The late Founder-Chairman Lee Byung-chul of Korea’s top business conglomerate, Samsung, was originally a farmer. He used to put catfishes in the rice paddies where he kept loaches. The number of loaches grew by 400% in number, stronger and larger while struggling to escape the natural predators, the catfishes.
Ikea of Sweden, which Koreans call ‘Dinosaur Furniture Company,’ has landed in Korea, and opened its first mammoth store in the furniture town of Gwangmyeong-si some 11 miles southwest of Seoul.
Some people feel that Ikea in Korea is a catfish making the loaches (Korean furniture makers) struggle for life, and become bigger and stronger.
Others, however, say that Ikea will force Korean big furniture makers (such as Hyundai Livart and Hanssem) to cut down the prices of the goods made and supplied to them by their sub-contractor furniture companies who are mostly small-medium enterprises (SMEs).
In addition to this, Ikea is known to have hurt the feelings of the Korean consumers by making and selling maps that bore the name, ‘Sea of Japan,’ which Koreans detest and call ‘East Sea’ instead. This is a very serious situation because, together with Dokdo Islets and the Comfort Women issue, ‘Sea of Japan’ gets on the nerves of the Korean people.
Independent Korean-language business daily, Maeil Kyungje, said on Nov. 27, 2014 that Ikea set prices of some of its goods in Korea much higher than in other countries, which made the Korean people look like Hogeng (literally, ‘stupid consumers’) and that on this the Fair Trade Commission of Korea is considering an investigation.
Another thing that worries the Korean people is that Ikea got permission from the Korean government in entering the Korean market as a furniture company but that the global furniture giant is selling many more items that are far beyond the range of furniture.
Small Korean makers of daily necessities and stores are worried that the ‘giant’ Ikea could easily put all of them out of job by winning over all their customers with the overwhelming size and power of capital.
Will the Korean SME furniture makers improve their competitiveness (like the loaches) thanks to the entry of Ikea (catfish) in Korea and help them become more competitive and make inroads into the overseas market, or will they collapse like many small stores (such as small bakeries, barber shops and tailor shops) because invasion of the SME business area by Korean jaebeol business groups?
It appears that much depends on the Korean SME furniture makers and other related small storeowners as well as on the standard of business ethics on the part of Ikea.