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Tag: Korea

  • GM workers storm Korea CEO’s office after company holds back bonus

    GM workers storm Korea CEO’s office after company holds back bonus

    General Motors workers in South Korea forced their way into company executive offices, destroying and removing furniture, shortly after the automaker’s local unit told employees that there will be no bonuses due to a cash crisis.

    A video posted on YouTube showed about a dozen union members storming the CEO’s office in Incheon on Thursday, kicking and throwing chairs before removing a large desk.

    The union, whose representative could not be reached for comment, was protesting the company’s decision and urged the CEO to resign, according to GM Korea’s spokesman.

    Separately, the company confirmed in a statement what it called a “violent incident” at its executive offices that “resulted in significant damage to company property.”

    GM, which is seeking concessions from the union to revive its South Korean business after mounting losses, has proposed a $2.8 billion new investment plan and a $2.7 billion debt-for-equity swap to turn around the unit. After threatening to exit the country altogether earlier, the subsidiary last month said it intends to file for bankruptcy if the union fails to agree to a restructuring plan, putting pressure on employees and the government to help it stay afloat.

    The incident was reported to the police, the company said, adding that it will take legal action against the workers.

    Government reaction

    South Korea on Friday urged GM and the union to reach a wage deal swiftly, saying the government will be able to discuss support for the money-losing unit on condition of an agreement.

    The latest comments, made by the industry minister during a meeting with GM Korea’s CEO, came after the union’s protest over nixed bonuses.

    “Should the industrial conflict seen yesterday and today happen again, it will be difficult for (GM Korea) to gain public support and government support,” Paik Un-gyu, minister of trade, industry and energy, said in a statement.

    GM’s union accepted the company’s demand for a wage freeze and no bonuses for this year, but opposes a proposal to cut benefits as well as its plan to shut down the Gunsan plant.

    “We appreciate the ministry’s interest and encouragement,” a GM Korea spokesman said.

  • Starbucks Coffee Korea walks the talk

    Starbucks Coffee Korea walks the talk

    Voice recognition ordering has been introduced by Starbucks Coffee Korea, thanks to a 50/50 JV between Starbucks Coffee International and Shinsegae Group.

    Starbucks Coffee Korea has become the first retailer to use Samsung’s intelligent assistant Bixby, available on certain Samsung Galaxy devices, to allow for end-to-end ordering and payment.

    The features are an extension of Starbucks Siren Order, the company’s mobile order-and-pay technology that lets customers in South Korea order and pay for their purchases before arriving at the store.

    Bixby allows members of Starbucks loyalty program (My Starbucks Rewards) to place an order and pay through voice recognition “on command”. Customers simply speak as they would to a barista, including modifying their drinks to meet their preferences.

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  • Lotte unveils El Cube Game in Korea

    Lotte unveils El Cube Game in Korea

    South Korean retail giant Lotte opens a dedicated game products store in Seoul tomorrow amid a rapid growth of the country’s computer game industry.

    Lotte Shopping Co said it has remodelled its el Cube store in Hongdae, western Seoul, into a shop exclusively for games, to be called el Cube Game.

    El Cube is Lotte Department Store’s “mini” version, targeting consumers in their 20s and 30s. There are currently five el Cube outlets throughout the country.

    Lotte said the first offline store of Netmarble Games, South Korea’s top mobile game maker, will open at its outlet in Hongdae, one of South Korea’s most popular hangout places.

    The El Cube game store will also sell toys targeting “kidults,” referring to adults with a keen interest in toys that many regard as for children, it said.

    The market size of South Korea’s game industry was valued at around 11.5 trillion won (US$10.84 billion) as of last year, up 18.5 per cent from 9.7 trillion won in 2013, Lotte said, citing the Korea Creative Content Agency.

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  • South Korean department stores chase men from now onwards

    South Korean department stores chase men from now onwards

    South Korean department stores are ramping up efforts to attract male customers, whose growing numbers are changing the retail landscape.

    According to data from Shinsegae Department Store, male customers, which accounted for 28.1 per cent of customers in 2010, now represent just over 34 per cent of the major department store’s customer base.

