Episode 174. Our advance.
The head of the shopping mall division, Park Si-woong, visited me with his father, Park Soo-han, the head of Hwadong Department Store.
I greeted CEO Park first.
“Nice to meet you. Representative Park. Everyone, this is Jaewoon Kang.”
He looked at me with complicated eyes and then opened his mouth.
“..hello. This is Park Soo-han.”
We sat on the sofa and continued our conversation.
“I have heard from Manager Park. It must be difficult to do business right now, but how about coming into the shopping mall section after all this has happened? As you may know, Lude has also been running the Lude department store section of the shopping mall since last month. We plan to halve the number of offline department stores by the end of this year, and then continue to gradually reduce the number after that. The same goes for Lude Mart, a large mart chain.”
CEO Park shook his head.
“It cannot be. Lude and we have very different positions. For Lude, department stores are one of many businesses, but to me, department stores are everything. It has been 30 years since my father started as a dressmaker and has been with this department store, which he passed on to me. There is no place that has not been touched by me, even the small lights of department stores. How are you going to throw it away?”
“What if I don’t throw it away? Are you still going to be on a sinking ship like this?”
CEO Park laughed bitterly.
“It’s a sinking ship… It’s not a big mistake. But there’s no point in throwing this ship away, right? Online and offline sales are completely different. Let’s say we get together and enter the shopping mall section. We will not be able to provide offline customized service, which is the unique strength of Hwadong, and if that happens, we will lose our greatest weapon.”
“At least one of what you just said is wrong.”
“..Am I wrong?”
“yes. Hwadong’s biggest weapon is not the face-to-face service, but the brand itself, which CEO Park has built up one stitch at a time over the past 30 years. Thousands of people across the country have seen the name Hwa-dong over the past 30 years and bought clothes, and they still do. That’s something a startup like us can’t keep up with in a short period of time. If Hwa-dong enters our shopping mall, the brand alone will be quite competitive compared to other companies.”
CEO Park, who could not find anything to refute, kept his mouth shut for a while, then I continued.
“And if you come to our Damoye shopping mall, there is a way to apply the customized service that CEO Park is confident about. For example, when a customer who likes bright knitwear logs in, the first thing that pops up on the screen is something like that.”
“..Of course, if you know what your customers are, there is a way to use customized services. But how do you know what your customers are going to be online?”
“Our Damoye database contains all the product list information that each customer has purchased or viewed. By looking at that information, you can get a rough idea of what your customers are like. This is a service that only Damoye can provide among many online shopping malls. Our shopping mall is the only online shopping mall in Korea that has received so many customers and has systematically managed customer information.”
The future is the information age.
Because online service providers like us can accumulate data and how they use the accumulated data to determine their competitiveness.
I have been meticulous in data accumulation and management since the early days of Damoga establishment.
Thanks to that, Damoye was already using various new technologies, such as demand forecasting techniques, which were introduced 10 years from now, in shopping mall sales.
When I finished my words, CEO Park’s eyes fluttered.
“…really…you mean that such a service is possible?”
“That’s right. Hwadong still has a lot of potential to sink as it is. Why not try a second voyage by moving to a sturdy ship called Damoye? Anyway, if price competition continues like this, large offline retailers such as Hwadong and Hwanseong will be the first to refuse due to cost issues, and apparel brands with large offline stores will follow. After all, after just a few years, the distribution industry will be unified by us. Outside of us, only small online businesses will survive.”
“Damoye is also running an offline store called Dao Mall, right? But how can you keep the unit price so low?”
“Our Dao Mall does not require a lot of labor costs. Most of them are done by customers themselves. Besides, if you’ve been to Dao Mall, you’ll know that I hardly ever did any interior design, and products that use electricity such as lighting are used to a minimum. Inventory management is also handled by each seller, so our maintenance cost will be less than a tenth when compared to offline stores of the same size.”
I spoke calmly to CEO Park, who was immersed in thought.
“Of course, no matter what type of business you take, over time, competitors will appear. It can be seen from the fact that similar companies are already appearing one by one following our sales. However, Damoye’s own clothing brands are being launched one after another, and they have services that other companies can’t match, such as introducing a luxury store for the first time as an online company. If the CEO just changes his mind, we will change from the worst competitor to the best partner.”
CEO Park, who was still staring at the table, raised his head.
“After listening to President Kang’s words, I think I was thinking too narrowly. Whether offline or online, I had to take the method that would give the most satisfaction to the customer, but I must have been immersed in inertia without realizing it for a long time. We will seriously consider your proposal.”
