Category: Korea-Business

The future is here and now even the convenience store clerk may become obsolete:

According to Bloomberg, Amazon said it will increase the number of its smart stores to nearly 3,000 across the nation by 2021. This also led GS Retail to launch the first cashierless convenience store here in Sept. 2018 in Magok, western Seoul. Following this, other local retail giants have opened smart stores adopting hi-tech payment systems.

The most prominent example is the GS25 store that opened on the 20th floor of Eulji Twin Tower in Jung-gu, central Seoul, two weeks ago.

There are over 34 smart cameras installed in the store with some 300 weight sensors that all connect to an artificial intelligence (AI) system, which plays the cashier role. 

Cameras watch customers’ behavior and their movement around the store while sensors detect which items they have picked. When a customer finishes shopping, they can just walk out of the store and the payment is processed automatically through a mobile application. 

Despite the convenience, customers are expressing mixed feelings about cashierless stores.

“This is so cool. I don’t have to wait in the queue and I can just grab and go without taking my wallet out of my pocket,” said 31-year-old nurse Lee Jung-soo. “Sometimes I felt sorry for people behind me waiting for me to pay at the convenience store but this new automatic payment system allows me to walk out without stopping.”

However, 35-year-old office worker Kim Jong-bum expressed his discomfort over the move, saying the system could lead to problems involving privacy protection.

“Think about it. Cameras watching you everywhere, anytime. This AI program will first be adopted to convenience stores, then to restaurants and clothing shops. It is only a matter of time until they all connect to put you under surveillance,” Kim said.

Korea Times

You can read more at the link.

Here is an inner left wing fight over who should be able to appoint the chief of the Industrial Bank of Korea, the Blue House or the labor unions:

Protests outside the state-run Industrial Bank of Korea are expected to intensify, with the union’s fight against the top-down appointment of CEO Yoon Jong-won gaining support from powerful national labor associations in recent weeks. 

The Federation of Korean Trade Unions, one of the two largest umbrella labor organizations here, announced Wednesday that it was joining the IBK unionists in protesting what they see as excessive government meddling in the organization’s personnel affairs.

The new leader of the FKTU, Kim Dong-myung, visited the IBK headquarters in central Seoul to announce the organization’s participation and vowed to continue until the workers’ demands were met. The FKTU had around 930,000 members as of the end of 2018, according to data published by the Ministry of Employment and Labor in December. 

The Korean Confederation of Trade Unions, which has a membership of more than 960,000, announced it was joining the fight earlier this month. 

Korea Herald

You can read more at the link.

This seems to be yet another example of the loss of confidence in the Korean economy considering that Elliott was losing money in their investment into Hyundai Motors:

New York’s Elliott Management has completely cashed out of the Hyundai Motor Group, selling all of its shares in three related auto companies.

It is estimated that the fund lost money from the holdings, holdings which may have cost $1 billion.

The sale of the shares was widely reported in the Korean press, and Financial Supervisory Service data show no Elliott Management holdings in any of the companies. Hyundai Motor would not confirm the unloading of the stake.

Local press reports say that the shares were sold before the end of last year. Elliott Management revealed its equity interests in the group in April 2018.

Recent disclosures show the fund had owned 2.9 percent of Hyundai Motor, 2.1 percent of Kia Motors and 2.6 percent of Hyundai Mobis before the sale.

The estimate of losses on the holdings is based on the fact that when Elliott first acquired the shares, they were trading at higher prices than they are now. Hyundai Motor shares were in the 150,000 won ($129) to 160,000 won range in early 2018. They are now trading at about 130,000 won.

Joong Ang Ilbo

You can read more at the link.

It seems pretty clear that the brother is trying to sideline her because of the bad publicity her presence would bring. With that said people need to get over the whole “nut rage” incident. She was vilified, sent to jail, lost her job, humiliated, and then even divorced by her husband. I think she has been punished enough for turning a plane around at the airport:

Cho Hyun-ah, former Korean Air executive vice president, accused her younger brother Monday of not leading Hanjin Group in accordance with their father’s dying injunctions, signaling a sibling feud over control of the logistics-centered conglomerate.

Cho, who is notorious for her 2014 “nut rage” incident, released a statement via her legal representative, claiming that Hanjin Group Chairman Cho Won-tae is not following their father’s instructions regarding group management.

“Our father wanted the family to run the business together, but Hanjin Group is currently neglecting his last words,” Hyun-ah said through her legal representative. 

Former Hanjin Group Chairman Cho Yang-ho died of a chronic lung disease in Los Angeles in April at the age of 70.

Their feud surfaced in May when the board of Hanjin KAL, the group’s holding company, belatedly named Won-tae as the group’s new chairman reorganized by the Fair Trade Act. Hyun-ah and her sister Hyun-min allegedly disagreed with their brother.

