‘Korean Wave’ has made an immense impact in East and South East Asian markets, and this Wave has not only increased the global awareness about Korea, but it also increased the number of people with inclination towards Korea.
Korean-‐ness is the formed feelings and perception about Korea, and later has an attitude towards Korean people and products that are manufactured or sold by Korean firms. This research investigates the ways in which Korean firms form networks and enable the flow of knowledge and information and in what form particularly in the region called ‘Taiwan’.
This study has particularly pointed out the significance of the region for it involves the components of space, place, and scal, and the so-‐called ordinary
‘little things’ can be only explained through the context where they are placed.
Any ordinary things that people do in every-‐day life add up and become a trend that contains extraordinary meaning, and this can be explained through corporate and personal levels.
First of all, the concept of space is explored because propinquity of geographic space affects the information. The market knowledge is shared among the corporate partners. For example, for corporates, proximity to the market enables the acquiring of the most raw and tangible feedback from the market without filteration of the third party. Because this is displayed at individual level where the market shows the market fondness and resentment, which can be observed and identified at the interactions between/among parties.
Second of all, discussion on region carries crucial weight in value because the
‘place’ where relationships are formed, transactions are made, and the brand image is constructed. For example, it is at a corporate’s intention to hold global events in different countries annually and regular trips to the factories and conferences and talks at every quarter of the year. Moreover, the scale of interests and power given to the firms and countries, exhibited in the webs of interlinked relationships corporate and personal level. For example, spatial organization is not only limited to the scale. The world has become flat and
economy gone global, production network does not happen in one country but with involvement of a few or numerous countries.
In accordance to KOTRA directory of which I have took the information from as my database, Korean firms are in 14 different industries, and the ones interviewed are all multinational firms. These firms have both production network and sales network, but majority of networks they form in Taiwan are sales network. Firms with the same or related scale of interests and power have brought themselves to a particular space called Taiwan, which turned out to be great for making of cooperative corporate environment, and many firms move where information-‐generating entities for the purpose of achieving productivity and innovation. The basic requirements for Korean representatives in Taiwan are the ability to speak Chinese and if possible, some knowledge of either Chinese or Taiwanese market, which enable the share of cosmopolitan knowledge. Moreover, non-‐cosmopolitan knowledge is shared within production network in the forms of practice and technique with Taiwanese partners, where production networks are shared through signed contracts, technical aspects are supported with its supply chain, and information and knowledge base is developed and shared between vendors and constructors within the same region as well as with headquarter, in which the transformation of ideas occurs.
Majority of the Korean firms enter Taiwanese market for the purpose of selling and increasing brand awareness, more than for manufacturing goods locally. Therefore, these networks in sales are usually in agglomeration form, with less dependency towards physical assets and the purpose to learn about and approach to the local market, where sales network is more of a malleable one. The right approach towards the market occurs with the help of the knowledge arise from the untraded interdependencies within the networks.
The networks that are used are in soft, hard, and hard-‐soft transactions that deal with various kinds of interaction where buyer trends are obtained, the flow of information as well as richer insights in regards to evolving technologies, components, machinery are acquired, and other technical and operating or delivery possibilities are acquired that may lead to potential sales. And often,
Korean representatives find themselves easy to initiate talks with business partners and hold business meetings at first, in which both the Korean firms’
brand names as well as the usual-‐big size of Korean companies have largely contributed to this atmosphere.
Since new Korean representatives get assigned to come to Taiwan for every 5 years, and a nexus of network is formed and get handed down to the next representative taking charge of office in Taiwan. It is irrelevant the number of people that change as being the representatives, and how many changes that local business partners have to face due to the change associated with firm structure and formation. Korean MNCs benefit in forming networking linkages because the business relationship lasts for being big corporate, which form easy-‐to-‐trust sentiment. For example, those working for MNCs, usually been called as conglomerates, identify themselves wit the company when meeting people and undoubtedly, these brands worked in favor for them in approaching new customers or building deeper relationships with people. These brands guaranteed them certainty in social status and also with certain social and economic life styles, and these factors allowed Korean representatives to build relationship and gain trust more easily. Some defined building of relationship purely at corporate level, such as providing good products and services to each other or to the market at request as the foundation to a strong relationship with other Taiwanese business partners. In order to generate tacit knowledge, they found that the language is an integral part of acquiring of knowledge and characteristics of customers that make up the Taiwanese market. Customers’
needs, being important to identify for the next business deal, are identified when the talks are done in Chinese and with good foundation of relationship.
In addition to the face value that the big brands have, these corporates have also faced positive and negative aspects that come with the brand “Korea”.
First of all, in Taiwan, “Korea” has been associated with the “hungry spirit”, the hard-‐working spirit that finishes the project on time with tangible results. It is the spirit that drives a person to work very hard, to complete the tasks and to run towards the end-‐goal. Korean firms work very hard to meet the needs of
the Taiwanese market, and managers that I interviewed feel that their local business partners, competitors and vendors, respect such spirit of theirs.