“haha. Think slowly and decide.”
As CEO Park stood up, he glanced at Team Manager Park Si-woong and asked me.
“This is a personal question… my son, how are you doing?”
“It just hurts my mouth. He is the best ace in the shopping mall division.”
The corner of Park’s mouth went up for the first time.
“This is one of the happiest news I have ever heard. Then we will contact you soon.”
Team leader Park Si-woong, who was seeing off CEO Park, sent me a thank you note.
I quietly answered his greeting.
As they left the office, I smiled.
“It feels good.”
I haven’t gotten a definite answer yet.
Judging by Park’s expression on the face, there was a high possibility of consent.
If Hwa-dong joins, it was only a matter of time before Hwanseong-affiliated Korean department stores and Gowon department stores surrender their white flags to me.
Since I control more than 60% of the apparel market, it could be said that Damoye’s rival is no longer there.
I was sitting alone with Executive Vice President Shin Hyun, the head of the network division.
“Shin, Mr. Let’s enter the American market.”
Director Shin made a look of great surprise.
“The American market?”
Director Shin opened his mouth with a troubled face.
“Um…unlike Korea, the US market has different communication laws in each state, so it’s like 50 countries are gathered together. Therefore, it is difficult to obtain business licenses, and since the land is so large, the facility investment cost is several dozen times higher than that of Korea… Is there any reason to enter the US market?”
“Is there only one more reason? That’s because the US telecommunications market is huge. The mobile communication service market alone is worth 340 billion dollars per year, or 340 trillion Korean Won. In addition, even Sprinter, the last of the four major telecommunication companies, has an operating profit margin of over 13%. Doosung Telecom, the No. 1 telecom operator in Korea, accounts for about 9%. In addition, the size of the telecommunication equipment market is about 70 trillion won every year. Where else can you find such an attractive market?”
I didn’t tell the new manager.
There was also the purpose of establishing a communication infrastructure so that the D-phone could be sold in the United States as well.
“..Yes, but the influence of the four major carriers is quite strong, so I’m worried that they will be able to beat their competition.”
“Even though we have 4G communication technology?”
“4G communication is certainly a groundbreaking technology, but in the US market, we are a new company and a foreign company, so will it be a weapon that can overcome such bad conditions…”
It seems that the threshold of the US market is high enough to say that even 4G is not allowed.
I said as I looked at Manager Shin wagging the horse’s tail.
“It may be difficult with only 4G communication, but I have one more weapon.”
Executive Director Shin thought about it for a moment and then exclaimed.
“ah..! You are referring to the product that you were preparing secretly.”
“yes. I can assure you, when that product and 4G communication are combined, even the four major carriers will not be able to stop our advance.”
“Then we have a pretty good chance of winning. From now on, we will prepare to enter the American market.”
“yes. Please obtain business approval from the FCC and the state government first, and then establish a local corporation in the United States. It’s probably easier to start with the California side. I have a big factory there, so we get along quite well.”
Federal Communication Commission (FCC).
It is a public institution in charge of licensing and approval of telecommunications business in the United States.
To do business in the United States, you must first obtain FCC approval.
“All right. What is the speed of investment execution? If we work all over the country at the same time like in Korea, huge investment costs will be incurred all at once.”
“haha. The United States is at the beginning stage, so there is no need to start from scratch. After all, even if you try to build a communication network across the country, if there are no customers, you will only incur maintenance costs. First, pick a small city in California and build a 4G network.”
“Hmm…I understand what you are saying, but even if you make a 4G network on such a small scale, it is difficult to commercialize it. Who will use services that cannot be used outside of that area?”
“Right. So, there is one more thing the World Telecom US corporation has to do.”
“Please partner with a US MVNO operator so that you can use the existing 2G wireless network when you are out of the 4G service area.”
Mobile Virtual Network Operators (MVNOs).
It refers to a company that leases a communication network from MNOs (Mobile Network Operators) that have actual communication infrastructure such as Viewizon and Ae&T.
As Shin said, commercialization was impossible if the wireless communication service could only be used in the region.
However, it is not possible to make 4G service available all over the United States right now.
Outside of that area, the plan was to provide wireless communication services using 2G established by existing carriers.
However, direct contact with the four major telecommunication companies, which are still enemies, can raise awareness, so MVNO operators, who are using their networks, were a suitable partner to partner with.