    Sales at male-oriented shops at the main branch of Shinsegae Department Stores in Myeongdong and the Gangnam branch also jumped from 8.2 per cent to 10 per cent over the same period.

    Against this backdrop, South Korean department stores are continuing efforts to revamp their men’s departments, as well as introducing various products catering to family in an attempt to attract male customers of all age groups.

    Shinsegae Centum City opened a renovated men’s department on the fifth floor last month, featuring experience stores that appeal to not only men, but also women and family members.

    Street 5 is a select shop modeled after a European-style city-center plaza, packed with local brands from Busan and Daegu, differentiating itself from other stores.

    Apart from a wide selection of men’s clothing stores, a photography studio specializing in black and white photography and a premium select pet shop will also welcome visitors with various interests.

  • McDonald’s Marks 30 Years Since Opening its Doors in Korea

    McDonald’s Marks 30 Years Since Opening its Doors in Korea

    n March 29, 1988, the McDonald’s franchise opened its first location in South Korea in Apgujeong-dong in the southern part of Seoul.

    The country was already awash in Olympic fever with the summer games set to open later that year in September as hundreds lined up for their first taste of McDonald’s on the peninsula.

    Since that time, over 1.9 billion people have walked through McDonald’s doors in Korea – or about five people each second.

    Over the course of its three decades in the country, the global fast-food giant has introduced several items tailored to local tastes such as the “Bulgogi Burger” and the “1955 Burger”.

    In another nod to local tastes, Korea is also one of the few countries that doesn’t sell the Filet o’ Fish – which was replaced several years back with a shrimp burger. A move which prompted one person to form a Facebook group calling for its return.

    Knowing Korean’s love for spicy cuisine, the company also launched the “McSpicy Shanghai” chicken burger.

    It is interesting to note that McDonald’s branded their spicy Korean offering “Shanghai” – likely a wise move to maintain that international food feel of the franchise despite it being an adaption to local tastes.

    Last year in Singapore, McDonald’s rolled out the “Seoul Spicy Chicken Burger” and “Seoul Spicy Beef” burger, along with the “Kimchi Shaker Fries.” None of which are available in the Korean market.

    Riding the popularity of K-pop and Korean dramas in Southeast Asia, Singapore Mickey D’s even rolled out a mock Korean drama ad campaign with a love triangle featuring the Seoul Spicy in the middle of it all.

    Brand troubles in Korea

    While McDonald’s remains a very strong brand in the South Korean market, there are signs of it slowing down. The company currently has 448 stores across the country, but the pace of growth has slowed in recent years, increasing by 13 stores in the past two years.

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  • JD Sports Fashion Korea

    JD Sports Fashion Korea

    JD Sports Fashion Korea will launch with a store in Seoul’s Gangnam district on Friday week.

    It is the British sports fashion brand’s first venture into the Northeast Asian market since forming a JV with Korean retailer Shoemarker in September.

    By the end of the year, JD Sports hopes to have 32 stores across Korea, to be promoted and managed by Shoemarker. They will offer such global sportswear brands as Adidas, Fila, Nike and Puma.

    Founded in 1981, JD Sports Fashio has more than 1250 stores in 14 countries including Australia, France, Germany and the UK. Sales reached US$3.24 billion in 2016.

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  • Retailers find winning strategy in online-only

    Retailers find winning strategy in online-only

    Retailers have long been using online channels to make up for sluggish sales at their brick-and-mortar stores, but recently, they have taken the shift to another level, introducing products exclusively for online.

    The trend-conscious fashion and cosmetics sectors are at the forefront of this new strategy. Beanpole Ladies, a brand under Samsung C&T, recently introduced Lime Beanpole, a series of products sold exclusively through its website. The target demographic is Koreans in their teens to 30s, and the prices are around 60 to 70 percent of Beanpole’s original lineup. The designs are youthful, including engraved prints and embroideries for fruit.

