Tag Archive | "hallyu"

Hallyu Sets its Sights on the Middle East

By Jenna Gibson

At the end of May, Korea’s largest media company announced it would be opening a Turkish unit to help create and promote local content for the Turkish market. They already have plans to film Turkish versions of popular Korean movies, and hope to move forward with more Korean-Turkish co-productions in the future.

CJ E&M is a Hallyu powerhouse, owning the music-oriented TV channel Mnet as well as popular cable channel tvN, responsible for several smash-hit dramas including 2016’s “Goblin.” With this move to increase its presence in Turkey, CJ is hoping to make new inroads for the Korean Wave in the Middle East.

Although the main markets for Korean pop culture abroad are still in East and Southeast Asia, the phenomenon has put down roots around the world, including in the Middle East. In Iran, for example, fascination with Korean culture started back in the mid-2000s, when the historical drama “Dae Jang Geum” was broadcast on state TV and garnered 86 percent ratings nationwide. In fact, in a 2017 report of the most popular shows on Netflix around the world, Iran was only one of two non-Asian countries to put a Korean drama (2012’s Love Rain) on the top of their queues.

Meanwhile, last year the United Arab Emirates became the first non-Asian country to host a KCON event after the United States. KCON, a music festival/cultural experience featuring some of the biggest k-pop stars as well as demonstrations of Korean food, beauty products, and more, drew more than 8,000 fans to its Abu Dhabi stop.

Scholars have speculated that one of the reasons Hallyu is so popular in the Middle East is because although some of the specifics are different, Korean dramas tend to focus on values that conservative audiences in the Middle East find relatable. According to one study of female fans of Korean pop culture in Iran, “Reflecting traditional family values, Korean culture is deemed ‘a filter for Western values’ in Iran.” The study dug further into online fan communities across the Middle East, showing that love of Korean pop culture allowed women to share a sense of community with fellow Hallyu fans. “The uni-culture cyberspace community of fandom has given Middle Eastern women confidence and a strong sense of group identity, sometimes for the first time.”

But the Hallyu movement is not just about giving fans a place to enjoy catchy dances or dramatic love stories. For the Korean companies that create Hallyu content and sponsor overseas events like KCON, it’s about getting fans to buy Korean.

“We see that there are a lot of business potential in many areas that are influenced by Korean culture, such as the beauty, IT and SOC markets,” Sul-joon Ahn, President of Music Division at CJ E&M, told Dubai News after the KCON event.

In fact, South Korea has been trying to create a “Second Middle East Boom,” focused on boosting industries like construction, infrastructure and energy. By capitalizing on the popularity of Hallyu, this push for increased Korean presence in the region can expand to include consumer goods and creative content.

CJ E&M’s expansion into the Turkish market could signal a new era of Hallyu, one that focuses on localization and domestic buy-in to boost the continued success of Korean pop culture around the world.

Jenna Gibson is the Director of Communications at the Korea Economic Institute of America. The views expressed here are the author’s alone. 

Image from Republic of Korea’s photostream on flickr Creative Commons.

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Is the Hallyu Crisis with China Over?

By Jenna Gibson

Beijing has approved the broadcast of a new Korean drama that had been co-produced by a Korean and a Chinese company, according to a source in the Chinese entertainment industry, making it the first Korean show to get the green light since before the THAAD spat.

This move is good news for Korean entertainment companies, which have been lamenting the Chinese ban which had slowly pushed Korean stars out of the spotlight throughout last year and culminated in direct retaliation against tourist packages and Lotte Department stores. It also bodes well for drama co-productions, which had seen tremendous success in last year’s standout Descendants of the Sun. At the time, before THAAD derailed things, Korean-Chinese collaboration was seen as the new frontier in Hallyu, and key to the continued success of Korean creative content in the Chinese market.

What’s interesting is the impetus for China’s reversal on allowing Hallyu content. Beijing is likely trying to start off on a good foot with newly elected Korean President Moon Jae-In, himself a skeptic of the THAAD system, in an attempt to give Moon some leeway should he decide to review the deployment.

