No More Smiley Faces

Friday marked the official end of Wal-Mart in Ulsan as the last remaining store became an E-Mart. Wal-Mart announced earlier this year that they would be selling 16 of their stores to Shinsegae, which owns E-Mart, an withdrawing from the Korean economy, just as Carrefour had done previously (even the former Wal-Mart Korea website has been shut down). I can't say that I shed any tears for the Walton clan, and the lack of a Wal-Mart in Ulsan has not effected me at all. However, I mention it here because Wal-Mart's experience in Korea is representative of other multinational corporations that have had trouble adjusting to the demands of Korean consumers. Officially, Wal-Mart was unable to win the market share here that it has in other locations, and plans on focusing more on its operations in China. Many Korean business analysts have pointed out several reasons why Wal-Mart and others have failed to break into the Korean market, mostly due to lack of creative brand promotion and failing to stock the items that Korean shoppers are interested in. For example, Wal-Mart insisted on stocking dry goods almost exclusively, whereas the large Korean retailers (E-Mart, Lotte, and Homeplus, which is actually owned by Tesco) all have an entensive grocery section in addition to selling clothing, electronics and what not. I often go to E-Mart to find food items that I can't get at my local grocer's (cheese, cream cheese and bagels, for example). Walking the floor, one is inevitably accosted by store employees, all trying to make a sale. Sometimes, they walk around shouting the specials into a bullhorn. There are free food samples everywhere, and at E-Mart at least, women in hanbok explaining about the special deals that week. Hi-Mart, another Korean retailer, has especially ostentatious store promotions, hiring scantily clad go-go dancers and blasting techno music in front of their store locations. Wal-Mart, apparently, did none of these things, making no attempt to localize its business model, and therefore the Korean consumers shunned them. But it's not just the retailers that have trouble succeeding in Korea. Nokia has had a particularly difficult time here, and Nokia phones are nowhere to be seen, with consumers opting for Samsung and LG instead. Even Google comes in behind the local search engine, Naver.com, which has a variety of functions including chatting, a Korean-English dictionary, on-line shopping and a forum for users to post questions for anyone to answer (all of my students rave about it, too). Admittedly, I wasn't a business major, and I haven't seen any data about Korean consumption patterns, but it does seem to me that Koreans have enormous pride in their national brands, like Samsung and Hyundai, and prefer them to foreign brands (tangential point: jobs with Samsung and Hyundai are eagerly sought by university graduates because the job is basically guaranteed for life and these companies provide amazing benefits for their employees, such as free college for their children. As a result, those jobs are highly competitive). It seems almost like a form of nationalist loyalty, although I might be overstating things there. At any rate, the yellow smiley faces are gone from the peninsula for now, perhaps forever.