    The nearly 30-year-old brand has been releasing clothes aimed at younger consumers since 2016 starting with Choco Beanpole. The last line before Lime Beanpole, called Coffee Beanpole, released for the fall and winter season last year, was a success – 80 percent of the stock was sold out.

    AmorePacific brand Innisfree’s True Care cosmetics line is popular among consumers in their teens and 20s and can only be purchased online. Another AmorePacific brand, Etude House, sells its Tapa sheet masks this way. Iope’s Whitegen Essence Cushion foundation, exclusively sold online, has a demo target of consumers in their 30s.

    “In the past, online-only products were special editions for those who don’t shop at brick-and-mortar stores but nonetheless have a sense of loyalty to the brand,” said Lee Min-kyu, senior vice president at AmorePacific. “Now, they’re starting to make exclusive products rather than one-time events.”

    Similarly, LG Household and Health Care’s The Face Shop sells 14 products from its Bifida line only online. Another well-known cosmetics brand, Nature Republic, has 18 products from its series Bulgarian Rose sold the same way.

    The biggest reason why companies are developing online-only products is their cost effectiveness. Operating brick-and-mortar stores incur high maintenance costs and investment in various stages of distribution.

    “If a product is sold at brick-and-mortar stores, it’s practically impossible to sell the same thing at a lower price online,” one industry source said. “Online-exclusive products can be sold at a lower price while maintaining the same level of quality, which is why it’s more effective in attracting new customers.”

    Another important motivating factor in the strategy is boosting brand loyalty among younger consumers. If something is sold exclusively online, this can attract more people to the company’s website, even if it’s just out of curiosity.

    “To prevent a brand from aging, it’s important to constantly pull in younger consumers,” said Won Eun-kyung, head of Bean Pole Ladies. “But conventional ways [of rebuilding a brand image] through [such methods as] a logo change are expensive, whereas the same results can be obtained by releasing online-only products.”

    Companies anticipate that if they succeed in creating a more favorable perception of the brand, sales will be affected positively in the long run.

    Some companies think online is a better channel to present the product’s differentiating points to the public.

    “A characteristic of online consumers is that they tend to compare the pros and cons of a product through multiple sources like blogs rather than rely on one-sided information offered by the manufacturer’s ads,” said Koh Hyang-sook, who leads one of Woongin Foods’ marketing teams. “Apart from raising awareness of the brand, online-only is now a method used to effectively highlight the product’s advantages.”

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  • Miranda Kerr launches organic beauty brand KORA on Tmall

    Miranda Kerr launches organic beauty brand KORA on Tmall

    As China’s desire for organic, healthy products gains momentum, international beauty brands are seeking to take advantage of a new approach to well-being.

    Last week, founder and supermodel Miranda Kerr launched Australian luxury skincare brand KORA Organics’ first Tmall store in China via live-stream from her Hollywood home. The event attracted more than 223,000 live viewers, with KORA Organics offering exclusive giveaways for spectators.

    “From my experience over the years, I have come to believe in and appreciate a holistic approach to overall wellness, and the connection of the mind, body and skin,” Kerr says.

    This kind of health-focused lifestyle philosophy is soaring in popularity among Chinese consumers, with last weekend’s Tmall Beauty Summit reporting that premium health and fitness products are more popular than ever with young Chinese women.

    “The appetite for natural and organic products in China continues to grow, and skincare is no exception” says Maggie Zhou, managing director of Alibaba Group Australia and New Zealand.

    With a growing awareness of health and well-being in China, Tmall Global is hoping to capitalise on luxury international brands seeking to enter the market. Tmall Global helps international brands like KORA Organics sell directly to Chinese consumers. For more than 80 per cent of brands on the site, these virtual flagship stores were their first foray into the Chinese market.

    “KORA Organics is a proudly-owned Australian brand whose certified organic and natural products speak directly to the growing demand from many Chinese consumers for clean and green Australian products” Zhou says.

    Korean beauty brand Innisfree has long been popular with Chinese consumers, marketing its innovative all natural, organic products from Jeju island. K-Beauty has struggled in China over the past year, with consumers turning to Japanese beauty when searching for high-quality products. However, according to L2’s Digital IQ Index: Beauty China 2018, Innisfree still ranked seventh among Chinese consumers, in large part due to the social media marketing of the brand’s all natural cosmetics and ‘green philosophy’.

