[Viewpoint] Thanks to iPhone, you’re king againThe word bong, which means phoenix, used to mean king for a long time in Korea. They were often used together. A palace of a king used to be called a bonggueol, while a king’s palanquin was called a bongyeo. And yet, today, the word is used to mean two opposite things.
Sometimes we say that the customer is king, but there are times that the expression “this customer is a bong” is used, meaning he or she is an easy mark.
Although the origin of the new usage is not clear, some said Kim Seon-dal, a legendary cheater and businessman, sold a rooster by disguising it as a phoenix.
Customers, therefore, hate the word “bong.” It’s particularly upsetting when everyone else is treated like a king. When a new seller with strong competitiveness appears, customers who were once treated as easy marks often favor it.
The Toyota Camry and Apple iPhone, which made their respective debuts in Korea in October and this month, are perfect examples.
Within one month of its launch, 5,500 Camrys have been sold here. In fact, they’re backordered - unavailable until next year.
More than 100,000 iPhones were sold in Korea in 10 days. The seller originally expected about 200,000 to be sold in total, but it appears that figure will top 500,000.
Behind this unexpected popularity is the psychology of customers who no longer want to be treated as easy marks by Korean companies.
I learned this lesson from buying a car. A few years ago, it was popular among Korean students and employees in the United States to buy used Japanese cars. These cars performed wonderfully and were so popular that sometimes drivers could sell them later at higher prices than they originally paid. Cars manufactured in other countries depreciated by up to 20 percent per year, but it was different with a used Japanese car.
And yet some Koreans insisted on buying made-in-Korea cars and even brought them back when they returned home.
While the cars were given a 10-year, 100,000-mile warranty program in the United States, those benefits were not available in Korea. Free repairs were only available for up to three years or 60,000 kilometers. Some argued that they had purchased the cars in the United States, but it was no use. The companies told the customers that once in Korea, they had to follow this country’s warranty programs.
Early last year, Hyundai Motor launched the Genesis, and the new car was praised at home and abroad for its luxuriousness. The problem, however, began with its price tag in the United States.
It was exceptionally cheaper in the U.S. market than it was here - by over 10 million won ($8,530), to be exact. Angry customers complained. Some Internet users provided tips on how to buy a Genesis in the United States and bring it back to Korea.
This year, the situation did not change much. Hyundai Motor made major appeals to U.S. customers, operating a buy-back program for car owners who lost their jobs before completing their payments. U.S. media praised the program as emotional marketing. Hyundai even sometimes subsidized fuel for buyers.
Those benefits, however, are only available in the United States. In Korea, the company raised prices because it launched new models. During the first half of the year, Hyundai Motor still recorded the largest sales on the market, and the figure is expected to remain strong at the end of this year.
“Of the 2.8 trillion won in profit from sales expected this year, about 80 percent, or 2 trillion won, came from the domestic market,” said one analyst. “I think the company just managed to break even in the U.S.”
The situation is the same for the mobile phone market. Phones with Wi-Fi and GPS functions disabled were sold at more expensive prices in Korea. Cheap or free phones provided with subscriptions were all dated models - not always the case in foreign markets.
The newest models still cost hundreds of thousands of won in addition to the subsidies. Although the country labels itself as a super high-speed Internet nation, wireless Internet prices are extremely expensive.
The “iPhone effect” is already bringing about change. The prices of made-in-Korea smartphones have plunged because mobile phone makers and communications providers have provided subsidies to fight the iPhone. Mobile communications providers are also lowering the prices of wireless Internet service.
The “Camry effect” is also at work. Prices of Japanese cars including Hondas have come down. “Toyota began a bleeding competition,” said an industry source. “It’s a strategy to win the Korean market, the key profit source of Hyundai Motor.”
It’s also hard for Korean carmakers to raise their prices in an environment of greater choice for customers. There seems to be hope that the Korean customer will become king once again, escaping from treatment as a “bong.”
*The writer is the business news editor of the JoongAng Sunday.
by Lee Jung-jae