
Tied to this, like in America, Seoul and the surrounding area we have seen substantial growth in rideshare services. By 2022 or sooner we can expect to see the next generation of these services—autonomous car share transportation.
Even more timely, testing is currently underway for Korea’s popular SoCar ridesharing app. After picking up and dropping off customers, the cars park themselves before moving to the next person requesting service. The cars are modified models of Hyundai luxury brand Genesis G80 and Hyundai’s electric vehicle Ionic, as well as Kia Motors’ electric Ray and Niro.
With the support of The Ministry of Transportation, the SoCar driverless autonomous partnership includes SK Telecom (part of the SK Group and Korea’s third-largest chaebol) and the Hyundai Motor Group. Both chaebol have made substantial investments in both autonomous and in rideshare.
SK Telecom has noted that the cars were designed to pick up the closest call and move to their destination utilizing SK’s artificial intelligence (AI) navigation.
5. A final development that will impact South Korea is hydrogen-powered vehicles—, especially for bus transportation.
1000+ hydrogen-powered buses are slated to hit the road in South Korea by 2022, starting with five cities, including Seoul.
A mix of movable charging stations, as well as fixed charging stations, are planned to meet the demand for hydrogen.
In addition, 310 charging stations for hydrogen-powered cars are expected to be installed by 2022. The latest measure is in line with the government’s plan to provide 15,000 hydrogen-powered cars by 2022.
As a caveat, we can also expect to see a range of autonomous buses in use, some of which are already in service.
In Closing…
Again, as always I understand the team’s need to address current milestones. That said, based on my engagement in Korea for decades, one lesson learned is that Korea moves fast. Government mandates shift often and Korean technology leapfrogs. We just need to stay attuned to changes ahead.
No comments:
Post a Comment