Can Korea overcome the 10-year jinx?

HAN WOO-DUK
The author is a senior reporter of the China Lab.

There is a “decade jinx” on doing business in China, named for the fact that Korean products and technologies can hardly last 10 years in the country.

Korean companies began producing and selling appliances such as air conditioners and refrigerators in China in the mid-1990s. They made a lot of money. But then Chinese companies, such as Haier, entered the market, and by the mid-2000s, Korean brands were pushed out. The same was true for kitchen container brand Lock & Lock.

China’s industrial development in home appliances, machinery, steel, shipbuilding and automobiles was a process of catching up with Korea. But there is one industry that remains solid beyond the “10-year wall,” and it is display technology.

It started with the cathode ray tube (CRT) monitors used in televisions and PCs. In the mid-1990s, Korean products had a market share of more than 70 percent in China. But by the mid-2000s, Korean companies moved on to liquid crystal displays (LCD) and led that segment of the Chinese market for another decade. China chased again, most notably with BOE, a company created with the acquisition of Hyundai Electronics’ LCD parts. China finally caught up with the Korean LCD after 10 years of chasing, and Korean companies handed over the market lead in the mid-2010s.

Was this the end? It was not. Korea went ahead with another weapon: organic light-emitting diode (OLED) technology. As LCD surpassed the limits of CRT, Korean companies broke the “decade jinx” with OLED.

But China would not stand still. BOE and other Chinese companies have been chasing the OLED sector for the past decade. Last year, Samsung and LG’s smartphone OLED display market share was 51.8 percent, down 14.4 percentage points from the previous year. All of them were swept away by China. As Chinese companies take up 48.2 percent of the market, they are about to shake off Korea’s lead in OLED. This is why we are reminded of the “decade jinx.”

The key is innovation. Korea dominated the Chinese market through its spirit of innovation, from CRT to LCD and from LCD to OLED. Without innovation, Korean companies would leave China, and the country’s presence there would be in jeopardy. Moreover, the Chinese government and private sector are strongly united — and have become more aggressive than ever. Does Korea have the innovative capacity to break through the “decade jinx?” That is a question for the government and the companies to answer.