Could there be a Korean Bezos?
The author is a columnist of the JoongAng Ilbo.
Jeff Bezos is on top of the world. In January, his company, Amazon, stole the crown from Microsoft as the world’s most valuable public firm with a market cap of $797 billion. The founder and CEO is also the world’s richest person, with a fortune estimated at $137 billion. His wife, who is divorcing him after 25 years of marriage, could claim half of his wealth.
Bezos could never have put some of his “crazy” ideas into practice — let alone grow his tech empire — if he had been born in Korea. The world’s richest man is hated by the world’s most powerful. U.S. President Donald Trump has never hidden his rage against Amazon and its chief executive. Trump warned he would teach both a lesson once he got elected. Amazon headquarters were raided twice after Trump’s election, but Bezos shrugged it off, saying a company of such size is bound to come under government investigation.
Bezos is a natural liberalist. He was criticized as the world’s worst boss at the International Trade Union Conference in 2014 as the organization representing workers across the globe denounced Amazon’s “unsustainable business model” and poor treatment of workers. The workers room around Amazon’s enormous warehouses — called “Amazon Fulfillment Centers” — covering 24 kilometers (15 miles) a day. Amazon allows supervisors to keep watch and track workers’ every move with wristbands. Bezos stays proud of Amazon’s work culture and thinks unions are unnecessary. He would have been irrevocably crushed by militant umbrella unions and regularly raided by prosecutors for intruding on labor’ rights and activities if he did business in Korea.
His innovations and services would also have cost him a prison term here. The One-Click payment system introduced in 1999 has made the online bookseller an e-commerce giant. That wasn’t possible in Korea until 2014 due to the lengthy and multiple identification process that was mandatory. Financial authorities found the technique suspicious no matter how convenient it was. The multiple barriers to online purchases were removed only after the president questioned why it was so difficult for the Chinese to make purchases of Korean clothes and fashion items online despite their strong demand.
When the company introduced the e-book device “Kindle” in 2007 to allow access to any kind of books at monthly subscription fee of $9.99, small publishers strongly protested that it was killing their businesses.
Bezos claimed Amazon was committed to providing quality content at cheap prices, and kicked out the publishers from the Kindle book lists. If a big player bullied small players that way in Korea, it would have been summoned to the National Assembly and slapped with antitrust penalties.
The workers of Amazon do not like their boss, and vice versa — so Bezos invested 1 trillion won ($883.6 million) on robots and used them instead; he seeks to replace deliverymen with drones; he envisions a future where machines will entirely replace humans from cashier stands to consultancy rooms.
He is also arrogant: he does not want his employees to have a work-life balance. Such an exploitative work concept could have angered many citizens and civic groups in Korea.
Still, Amazon remains the United States’ most valuable asset. Over the last eight years, employees ballooned by 20-fold to 600,000 and the stock price rose fourfold. Bezos singled out “customer-focused management and long-term management to protect shareholders’ interests” as a primary reason for his success.
He orders workers to bring down production costs to provide good products at affordable price to consumers. Scott Galloway, a professor at New York University Stern School of Business, predicted that Apple, Google and Facebook might all go out of business in 50 years, but that Amazon would outlive them all.
President Moon Jae-in appears to respect Jeff Bezos. He gave his first foreign media interview to the Bezos-owned Washington Post in 2017. Moon often refers to Amazon when promoting venture enterprises in Korea. He vowed government support to venture enterprises like Amazon that expanded through M&As of start-ups.
Yet Bezos’ business model entirely defies Moon’s idea if he really believes that ventures can grow on fiscal spending in line with his income-led growth vision.
Bezos’ anti-union approach would also enrage Moon’s support base of the Korean Confederation of Trade Unions.
Bezos’s business model entirely focuses benefits for customers and shareholders at the expense of employees and supply chain would also invite prosecutorial and antitrust actions. In Bezos’ eyes, Moon’s dreams of a second venture boom would look naive and unrealistic. In fact, any politically-driven innovation policies — dubbed “green growth” or “creative economy” — have never succeeded in Korea.
JoongAng Ilbo, March 13, Page 31