Taiwanese have formed interests towards Korean culture and Korean dramas, which has made a positive impact towards the perception of
‘Koreanness,’ which used to be only associated with cutting-‐off relations at its diplomatic level in the year of 1992 and also with numerous sports events that the Taiwanese media reported repeatedly about unfairness or intentional foul that Korean athletes have shown. Therefore, despite how good the quality of the products or the price is, there are cases where potential Taiwanese business partners do not use Korean goods. In Taiwan, Korea is known to be a nation that does anything in order to win or achieve the desirable outcomes. Taiwan associates Korea as a country that is consisted of an ethnic group that does anything to achieve the end-‐goal, even if it takes some illegal acts or intentional fouls. Incidences in Taiwanese’ mind such as that of Taekwondo, diplomacy, and most importantly due to their similar kinds of manufacturing industries that their economies depend on are some of the reasons that provokes dislikes or even hatred toward Korea and also to Korean brands. Thus, the ‘hungry spirit’
of Korean firms have been showing has also been dealt negatively in Taiwan.
Korean companies face various challenges for being a Korean company, especially in competition to the loyalty that the market has towards the Japanese companies. The fondness towards the Japanese is deeply embedded in the minds of the Taiwanese and such fondness is clearly portrayed in the decisions that the market makes in daily business activities. Not only that, Korean companies have hard time changing the perception that the market has towards
‘Koreanness’. Therefore, the companies make efforts in various degrees such as changing the manufacturing sites, introducing the new products rapidly to the market with improved functions, performances, and designs.
Although adequate Korean representatives in Taiwanese branch and the big size of Korean firms have facilitated the process of Korean firms entering Taiwanese sales market with a nexus of networks, Taiwanese’ perception about Korean-‐ness hinders the increase of accrued sales, and Koreans outside of Korea, in Taiwan, still faces fierce competition against the Japanese. Despite that both
Taiwan and Korea share a history being colonized by the Japanese, the two countries have different perceptions about Japan. Taiwanese market has loyalty to the Japanese-‐style goods and this is socially driven to purchase Japanese goods among products produced from many foreign countries. It is important to point this out because this highly affects the operations of Korean companies. With the same functions and performances of the products, Japanese brands have some room to target the market with higher prices. This certainly links to the embeddedness of social relations that Japanese brands have in the hearts of the Taiwanese. In fact, Taiwanese and Koreans have different perceptions about Japanese colonization. Taiwanese show appreciation to the Japanese, whereas Japanese in Korean’s minds is an all-‐time competitor.
However, the difference is that Korea had a king and coming of the Japanese into Korea was perceived as ‘invasion’. However, Taiwanese perceive Japanese’
coming of Taiwan as a building and civilizing the country. Taiwanese, to this day, shows appreciation towards the Japanese for introducing and building of structures and systems into the land.
Firms that manufacture and distribute Automobile Parts and Home Appliances in Taiwanese market face fierce competition against Japanese brands and also have faced strong of resentment for being Korean firms. In fact, these two firms, as B2C firms are in the industries that Japanese firms have flourished in the earlier days. Trust that has been built in these businesses in addition to the positive response to the Japanese’ input, Korean firms in these two industries, Automobile Parts and Home Appliances, have experienced that despite the fact that the product descriptions are similar or almost the same with those of Japanese, their products have to be sold at a lower price while facing the not-‐as-‐good outcome as those of Japanese brands. Both of these firms do not emphasize that they are Korean firms nor they hide their identities, with the assumption that customers would know that they are Korean firm. Their products have little or no associations with product line in Korea. In fact, the firm in Automobile Parts manufactures their products 100% in Taiwan.
Another firm in Home Appliances bring to Taiwan the manufactured parts from Korea, but the products are manufactured and assembled in various parts of
Asian Pacific, other than Korea. Although they say that they do not have the intention of hiding their identities as Korean firms, when they advertise, the firm in Home Appliances partners with local Taiwanese celebrities for advertisements because local associations have produced much better outcome than those of Korean. The firm in Automobile Parts industry invests in and supports Taiwanese programs. It is good for the company because their advertisements on Korean dramas back in Korea is still effective when these dramas get imported in Taiwan and go on air multiple times.
Anti-‐sentiment from the market against ‘Korean-‐ness’ is pervasive among B2C firms because they have individual clients as the customers. However, there is none of B2B firms that face such fierce resentment issues from the market because B2B firms usually have fixed number of clients where clients know who they are. In fact, being a Korean firm is advantageous among B2B networks because it is known that Korean firms usually operate as conglomerates and doing business with large-‐sized or such as conglomerates is good for it eliminates the possibilities of being bankrupt. Particularly, when the business is more determined by the price rather than the brand itself, as the nature of B2B firms, Korean firms definitely have the advantage in forming networks with other B2B firms. Therefore, there is no resentment from B2B’s clients.