A recent op-ed in the People’s Daily-affiliated Global Times insisted that “It is likely that Moon will stop THAAD’s deployment,” saying, “The huge economic losses South Korea has suffered are a result of the Chinese public’s anger. South Korea, which relies heavily on China economically, needs to weigh its potential gains and losses carefully” and that “Both Beijing and Seoul should take Moon’s presidency as an opportunity to promote warmer bilateral relations.”

But in reality, Moon has little room to maneuver at this point. THAAD is already in place and operating at some capacity, and recent missile launches from North Korea (the second of which was detected by THAAD) have highlighted its necessity in the public eye.

Although there was a dip in approval last November, the Korean public has largely remained favorable toward the THAAD system, according to polling by the Asan Institute in Seoul.  As of March, 50.6 percent of Koreans approved of THAAD, with 37.9 percent opposed. Perhaps because of this, President Moon has softened his position from outright opposition during the early stages of the campaign to stating that he objects to the way the decision was made, not the system itself.

As Asan Vice President Choi Kang pointed out in a KEI podcast after the election, President Moon may be constrained both by domestic politics and public opinion. Moon’s Minjoo Party only has 120 seats out of 300 seats in the National Assembly, and he failed to breach 50 percent of the vote during his election.

“How he can make a coalition or compromise with opposition parties is going to be a very, very critical issue for him to handle in the early phase of his presidency,” Choi said.

This could be particularly difficult when it comes to China, which has seen a steep decline in popularity among the Korean public since they stepped up their economic pressure over THAAD. Beijing’s economic retaliation has included the ban on selling tourist packages to Korea as well as cancelled concerts and a block on Korean entertainment content being uploaded to streaming sites.

According to a new report from the Korea Institute for Industrial Economics and Trade (KIET), “China’s ban on South Korean cultural imports will amount to 5.6 trillion won (US$5.02 billion) and 15.2 trillion won (US$13.6 billion) in direct and indirect damage in the consumer goods distribution sector” if it continues for six months. New numbers from the Korea Tourism Organization show a 66 percent year-on-year drop in Chinese visitors in April, driving much of the estimated losses for industries such as clothing and cosmetics.

“It’s quite difficult for South Korea to improve its relations with China because public understanding of China has deteriorated over several months,” Choi said. “So unless there is a positive sign coming from China on this economic pressure, it is very unlikely for the South Korean government to improve drastically its relations with China.”

Now that China seems to be offering an olive branch, public opinion may begin to shift back in Beijing’s favor. But after months of panicked headlines over China’s latest crackdown, it’s unlikely that one fantasy romance drama will be enough to turn things around entirely.

At this point, Beijing may continue to roll back its content and tourism bans in the hopes of wooing President Moon to their point of view, or as a face-saving measure. Either way, though, Chinese leadership would be ill-advised to hold their breath for a THAAD removal.

Jenna Gibson is the Director of Communications at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Image from LG전자’s photostream on flickr Creative Commons.

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Is Trouble Bubbling Under the Surface of South Korea’s Tourism Boom?

By Jenna Gibson

Walking down one of Seoul’s many shopping streets, sandwiched between food carts and two-story portraits of the latest k-pop phenom, store clerks hover, calling out to the crowds as they pass by in various foreign languages. “Ohayo gozaimasu! Nihao! Hello! Come in! Big sale today!”

They know their audience – tourists in South Korea, especially those from nearby Japan and China, are spending a huge chunk of their time – and money – stocking up on popular Korean products. According to new numbers from the Korea Culture and Tourism Institute, tourists visiting South Korea spent 5.5 trillion won (around $4.8 billion) on shopping in 2015. That’s 52.8 percent of the total 10.4 trillion won foreigners spent on travel in Korea last year. This was followed by lodging at 23 percent, food at 8 percent, and medical at 3.9 percent.

Korea Tourists Graph

Interest in Korean products, especially in the cosmetics industry, can be directly attributed to the popularity of the popular actors and singers who smile out from nearly every shop window. According to a recent survey of foreigners in Seoul’s busiest shopping neighborhoods, more than two thirds said they became interested in Korean cosmetics products after “getting to know Korean dramas or K-pop stars.” This led the study’s author to conclude that “Interest and affection for Korean culture, or hallyu, has a direct correlation to growth in the cosmetics industry.”

