[Outlook]Gucci, Prada, KoreaA famous designer made a joke that purses made in Italy cost thousands of dollars, while purses made in Itaewon cost tens of dollars, even though the two locations start with the same three letters. The head of an education center said that she feels sorry that products made in Itaewon are not of poorer quality, but the prices of articles made in Italy are excessively high only because of their brand value.
An upscale fabric company in Europe was recently on the verge of bankruptcy but was able to stay afloat thanks to shopping sprees by Koreans. Right after I heard this, I got the chance to witness the story when I was on a plane heading for the United States. The plane stopped at Anchorage and the company’s store inside the airport had huge discounts, and was filled with Korean costumers. I do not mean to obsess about Korea’s addiction to luxury items. I just think that we need to think about how many luxury products Korea can produce.
If we use luxury products as a standard, then countries that produce upscale items are advanced countries, those that produce imitations of these products are developing countries, and those who can’t produce even copies are underdeveloped nations.
According to research conducted by Interbrand, the world’s top 100 brands are all owned by advanced countries. The United States has 51, Germany nine, Japan eight, France eight and Korea has three. Switzerland has less than one sixth of Korea’s population but, surprisingly, has five brands on the list.
Switzerland is a kingdom of brands. Even the country itself has commercial value. Its army commercialized its multi-functional tools and made the Swiss Army Knife into a high-end brand. The country is famous for secret banks and luxurious watches. Even the IMD, a research institute, and the WEF, which is well known for the Davos Forum, are becoming brands. According to the WEF, Switzerland was the most competitive country on the global stage in 2005.
How are things in Korea? Our country has passed the stage where all we can do is produce copies. At this stage, we are able to make luxury items and we should make them. Some Korean products are already better than foreign products. An employee at a travel agency in Tokyo says that, in the 1990s, Korean tourists went to Akihabara to buy upscale electronic goods but now few Koreans buy Japanese products because Korean items are better than Japanese ones. As Korea will soon become an advanced country, it must compete fiercely with advanced countries to produce world- renowned brands for the global market.
Korea must create many brands that represent the country. For that to happen, there are four things we must do.
First, companies of all sizes must do their best to develop global brands. That is necessary for companies themselves to survive. Korea’s three major conglomerates are Samsung, Hyundai and LG. All of the world’s top 100 brands are made by conglomerates. To help Korean companies to create more competitive brands, regulations on business, such as limits on capital formation and regulations on circular investment, must be lifted.
Second, in this era where power is decentralized and local governments have gained more power, small cities must develop their own brands. Andong in North Gyeongsang province has many items to represent the city, such as Andong liquor, Andong salted mackerel, Andong hemp and the Hahoe village. An expert on culture in one local city said that his home town has a population three times larger than Andong’s but it does not have special brands.
Third, the United States has food companies that have become well-known worldwide, such as Starbucks and Dunkin’ Donuts. In this era of globalization, not only high-tech industries, such as information technology, biotechnology and nanotechnology, but also low-tech or no-tech industries, such as coffee, ice cream and bibimbap, can be developed into major brands that can inspire growth in the economy.
Fourth, in Korea, there are many objects that have the potential to become well-known brands. These include hangeul, the turtle ship, Admiral Yi Sun-shin, Goryeo celadon and Korean entrepreneurs. There are many Korean designers and businessmen who work on the global stage. These people should be able to develop brands to represent Korea in varying sectors.
Philip Kotler, the world’s leading strategic marketer, said that brands will become increasingly important and the future of a brand defines the future of a company. To develop Korea, developing our cities and towns and our companies as brands are the right way to survive.
*The writer is a professor emeritus at Seoul National University. Translation by the JoongAng Daily staff.
by Song Byung-nak