Business Trends & Ideas for 2010
By Cho Jin-seo
Staff Reporter
The recession is over, the President of South Korea pronounced in his new year's speech. Whether you believe him or not it is true that people are opening their wallets more often than they did in the past two years.
To start a business, the best time is always when the economic cycle reverses its direction from down to up. So probably now is the time.
What can be even better for entrepreneurs is that the economic downturn has probably wiped out many businesses from the market, effectively reducing competition. So, why not venture into a new business in the Year of Tiger, if you can afford the money and courage?
Here is some advice from smart people at the LG Economic Institute, a Korean think-tank, and Springwise.com, a group of experts in finding new business trends: But after all, success is up to your talent, dedication and luck, and that's exactly what makes doing business even more exciting.
Shop/work/play on mobile phones
The iPhone was introduced only seven weeks ago, but it is already reshaping society. Internet search results show that Korean newspapers have reported about this invention 4,874 times since its launch on Nov. 28.
The popularity of such ``smartphones'' is likely to accelerate when the likes of Samsung and Google offer other models.
Such a change has several implications on businesses ― large groups such as CJ, Colon and Samyang have decided to buy such handsets in bulk and to hand them out to employees this year, with many more companies likely to do the same.
They want to use the device as business communications tool, which mean there will be large demands of software applications as well as the handset hardware. There will be a huge market for B2B software developers.
Small-scale entrepreneurs will also have a shot. There are over one million mobile phone applications already on sale in the U.S. and other English-speaking nations, but in Korea application stores are still in their rudimentary stages.
Making new applications or adapting English-language services to Korean can make you a millionaire. LG Economic Institute's top choices are digital maps, GPS systems, and banking and money transfer services.
The iPhone has greater implications on the economy then their sales show, because the people who buy them are usually trend setters and have strong word-of-mouth marketing power.
``Businesses have to hone their skills to analyze consuming patterns of mobile users and identify the flow of information and essence of consumer behavior in order to create new business opportunities,'' the report said.
In short, if you want to know what tomorrow's market trend will be, watch where the iPhoners shop and what they buy.
Malling
American-style shopping malls are no longer confined to posh areas.
The successful opening of Times Square in Yeongdeungpo, southwestern Seoul, last September showed that even low-income areas can accommodate giant shopping complexes, which have shops, restaurants, bars, cinemas, spas, supermarkets, beauticians, Internet cafes, bowling lanes, pool tables, swimming pools, plastic surgery hospitals and five-star hotels all under the same roof.
Times Square is about 1.5 times bigger than COEX Mall in southeastern Seoul. Its location was considered not ideal for high-end shops, and its proximity to a hundred-year-old red-light street was another disadvantage.
But despite these shortcomings, the operator estimates to have between 180,000 to 350,000 visitors every day.
A similarly successful shopping mall is operating in Yongsan, and around 20 new malls are to come in the Seoul metropolitan area as well as in Daegu and Busan.
LG Institute says that number of big stores over 3,000 square meters rose 58 percent between 2001 and 2008 while 20 percent of small shops have perished.
This also means increasing competition for mall operators, who will then have to seek ways to differentiate themselves from others.
Foreign fashion and lifestyle brands will be lured to the malls at favorable conditions, as well as firms that have know-how in designing, and managing shopping malls and its facilities. And please someone open IKEA in Seoul.
Food subscription
Like newspapers, freshly steamed dubu (tofu) was delivered everyday to houses by bike in the past.
Sadly urbanization has almost killed the small-scale food production and delivery industry over the past years, but it is coming back. Trend watchers at Springwise.com have selected the rise of small-scale culinary subscription as the top business idea of 2010.
``The past year or two saw a huge increase in innovative, upscale mobile food purveyors working from trucks and selling everything from premium ice-cream to Korean BBQ tacos. Requiring an even lower investment, the next wave could be small-scale culinary subscription services, which allow fledgling entrepreneurs to get a foothold in the food business, and create a steady income and a loyal client base for future business activities,'' they predict.
Such analysis seems correct. An organic dubu and egg farm called True Life started its home delivery service last summer and is now reporting about a 30-percent monthly increase in orders.
Likewise, kimchi and other Korean dishes are beginning to be served by housewives-turned-entrepreneurs as well as more established food factories.
Meanwhile, the delivery market for western dishes has huge potential and is not fully exploited. Premium dairy and bakery products can be good candidates for this daily subscription business model.
The point is that they can be seen as ``local and organic,'' says Springwise.com.
Rotating retail
A BBQ party inside a garage may not sound very appealing, but the garage bar business has actually been going very well in some areas in southern Seoul where the rent is too high to open cheap eateries.
A daytime auto repair station is converted to a makeshift BBQ bar during the nighttime, and the charcoal smoke and the strong aroma of pork belly effectively erases the insalubrious smell of gasoline and grease oil. Such is the wisdom of store sharing scheme.
Springwise.com says that this year, the idea of sharing or short-term renting of commercial property can be adapted to more upscale projects.
Their spies have found a company called Planeshop which is going to open a rotating retail shop in Glasgow airport where different brands can rent space by days or by hours. Another firm called BrandNew Stores is opening a chain of boutique stores ``where brands can temporarily present themselves in a regular retail environment.''
As South Korea boasts the population density of 10 times the world average, space is always a problem. But this also means that once you can deal with this issue, then you are at an advantage against your competitors.
The concept of part-time rent and brand-inn will become more attractive this year as office and shop rent in prime commercial areas will certainly go up in line with the rise of the KOSPI.