According to the Gangnam District Office, which oversees the k-pop mecca of Seoul, use of Chinese UnionPay cards in the Cheongdam-dong neighborhood jumped from 5.2 billion won in 2012 to 26.3 billion won in 2014, a five-fold increase.

In a more shocking example, after a Korean boy band member mentioned Ryeo Shampoo on a Chinese reality program, the brand’s sales skyrocketed 630 percent. The shampoo’s domestic sales also increased by 300 percent at the time – its manufacturer, AmorePacific, attributed this increase to Chinese tourists stocking up while in Seoul.

But this reliance on the whims of hallyu fans, coupled with some recent scandals about shoddy tour services, indicate that trouble may be bubbling under the surface for the Korean tourism boom.

Doubling Down on Hallyu

To fully capitalize on the influx of k-culture fans visiting South Korea, the government is trying to introduce new ways to connect with their favorite songs and TV shows – and spend more tourist dollars in the process.

Gangnam, a neighborhood in southern Seoul, is leading the charge. Gangnam’s Cheongdam-dong area is home to the headquarters of many of the major entertainment companies, and is notorious among for hallyu fans for celebrity spotting. “This place is packed from morning to night with foreigners who want to spot K-pop stars,” a worker at a Cheongdam-dong café told the Korea Joongang Daily.

The Gangnam District Office aims to capitalize on this interest through several new projects – from renaming a major street “K-Star Road” to unveiling a gargantuan statue in the shape of Psy’s hands that automatically plays “Gangnam Style” when visitors walk by.

All of this is about bringing hallyu tourists – and their wallets – to Gangnam. “Every fourth Friday of the month we plan to block a part of 79 Apgujeong Road that passes the JYP Entertainment building to host K-pop concerts and souvenir pop-up stores, developing the region into a ‘K-pop special economic zone,’” Park Hee-soo, head of the tourist industry department at the Gangnam District Office, told the Korea Joongang Daily.

Gangnam is not alone. Paju, a city north of Seoul, has announced that they will be turning Camp Greaves, a former U.S. military facility where parts of the ultra-popular drama “Descendants of the Sun” was filmed, into a tourist destination. This move is likely trying to repeat the success of Namiseom, a small island that experienced a spike in visits after being featured in the k-drama classic “Winter Sonata.” Even now, more than a decade after the show aired, the island gets 3 million visitors a year (up from 270,000 in 2001, prior to the Winter Sonata craze).

Quality over Quantity?

But some have been overzealous in their efforts to attract tourists. A recent scandal exposed the background of some Korean travel agencies that target Chinese tourists. Because of the intense competition to serve the increasing number of Chinese visiting Korea each year, some agencies have resorted to paying Chinese travel agencies a commission to secure customers while slashing prices. This results in tour packages that include cheap hotels, low-quality restaurants…and plenty of trips to the mall.

To make up for lost costs from tour packages, these tour companies make deals with shop owners to get a commission from sales. In some cases, the Joongang Daily discovered, Chinese tourists were brought to six shopping malls in just two days.

These issues have the serious potential of souring Korea’s reputation as a tourist destination. One local newspaper in China covered the issue in an article titled “Korean tourism Ends up Being Pathetic,” telling the story of a travel guide who wouldn’t let the tour bus leave a shopping center because the passengers didn’t spend enough money.

“The cheap group tours are not only unprofitable but also hamper the national image, which could cause damage in the long-term. We have to change the tourism paradigm to focus on value-added programs,” an official from the culture ministry told Yonhap News.

The Korean government is working to address this issue. The Ministry of Culture, Sports and Tourism has started cracking down on these tour package programs, dealing with 6,175 complaints in 2015 and revoking the license of 68 tour operators for “offering unreasonably cheap tour programs and hiring unqualified tour guides.”

It’s possible the industry can ride high on the Korean Wave for quite some time – skeptics have been predicting the death of hallyu almost since its inception and it has only continued gaining strength. However, rather than investing so much in a potentially fleeting trend, the Korean government needs to take a serious look at diversification. As Lee Hun, a professor at Hanyang University, told Yonhap News, “It is time for the tourism industry to shift priority from quantity to quality.”