    In line with this trend, KORA Organics is promoting certified organic and natural products, formulated with herbal extracts, essential oils, and vitamins. KORA’s products are certified by the international body COSMOS-standard AISBL/Ecocert, which guarantees the absence of toxins, synthetic pesticides or chemicals. In Australia and the United States, KORA Organics is stocked in more than 200 Sephora stores, and by the end of 2018, the brand hopes to be in place in over 2,500 stores across 25 countries.

    For now, KORA Organics will be entering China exclusively through Tmall, hoping to reach a growing base of Chinese consumers seeking healthy and organic skincare products before everyone else does.

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  • Is hype gone for AmorePacific?

    Is hype gone for AmorePacific?

    AmorePacific seems to be in a quandary, with the country’s fair trade watchdog investigating the cosmetics giant amid declining performance.

    According to AmorePacific’s auditory filing, the company logged 731.5 billion won (US$685.2 million) in operating profit last year, down 32.4 percent from a year earlier. Its sales also declined to 6.29 trillion won, down 10 percent during the same period.

    Its share price also nearly halved from two years earlier.

    In the first half of 2016, AmorePacific hovered over 400,000 won per share, but started to decline, falling as low as 236,500 won last Sept. 29, and did not rise above 350,000 won. It ended at 278,000 won on Tuesday.

    The situation is quite similar for AmorePacific Group (Amore G), which is the holding firm of AmorePacific. It has been on a downturn for the past two years, falling from 215,000 won on July 3, 2015, to 127,000 won on Tuesday.

    On the fall of the titan, analysts and other observers cited the diplomatic friction between Korea and China, due to the former’s decision to deploy a U.S. Terminal High Altitude Area Defense (THAAD) battery here.

    They said China’s cap on the number of items purchased at duty free shops directly affected the revenues of domestic cosmetics firms, whose sales to Chinese tourists account for a significant portion of their entire sales.

    However, some others say blaming the THAAD issue as the sole cause of AmorePacific’s fall may be unfair, given LG Household & Health Care’s (LG H&H) surge last year.

    In January, LG H&H said it posted 6.3 trillion won in sales and 930 billion won in operating profit last year, up 2.9 percent and 5.6 percent from 2016, respectively.

    LG H&H explained it has overcome the harsh market environment, in which overall market growth faced headwinds due to a sharp decline in inbound Chinese traffic, due to its luxury brand strategy and robust sales in the onshore Chinese market.

    With the handsome numbers, LG H&H overtook AmorePacific to become Korea’s top cosmetics company.

    As the two companies show stark differences while suffering the same THAAD issue, analysts interpreted the performances of their luxury brands as the decider.

    According to LG H&H, its Whoo brand logged 1.4 trillion won in sales last year, up 200 billion won from a year earlier. Though AmorePacific did not disclose its luxury brand Sulwhasoo’s sales, Kiwoom Securities analyst Lee Hee-jae assumed Sulwhasoo posted 1.15 trillion won in sales last year, down 245 billion won from 2016.

    AmorePacific denied the assumption, saying it cannot disclose the amount but Sulhwasoo outperformed Whoo in sales last year.

    Further data showing AmorePacific products’ popularity is the market share in duty free shops. According to a Daishin Securities report, AmorePacific’s duty free market share declined from 12 percent in the first half of last year to 5 percent in the fourth quarter.

    Amid doubts on the competitiveness of AmorePacific products, with its fairness in business also questioned, the Fair Trade Commission (FTC) investigated Amore G and its subsidiaries.

    During the five-day investigation that started Feb. 21, the watchdog looked into internal trading between Amore G’s affiliates on suspicion the group unfairly helped affiliates in which Suh Min-jung, the eldest daughter of AmorePacific Chairman Suh Kyung-bae, owns stakes.

