Category: Korea-Business

According to the article ramen sales up this year because of the hit Korean movie “Parasite”. I think it probably has more to do with people eating out less or facing quarantine because of the coronavirus:

Exports of Korean instant ramyeon have sharply increased this year.

According to industry data and the Korea Agro-Fisheries and Food Trade Corporation, ramyeon exports in the first eight months jumped 36-point-seven percent year-on-year to 405 million dollars.

The figure has more than doubled over five years between 2014 and last year.

By country, shipments to China, the biggest importer, increased 45 percent from January to August to top 105 million dollars.

During the same period, exports to the U.S. also rose 56 percent and to Japan by 48 percent.

Ramyeon exports to Southeast Asia are also on a rapid rise thanks to the Korean Wave phenomenon known as Hallyu.

KBS World Radio

You can read more at the link.

Another source of technology to China’s Huawei is about to be closed:

After U.S. Secretary of State Mike Pompeo’s request for countries to join Washington’s move to restrict the direct or indirect use of U.S. technology by Huawei, its top Korean suppliers are rethinking their partnerships with the Chinese tech company.

Pompeo said in a press statement Aug. 17 that Washington urges its allies and partners to join its anti-Huawei campaign. 

“The Department of State strongly supports the Commerce Department’s expansion of the Foreign Direct Product Rule, which will prevent Huawei from circumventing U.S. law through alternative chip production and provision of off-the-shelf (OTS) chips produced with tools acquired from the United States,” Pompeo said in the statement.

The Commerce Department also added 38 Huawei affiliates to its Entity List, which identifies foreign parties prohibited from receiving certain sensitive technologies, while allowing Huawei’s Temporary General License (TGL) to expire. 

The United States has provided ample time for affected companies and people ― primarily Huawei customers ― to identify and shift to other sources for equipment, software and technology and wind down their operations, the statement said, adding, that time was up.

A few weeks after the statement, industry officials said Huawei’s top Korean suppliers ― Samsung Electronics, SK hynix, Samsung Display and LG Display ― were rethinking their partnerships with the Chinese firm and suspending sales of memory chips and high-end smartphone panels for use in its consumer products.

“Amid the tightening rules on Huawei by the Trump administration, there’s no option but to temporarily suspend the sale of components to Huawei,” a high-ranking industry executive told The Korea Times.

Huawei buys “billions of dollars” of memory chips and display panels annually from Samsung Electronics, SK hynix, Samsung Display and LG Display. The suspension of trade will be effective from Sept. 15, the day a new set of rules limits dealing with the Chinese company.

Korea Times

You can read more at the link.

Congratulations to Samsung on winning this huge contract:

Samsung Electronics signed a 7.9 trillion won ($6.6 billion) deal to supply network equipment to U.S. telecommunications company Verizon, the Korean IT firm disclosed Monday in a public filing.

Under the contract, Samsung Electronics America will provide equipment, including for 5G connections, to Verizon for five years through December 2025. By volume, it’s the biggest single supply deal for network equipment ever secured by a Korean company.    

Samsung had worked with domestic mobile carriers last year to make Korea the first country to commercialize 5G connections. After 5G debuted April 2019, the company has signed network equipment supply deals with major telecommunications operators, including Canada’s Videotron, the U.S.’s Cellular and New Zealand’s Spark.   

Joong Ang Ilbo

You can read more at the link, but hopefully Samsung continues to beat out contracts over Huawei, their main Chinese competitor. ROK Heads may remember that Huawei has been accused of spying on behalf of the Chinese communist party.

Ultimately the coronavirus is going to be a good thing for big business that can survive the restrictions because many of their small business competitors are going under:

Small businesses are being devastated by the pandemic, with the mom-and-pops, restaurants, travel agencies and similar establishments going out of business at a rapid rate, according to recent statistics.    
   
The situation is set to worsen as the government over the weekend has extended the social distancing orders that have hit food-and-beverage outlets especially hard.      
   
Many small businesses were already on the ropes before the pandemic, and the crisis has made an already bad situation worse. Owners are becoming desperate, with at least one suicide being reported related to the financial stress faced by a small business operator.      
   