The three seemed to have reached a consensus when Won-tae told reporters that the three have ironed out their differences and agreed to work together. However, Hyun-ah has not yet returned to the family-run business. 

Korea Times

You can read more at the link.

Via a reader tip comes news that an increasing number of hotels in South Korea are ditching their name brand:

The Namhae Hilton also changed its name to the Ananti Namhae in January 2018, while the Hyatt Regency Jeju also converted to the Shore Hotel Jeju. 

Two Walkerhill hotels also ditched the brands Sheraton and W of the global hospitality giant Marriott International in 2017 and turned into the Grand Walkerhill Seoul and the Vista Walkerhill Seoul.

Speculation was rampant that Shinsegae Chosun Hotel that operates four Marriott-brand properties ― the Westin Chosun hotels in Seoul and Busan, the Four Points by Sheraton Seoul Namsan and the JW Marriott Seoul ― might part ways with the Westin brand, but it renewed the contract recently to retain the name.

However, the company plans to launch five new hotels by 2023, but it has yet to decide whether to go into partnership with global hotel chains, according to its officials. Last year, Shinsegae opened its first standalone brand L’Escape Hotel in Seoul. 

“The reason more local hotels are ending their relationships with popular global brands is that the benefits of using those brands are not as significant as expected,” a hospitality industry official said.

“In addition, some owners are unhappy about complying with strict instructions from brand headquarters to meet their standards.”

In addition, with online travel agencies (OTAs) gaining a bigger presence in the hospitality sector, local hotels are relying more on these platforms rather than focusing on partnership with global brands.

Korea Times

You can read more at the link, but I know for me the brand is important because of points programs that lead to free stays. That is going to be a major market that will be lost by ditching major name hotel brands.

Korea’s economic news continues to get worse:

Korea’s exports will likely decline by 10.2 percent this year from the previous year, according to the Korea International Trade Association (KITA).

The trade lobby said in a report Thursday that it expects outbound shipments for this year to record $543 billion due to global trade friction and tumbling semiconductor prices, making it fall far short of the record milestone the country achieved last year of $604.9 billion.

Exports have recorded on-year declines since December last year.

“Exports will drop by around $60 billion compared to last year, and around $30 billion [of the drop] is due to semiconductor prices that have fallen by 40 percent,” said KITA CEO Kim Young-ju during a briefing at the KITA headquarters in Gangnam District, southern Seoul. “On top of this, petrochemical prices fell 10 percent from the previous year due to falling global crude oil prices.”

Joong Ang Ilbo

You can read more at the link.

It looks like a new owner for Asiana Airlines is getting closer to becoming a reality:

The stock prices of Asiana Airlines Inc. and its affiliates advanced Friday after three consortia joined a final auction to acquire the country’s second-biggest airline. 

Asiana shares jumped 9.6 percent to 5,820 won, information and technology solutions provider Asiana IDT Inc. soared by nearly the daily limit of 30 percent to 22,650 won and low-cost carrier Air Busan Co. soared 12 percent to 7,150 won.

The broader KOSPI erased earlier gains to end in negative territory, falling 0.3 percent to 2,137.23.

On Thursday, the Aekyung-Stone Bridge Capital consortium, the consortium of Hyundai Development Co. (HDC) and Mirae Asset Daewoo, and the consortium of the Korea Corporate Governance Improvement (KCGI) and BankerStreet private equity funds submitted their final bids to Credit Suisse, the sole lead manager of the deal. 

Aekyung and HDC reportedly presented the acquisition prices of around 1.5 trillion won (US$1.3 billion) and about 2.5 trillion won, respectively, for the country’s second-biggest airline after Korean Air Lines Co.

Yonhap

You can read more at the link.

SKorea has imposed a 513% tariff on imported rice for years. It's ridiculous.

As a member state of the WTO, SKorea is obligated to import rice even if doesn't want to. In 2014, it had to import up to 409,000 tonnes of rice.https://t.co/CnCL80tYQZ

— John Lee (The Korean Foreigner) (@koreanforeigner) September 20, 2019

The South Korean government really wants people to get used to shopping with reusable bags:

Plastic waste is a nagging headache for Asia’s fourth-largest economy. After banning plastic cups and bags, the government is now moving to ban paper boxes and packaging tapes.

Starting November, supermarkets will stop providing paper boxes and tape that shoppers can use to carry their groceries home, a move meant to encourage shoppers to use reusable shopping bags and reduce the plastic tape and string used for packing boxes, according to the environment ministry.

Yonhap

You can read more at the link, but the supermarkets must love the fact they can increase profits by selling the reusable bags all the while claiming they care about the environment.