    Despite the negative issues, Amore G and AmorePacific decided to pay dividends worth more than 40 billion won to the Suh family. Of them, Chairman Suh will take approximately 39 billion won thanks to his more than 70 percent stake in Amore G and 11 percent stake in AmorePacific.

    Unlike the owner family, AmorePacific employees did not receive incentives, which they normally receive every six months, throughout last year.

  • More stagnant E-mart store to be closed

    More stagnant E-mart store to be closed

    Shinsegae Group’s discount chain E-mart has decided to shut several more stagnant stores this year to improve the company’s efficiency.

    Shinsegae says it has also sold its Deoki-dong branch in Ilsan, Gyeonggi Province. The outlet had initially been a Walmart store in 1996, but became an E-mart in 2006 after Shinsegae acquired the US-based discount chain’s Korean affiliate.

    “We realised we needed to reform our stores for continuous growth,” says an E-mart official, “so we began closing down our stores that showed sluggish sales.”

    The company sold its store in Hakseong in Ulsan, the store in Bupyeong in Incheon and the store in Siji in Daegu last year. It also sold land in Hanam and Pyeongtaek, Gyeonggi Province.

    Following the closure of an SSG Food Market Mokdong store in Seoul in January, E-mart plans to shut down the Bupyeong and Siji branches in the first half of this year. The restructuring is regarded as a move to offset the retailer’s sluggish growth rate over the past few years.

    E-mart posted KW566.9 billion (US$524.3 million) in operating profits last year, down 0.3 per cent from the previous year.

    Disposing of its stores showing losses, the company is considering opening a couple of new stores this year, as reported.

    E-mart left the Chinese market last year because of lingering losses in the world’s most populous country. After launching E-mart store there in 1997, at one time it had 30 outlets. However, the Chinese affiliate posted KW21.6 billion in losses in 2016, and its accumulated deficit between 2013 and 2016 reached KW150 billion.

    Meanwhile, E-mart will begin building its second store in Ho Chi Minh City in May. The company is using its Vietnamese affiliate as a base for its expansion in other Southeast Asian countries, such as Cambodia, Laos and Myanmar.

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  • Automated stores with no human cashiers on the rise

    Automated stores with no human cashiers on the rise

    Unmanned Stores without cashiers are on the rise, industry sources said, amid local retailers‘ efforts to find a breakthrough in the saturated market.

    Local software firm Danal Co., which operates coffee franchise dal.komm coffee, said it recently opened the country’s first cashier-less coffee shop at the country‘s main gateway, Incheon International Airport.

    The coffee shop, named Beat, is located at the newly opened second terminal and is activated by robots, the company said.

    The store is operated by smart robots that can take orders, make coffee and move cups to a pick-up location where customers can drink.

    “The company aims to add up to 100 stores by the end of this year at various locations, including banks, shopping malls, and universities,” said a company official who asked not to named.

    Unmanned convenience stores are also on the rise, since the country’s first cashier-less convenience store broke onto the retail scene in May. The local operator of 7-Eleven unveiled a shop that utilizes vein recognition technology at South Korean retail giant Lotte‘s 123-story skyscraper.

    Unlike other 24-hour shops, automated convenience stores feature self-service kiosks, where guests scan the bar codes of their items and pay.

    Emart24, an affiliate of leading discount store chain operator Shinsegae, currently operates six cashierless stores, having opened the first one last June.

    BGF Retail Co., the operator of CU, South Korea’s largest convenience store chain, said it is preparing to open an unmanned shop.

    The company currently provides mobile application called “Buy-Self,” which allows customers to search for an item, and provides a payment tool.

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  • The Face Shop X Coca Cola has been launched

    The Face Shop X Coca Cola has been launched

    Korean makeup brand The Face Shop has launched a range of Coca Cola cosmetics in an unusual collaboration with the US soft drink brand.

    The makeup range includes cushion compact, powder pact, five cream lip tints, five lipsticks, three gel lip tints, and an eyeshadow palette – all in Coca Cola pattern packages.

    Not only are they sold to look a little like Coke products… they even smell like Coca Cola.