The number of small shops in Seoul dropped 5.4 percent in the second quarter when compared to the first quarter, according to a report by Budongsan 114 based on a study by the Small Enterprise and Market Service (Semas). The total reported was 370,321, meaning 21,178 small stores that existed at the beginning of the year are now gone.  
   
Over the same period, 10,040 restaurants went out of businesses, a 7.5 percent decline on quarter. The number of hair salons dropped by 3,473 stores, a 5.1 percent decline. In the travel agency, leisure and entertainment — which includes noraebang, or singing rooms — and computer cafe category, 1,260 businesses shut for good, a 10.8 percent decline. 

Joong Ang Ilbo

You can read more at the link.

It looks like the deal to acquire Asiana Airlines may fall through because of the ongoing pandemic:

Hyundai Development Company’s (HDC) planned takeover of Asiana Airlines appears to be on the brink of collapse, following the former’s official request for another round of due diligence on the cash-squeezed air carrier, aviation industry officials and analysts said Monday. 

HDC is putting the blame for the delay in negotiations on Kumho Industrial, which had decided to sell its airline unit, claiming that the latter has failed to send formal data related to the carrier’s financial status, despite repeated requests since early April.

This was seen by some industry officials as HDC making excuses in preparation for abandoning its planned acquisition of the indebted carrier, while others speculated that HDC may be moving to reduce the price.

Korea Times

You can read more at the link.

Will any ROK Heads be rushing to the store to buy this new Kellogg’s cereal?:

Kellogg Korea’s latest release, Chex Green Onion is stirring up the Internet even before hitting the shelves.

Kellogg Korea uploaded a 6-second-long video on June 17 on its YouTube channel, recruiting 50 people to try its newest product before its release. The video showed chopped green onion being sprinkled on chocolate flavored Korean cereal Chex with milk with background music with the lyrics “sorry, sorry, sorry” by trot singer Tae Jin-ah.

Korea Herald

You can read more about the cereal at the link.

This is a pretty prestigious recognition for Coupang:

Coupang is No. 2 on the 2020 CNBC Disruptor list.  
   
It is the first Korean company to make it onto the list, which has been published by the U.S. business channel since 2013. Coupang was also the first Korean company to be nominated.  
   
Each year, the broadcaster identifies 50 private companies with breakthroughs influencing business and market competition. All private, independently owned start-up companies founded after Jan. 1, 2005 were eligible to be nominated this year.  
   
Coupang was ranked No. 2 from a total 1,355 nominees selected by the station and a board of advisors.    
   
How the companies reacted to the coronavirus was key in the selection process this year. CNBC gave credit to the retailer’s fast delivery service, and its effort to replenish necessities, such as face masks and hand sanitizers, during the pandemic.    
   
The American broadcaster ranked Coupang high on the list considering its ability to withstand a rush of online orders during the virus outbreak while maintaining its quality delivery service. CNBC complimented the company for freezing the prices of face masks and hand sanitizers to prevent customers from being adversely affected by the disruption in the supply chain caused by the outbreak.    
   
Coupang said in a statement Wednesday that its vast logistics network and infrastructure it aggressively built in recent years may have helped it reach second place. The retailer claims more than 70 percent of the Korean population lives 10 minutes away from its “Rocket Delivery” logistics hubs.    
   
Coupang said it will continue to contribute to the fight against the pandemic. It created around 20,000 jobs in the first quarter in the face of a national unemployment crisis.   

Joong Ang Ilbo

You can read more at the link.

It looks like these luxury brands may be the next target of South Korean tax authorities as they finish with Starbucks:

The National Tax Service’s (NTS) special audit of Starbucks Korea could be a warning sign for other multinational corporations here suspected of tax evasion. 

The tax probe of the U.S. multinational coffeehouse brand seemed to be an irregular one that the tax agency could have launched against any firm operating in the country suspected of evading tax. 

The NTS has been probing offshore tax evasion since the beginning of this year, mainly targeting multinational tech companies and imposing 1.33 trillion won in penalties for tax evasion. Companies generating over 150 billion won in sales are subject to a special audit. 

In this case, luxury brands like Chanel and Louis Vuitton could also be targets. 

Korea Times

You can read more at the link.