To better target the Taiwanese market that think the products are less-‐efficient or less–productive than those of Japanese brands, Korean firms have placed their strategy gaining more domination in Taiwanese market is to emphasize the functions and designs of the products that Taiwanese can see the difference visibly. Though it is easy to see so many Taiwanese enjoying Korean dramas or Korean entertaining programs, Korean firms have experienced that having Korean celebrities upfront on the advertisements is not so effective in Taiwanese media. Therefore, companies focus on advertising pure functions, performance, and innovative design of the products. These advertisements are easily reached, through TV, the Internet, and also indirectly through dramas and entertaining programs.
Korean firms have put much effort in trying to change the perception about Korea and Koreanness. Firms introduce Taiwanese market the new products not long after its first launch in Korean market. This is because Taiwanese very much associates Korea with the past, Korea that was a lesser-‐developed country with not so much structure economic and political sense in comparison with Taiwan. Firms offered products with emphasis on good functioning, updated technology and low price. One of the strategies to deal against such matter is to provide the same products with different origin of production marked and to make the brands blurry. Despite of all these efforts, it is very evident that Taiwanese still do not fondly think of Korea, in which affects the operation of Korean company negatively in Taiwan. Korean firms have hard time due to the brand image that “Korea” gives. Firms encounter difficulties to influence the perception of the Taiwanese market that do not have confidence in the quality of the Korean products offer. Swift provision of products to the market can be traced from the characteristic of Taiwanese market, because the market is described to be a developed and also a mature one. This is also to entertain the market with the thought that they are important to Korean companies. For example, despite that there has been much effort putting into the making of brand image such as organizing global events and trips annually to portray that they are more than just a brand that has ‘Korean-‐ness’, the firm still faces strong anti-‐sentiment from the market against ‘Korean-‐ness,’ and this firm has recently made an attempt to manufacture from the States in order to display itself as a
‘Made in USA’ rather than ‘Made in Korea’.
On the other hand, some Korean MNCs see it easier to do business in Taiwan for having the brand value of ‘Korea’. Korean products are easier to reach in the market with the in-‐flow of ‘Korean Wave’ in Taiwan, and it is not so difficult to see Taiwanese enjoying Korean dramas and Korean entertaining programs.
In fact, ‘Korean Wave’ has become fierce in Taiwan since the beginning of 21st century. However, ironically, having Korean celebrities upfront on the advertisements, targeting young audience, is not so effective. Companies that sell products that are enabled for advertisements, indirect advertisements in dramas and entertainment programs, which can fully utilize the link with
‘Korean Wave’ happening in Taiwan, but only a few companies exist that are benefited from being a Korean company. The industry that Korea is doing well in such as cosmetics’ industry is an area where Taiwanese market has positively responded. Therefore, a type of industry that is not directly related to industry associates them to this category of business. Clearly, there is a strong contribution of trust from the Taiwanese market to the “Korean” brand in the industry.
By industry, Korean cosmetics industry is gaining the most acceptances in Taiwanese market. Cosmetics industry, one of the renowned one in Korea, has attracted many customers from Asian Pacific regions such as Japan, Mainland China, and countries in South East Asia. By age and gender, those that are in age 20 to 30 have the most fondness towards Korean products and the majority that Korean companies have as customers as are female. Due to its acceptance, any firms such as dental and/or pharmaceutical industries associate themselves as Cosmetics for corporate reasons and they see the effectiveness. Likewise, Korean Cosmetics firms feel very much welcomed in the market. In fact, not many Korean cosmetics firms are settled in the market as they have begun approximately 5 years ago. They have experienced success in promoting themselves in the market. The one industry that market displays fondness over in B2C firm is cosmetics industry. ‘K-‐beauty’ has been formed as a terminology to describe Korean beauty, and with increasing number of Korean dramas and shows being watched across Asian Pacific regions and with flourishing of ‘Korean Wave’ such definition has become popular. However, even so, Korean Cosmetics firms yet do struggle to obtain higher market penetration whilst having many Japanese firms as their rivalries in the industry.
Korean firms have the highest market penetration in industries such as Dental and Electronic and Electric Components. Explanation for such high market penetration for Korean firm in Dental industry within Taiwan is that Taiwanese branch is the first overseas branch. The firm has initiated the particular dental product development in East Asia with manufacturing customized products for Asian teeth and was successful in new market entry.
On the other hand, it is interesting to see that of the highest market penetration
in Taiwanese market, Dental industry, has also received strong resentment from the local market for being a Korean firm. This firm from Dental industry is expecting to have positive responses from the clients as most of their clients have strong ties with and nostalgia from North America from their study years.
Electronic and Electric Components industry is very large in Taiwan, and specifically for large size panels, Korean firm has account for the highest percentage for market penetration. The firm has utilized well the corporate
Electronic and Electric Components industry is very large in Taiwan, and specifically for large size panels, Korean firm has account for the highest percentage for market penetration. The firm has utilized well the corporate