    The Face Shop says the lip tints and lipsticks really do have a scent similar to “the real thing”…

    The lip tint packaging also features a cute polar bear image on the cap.

    The Coca Cola cosmetics collection by The Face Shop is sold online and at retail chains in Korea.

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  • Blockchain might beat crooked contractors

    Blockchain might beat crooked contractors

    Brothers Frideric and Alexandre Prandecki’s journey to success in the home repair business started with a simple problem – their air conditioner broke in the Las Vegas heat.

    Rather than scan the local yellow pages, the brothers called in a repairman with a five-star rating through the Google for Work platform.

    “A guy comes in, big company, with his gadget and says, ‘Your AC unit is down, shot broken, you can’t even fix it, don’t repair it,” Frideric Prandecki said in an interview in Seoul. “I can give you a call, it’s $5,500 for a small unit.”

    The evaluation sounded fishy to Prandecki. He called another independent repairman named Nicu, who had a license but wasn’t well-known on the contractor listing sites. But Nicu turned out to be just the guy for the job.

    “He came to the house, he checked this, checked that and looked at the air filter, which is stupid by the way, and our air filter was dirty,” Prandecki said. “He changed the air filter and cold air started blowing.”

    The brothers realized that they had stumbled upon a business opportunity – connecting honest repairmen to customers.

    The Prandeckis’ business, Bob’s Repair, which introduces honest, skilled contractors with affordable rates to customers, grew steadily since they founded it.

    Since then, Bob’s Repair has handled over $1 million in transactions and facilitated more than 50,000 service calls.

    One of the barriers to solving the problem of overcharging customers is the nature of popular contracting platforms such as Angie’s List, Home Advisor or Google for Work. Because contractors are the main fee-paying customers of those sites, reviews posted on those platforms often can’t be trusted.

    “Home Advisor or Angie’s List will take down bad reviews if there’s a big complaint,” Prandecki said. “The only contractor that’s good is the person that pays [the most].”

    The company is adopting blockchain technology to further improve transparency for customers, who are often taken advantage of by unscrupulous contractors.

    “There’s a big issue where there’s a lot of fraud,” Prandecki said. “They’re overpaying for a simple repair or a toilet installment or an AC unit.”

    Prandecki believes the solution to this problem is blockchain. In a blockchain-based system, once a transaction is made and the review for the service is posted, the review will remain visible and can’t be removed or altered.

    “Someone said my business plan would never work because contractors won’t want anyone to know how much they’re charging,” Prandecki said. “That’s a lie.”

    Prandecki believes that successful blockchain services will combine blockchain with traditional businesses. That way, customers can directly experience the advantages of blockchain in their daily life – like when they need to call a handyman.

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  • BMW, Mercedes win with diesels in Korea

    BMW, Mercedes win with diesels in Korea

    It’s only been a couple of weeks since the 2018 Winter Olympics in Pyeongchang concluded, but for two of Germany’s major premium brands the hunt for gold in South Korea continues. BMW’s and Mercedes-Benz’s sales are booming and, unlike Europe, diesels have been a major driver of the success.

    Models such as the BMW 520d or Mercedes-Benz E 220d routinely rank as the best-selling imports.

    Typically, when experts talk about strategically important car markets, the Korean peninsula doesn’t come up. Instead the focus lies mainly on the BRIC countries: Brazil, Russia, India and China.

    While China has become the single-biggest market for Mercedes, BMW and Audi, the other three have failed to live up to their potential. Instead, a market of only 1.53 million light vehicles has stepped into the vacuum. Sales of Mercedes cars in South Korea increased by 20 percent last year. Remarkably, that represents a slowdown over 2016, when volumes surged by a third.

    Some of the growth can be attributed to a 2011 free trade agreement with South Korea that first reduced the 8 percent tariff on cars imported from the EU before eventually eliminating it entirely. Executives say what is even more important has been a change in attitude. A rising number of consumers are eschewing brands controlled by large family-owned conglomerates known as the chaebol, including Hyundai, in favor of foreign makes.

