A real cap pistolWhether they’re heading to the ballpark or just taking a drive along country backroads, for many Koreans the baseball cap is the only kind of hat to wear.
New York Yankees, Los Angeles Dodgers, Chicago Cubs, you name it ― the team does not matter, as long as it fits and looks good.
The legions of teens and 20-somethings sporting a Yankee cap aren’t all fans of the Bronx Bombers, and they’re not usually too worried about the sun’s harmful rays. They pull it over their heads to look cool and impress the girls.
Though most baseball caps ― or any sports team caps for that matter ― that you find on the streets, alleyways and Seoul subway system’s subterranean stalls are not officially licensed by the team franchise, it turns out their designs originate in Seoul.
Most major American sports franchises can thank Park Bu-il, chief executive and founder of Dada Corp., for their skull-hugging headwear.
Today, Dada Corp. boasts a 45 percent share of the world’s sport cap market, reporting 135.6 billion won ($113 million) in sales last year in the United States, Europe and Japan.
Global sportswear franchises such as Nike, Adidas and Reebok count on him to fill the shelves, as do franchise teams in the United States of baseball, basketball, football and hockey.
The hat business started out slowly for Mr. Park. He first got hip to the cap craze after a visit to the United States in 1976.
“Everyone in the United States ― young and old ― was wearing a hat,” Mr. Park recalls. “I knew what business I should be moving into when I saw how many people owned hats.”
At the time, the demand for baseball hats in Korea was low, and the limited market was dominated by Young Ahn Hat Co.
Without hesitating, Mr. Park focused on the overseas market and got rolling with five sewing machines in his small apparel factory in Sillim-dong, southern Seoul.
His big break came when he pioneered a new method of affixing logos to hats. Until the early 1990s, logos on hats ― whether it was Nike’s swoosh or Miami’s dolphin ― were imprinted on the fabric with ink.
Mr. Park’s method, however, embroidered the logo on with dyed threads. With $80,000 in seed money, Mr. Park purchased 100 embroidery machines and began experimenting with new designs. He had a winner; by the mid-1990s Dada’s sports caps were a hot item.
Soon, officials at America’s Major League Baseball organization called Mr. Park and asked him to develop some cap designs. Mr. Park hired more designers and got to work. The secret to his company’s success lies in continuously changing designs to meet his client’s wishes.
Instead of just drilling needles, Dada adopted the Original Development Manufacturing system, which allows it to research and innovate its own designs for sports caps rather than relying on a client’s submitted style.
This system provides designs for 90 percent of Adidas’s hats. Recently, the sports apparel and sneakers giant Reebok also entrusted the Korean company with its hat designs.
Nowadays, Dada’s 60 designers and 20 researchers in Seoul collectively churn out about 100 different sample designs a day. Of course, not all of them are used; many are tossed in the waste bin.
Since 1989, Dada has transferred most of its production to overseas bases, leaving the Seoul office with the task of producing samples. The factories in China, Vietnam, Bangladesh and Indonesia churn out 100 million hats a year.
Mr. Park depends on lower overhead at overseas apparel plants to stay competitive with China and Taiwan, both of which are quickly making inroads into the hat market and appear eager to bite off a larger slice of the world hat market pie in coming years.
So far at least, Mr. Park does not worry much about the Chinese. He just wants to put up a good fight.
But that may be all he can lean on in coming years. In terms of price competitiveness, Dada Corp. has as much chance of underselling the Chinese as a blindfolded batter has of knocking a ball out of the park. The Korean company’s hat is 30 to 40 percent more expensive than average Chinese caps.
Mr. Park remains buoyant mainly due to his company’s high productivity levels.
Rather than depend on the traditional conveyer belt system, with a repetitive production process, Dada Corp. keeps production moving but only manufactures as much as is requested by clients.
The Lean Production System, first applied to Dada’s factories this year, also allows workers to engage in different aspects of the manufacturing process, in addition to quality control checks. In the past, assembly line staff repeated the same task, so the new system also provides for a more motivated workforce.
Dada officials say the system speeds up the process markedly. In terms of numbers, it translates into an average of 3.9 hats produced per worker each hour, rather than 1.5 hats as was the case in the past.
Once the Lean Production System has been applied everywhere, Mr. Park hopes he can outmatch competitors in China.
Dada Corp. is also enthusiastic about Internet trading. In 2000, during the dot com craze, Mr. Park launched Damonet (www.damonet.com), a Web-based trading company. And on the company’s Web site, Dada conducts polls on the best hat designs. The Internet also efficiently links the Seoul office with the 13 factories spread across four countries.
With the U.S. economy hurting since the Sept. 11 terrorist attacks, Dada’s sales have also taken a beating.
But he takes his lumps in stride, saying “In business there are ups and downs. Sometimes creative tension is necessary.”
And Dada Corp. has some keen local competition nowadays for producing sports chapeaus, according to a recent article in The New York Times.
The broadsheet reports that Koh Ho-seong’s PNG Corp., also based in Seoul, reaped $20 million in sales of licensed sports caps in 2001 through its factories in Vietnam, Cambodia and Bangladesh.
Mr. Koh’s company produces sports caps for such major American events as the Super Bowl, Rose Bowl and World Series.
PNG’s competitive edge, according to the article, is its ability to create designs rapidly. Reportedly it can put together a championship cap within a week.
As the manufacturers battle for supremacy in the licensed cap market, Dada for one doesn’t appear too eager to augment its sales via the Korean consumer. Though Dada’s headquarters and 330 employees, is in Seoul, the company’s hats are not to be found around town.
by Sung Haeng-kyung