Jenna Gibson is the Director of Communications at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from Rolf Venema’s photostream on flickr Creative Commons.

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Is K-Beauty the Next Hallyu Superstar?

By Jenna Gibson

Amid plunging exports, Korean cosmetics brands are defying the odds. According to new numbers released by the Korea Chamber of Commerce and Industry, exports of beauty products are up 53 percent in the first nine months of 2015 even though exports as a whole are down an average of 6.6 percent.

“Experts say the business strategy of product differentiation was the key to success,” writes the Korea Joongang Daily. “Korean cosmetics makers have mainly been focusing their export business on facial makeup and skincare products – such as Cushion foundation, BB cream and facial mask packs – instead of color cosmetics products, where European companies are dominant in the global market.”

Cosmetics giant AmorePacific is leading the pack. The company’s revenue jumped 20 percent in 2014, making it the world’s 14th largest cosmetics company. Meanwhile, Forbes listed AmorePacific at No. 28 on its annual list of the World’s Most Innovative Companies. Investors cited “AmorePacific’s innovations and booming Chinese business as some of the key drivers behind its success.”

But K-Beauty has gone far beyond China. After opening its first European store in Berlin this February, cosmetics store Missha opened three flagship stores in Spain last month. According to the Korea Trade-Investment Promotion Agency (KOTRA), Spanish imports of Korean cosmetics have skyrocketed from 250,000 euros in 2010 to 2.61 million euros in 2014.

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K-Beauty and Hallyu

Fans of Hallyu know that many of Korea’s cosmetics companies rely heavily on celebrity endorsements – many stores in Seoul’s shopping district of Myeongdong plaster gigantic posters of the hottest actors and K-pop groups across their walls, and fans can earn special merchandise featuring their favorite celebrity for spending a certain amount of money.

In fact, a recent survey of foreigners in Myeongdong and Apgujeong shopping areas found more than two thirds of them said they became interested in Korean cosmetics products after “getting to know Korean dramas or K-pop stars.” According to the study’s author, a professor at Hanyang University, “Interest and affection for Korean culture, or hallyu, has a direct correlation to growth in the cosmetics industry.”

Visit Seoul, the official travel guide for the city, is capitalizing on this trend –cosmetics are second on the site’s list of Top 10 Items to Buy in Seoul. As part of the Hallyu section of their website they have a recommended “Hallyu Star Beauty Course,” that introduces a hair and nail salon as well as clothing stores that are frequented by popular Korean celebrities. Clearly, Seoul knows its audience.

And across the Pacific, this year the United States’ Hallyu mecca, KCon, featured workshops including “Korean Celebrity Skincare Secrets,” and “K-Pop Idol Makeover” as well as booths from many of Korea’s top brands, hoping to capitalize on Hallyu fans’ interest in all things Korea.

Breaking into the American Market

Despite their success at Kcon, many of the big Hallyu trends that have caught on in Asia, the Middle East, and South America have been unable to break into the mainstream in the United States. K-pop acts like the Wondergirls and BoA have tried to break into the American music market to no avail, and while Dramafever has more viewers than ever, we’re never going to see My Love from the Star on during primetime.

K-Beauty, however, may have managed to break out of niche popularity. Sephora, a Paris-based cosmetics retailer with stores across the United States, began carrying Korean cosmetics brand Dr. Jart in 2011 and has since stepped up its offerings. Sephora’s American website has an entire section dedicated to K-Beauty, urging customers to “Get the latest from Korea: the coveted dewy look.”

Perhaps more telling, this year Amazon added a Korean Beauty subcategory within its beauty department, giving American consumers access to all their favorite cleansers, foundations and lotions without the international shipping costs. Even Target has hopped on the bandwagon, adding AmorePacific’s Laneige line to its premium skincare product aisle in 2014. Clearly K-Beauty is on the rise in the United States.

Jenna Gibson is the Associate Director for Communication Technology and Programs at the Korea Economic Institute of America. The views expressed here are the author’s alone.

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