    Several such groups have become embroiled in scandals where the government helped keep chaebol executives found guilty of bribery and corruption out of jail. Now it’s no longer considered your patriotic duty to help the domestic brands, especially if you can afford better.

    “There’s a new spending paradigm called YOLO: You Only Live Once,” said IHS Markit senior analyst Andy Bae. “Thanks to supportive financial and promotion programs, YOLO consumers do not hesitate to purchase premium cars from Mercedes and BMW.”

    Mercedes now counts South Korea as its sixth-largest market worldwide, only narrowly trailing France with nearly 69,000 cars sold last year. BMW wasn’t far behind with a little less than 60,000. South Korea even eclipsed Japan last year as BMW brand’s second-biggest market in Asia.

    “There’s a strong relationship between South Korea and Germany, and they are attracted by German products, so we could utilize that,” Mercedes global sales boss Britta Seeger told journalists in Los Angeles last November.

    Seeger might be the best example of the growing importance of understanding South Korea. Prior to her promotion to the board of Mercedes parent Daimler, her first major assignment was running the automaker’s national sales company in South Korea from 2013 to 2015. Her unique experience there is also influencing what decisions she makes now. As part of her goal to open up the brand to new audiences, not just customers, Seeger decided that Mercedes should sponsor eSports competitive video gaming. “It may not be considered a mainstream sport, but it’s the fastest growing sport in the world,” said Seeger, who was attracted by sold-out stadiums around the globe and almost 500 million streaming hours watched per month. “I lived in South Korea. There it’s very normal — like soccer.”

    So, it’s that much more painful that smaller premium brand Audi has effectively been frozen out of this lucrative market after regulators decertified thousands of its diesels and imposed a ban on new registrations in August 2016 because of parent Volkswagen Group’s emissions-cheating scandal. This caused volumes to plummet from a peak of 32,538 in 2015 to less than 1,000 in 2017, crippling its dealer network.

    “Korean customers migrated from Audi to BMW and Mercedes during the sales ban,” IHS Markit’s Bae explained. “VW (Group) is preparing to start sales again.” Perhaps Audi will be able to benefit from what remains of the Olympic spirit.

  • KT Korea to launch 5G soon

    KT Korea to launch 5G soon

    KT plans to roll out its next-generation 5G network to users as soon as next March after its test run at the PyeongChang Olympics proved a success.

    The country’s second-largest mobile carrier said Thursday that its 5G system will offer true wireless service as opposed to fixed wireless service. Verizon is preparing to launch the first fixed wireless 5G service in the United States later this year. Fixed wireless 5G service requires the use of a router, and can only produce small networks for homes or offices.

    “We are not going to say we have commercialized a 5G network after offering fixed wireless service for homes,” said Oh Seong-mok, the head of KT’s network division, at a press briefing Thursday at the company’s Gwanghwamun headquarters in central Seoul. “We can offer fixed wireless services for those who really need them, like households in rural areas with poor network infrastructure, but it will not be our focus.”

    According to KT, the key to commercializing 5G is making sure users don’t lose connectivity as they move between the ranges of base stations which broadcast the signals.

    A KT spokesperson said that the strategies behind deploying fixed wireless 5G in the United States and Korea differ because of the two countries’ telecommunications infrastructure. The United States still has many areas without the fiber cables that enable broadband service, and laying down the cables is costly. Fixed wireless 5G could prove to be a cheap, efficient alternative, delivering high-speed internet to customers who are currently poorly served.

    KT wants to take the lead in Korea’s advanced telecommunications market by becoming the first company to provide a seamless mobile 5G network. Oh said that though its service will be first rolled out in major Korean cities, it aims to eventually create a nationwide network.

    The company is also working to set up its 5G Open Lab, a research and development center in Seocho District, southern Seoul, that will share 5G technologies with small and medium-sized businesses. KT expects to open the lab within the next few months.

    Even if KT manages to offer 5G by next March, customers will have to wait a little longer for 5G-enabled phones to hit the market. Global manufacturers are expected to launch the first 5G-capable commercial phones by the second quarter of next year.

    KT said its first customers will likely be enterprise clients that can use the 5G network on their own devices.