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(Yonhap Feature) At KCON, big company CJ E&M looks after little ones

All Headlines 09:00 April 20, 2016

By Park Sojung

CHIBA, Japan, April 20 (Yonhap) -- Anyone who is even vaguely familiar with South Korea probably heard about the exploits of its "chaebol," which have been instrumental in the country's rise from rags to riches, nonetheless, these same symbols of industrial prowess over the years have taken flak for not doing enough to help smaller companies.

Over in a not well publicized corner at a gathering in the run-up to KCON Japan, CJ E&M, South Korea's leading content and media company, has been waging a determined campaign to reverse the negative image of large business groups.

In the event, which is the world's largest K-pop festival, held outside of Tokyo this year, the chaebol company that owns cable channels Mnet and tvN was busy at work trying to hook up dozens of small and medium-sized enterprises (SMEs) from South Korea with potential Japanese buyers.

"Although China is rising rapidly, Japan remains the world's No. 2 content market and South Korea's biggest patron in the industry," Shin Hyung-gwan, the CJ E&M official overseeing KCON Japan, said in a statement prior to the event. "We will try to help South Korea's SMEs successfully gain a foothold into this expanding 'hallyu' market."

CJ E&M did so relentlessly, tapping South Korean singer Nicole as a model for these budding ventures. Nicole, who was part of the now-defunct girl group KARA, also donated 20 million won (US$17,000) worth of the SMEs' products to a center for the deaf in Tokyo.

To be featured at KCON, the companies needed to apply months in advance -- in the case of the latest KCON, in January. South Korea's Small and Medium Business Administration (SMBA) would then scan their profiles and hand-pick those deemed most relevant to "hallyu," or the global popularity of Korean pop culture. As a result, there has usually been an overrepresentation of businesses in fashion, beauty and lifestyle, according to CJ E&M.

The response among Japanese buyers this year has been mostly positive, according to executives of the companies interviewed.

"We spoke with five buyers over the course of two hours, and many seemed interested," said Eun Chae-jung, CEO of Marshique, a company that manufactures dryers for eyelashes.

South Korean trade officials said the friendly atmosphere was owed in part to the conciliatory mood lately observed in South Korea-Japan relations. The two countries signed a landmark deal in December to resolve the decades-old issue of Korean women forced into sexual servitude for Japan's World War II soldiers.

"It's meaningful that we are holding this event after relations between South Korea and Japan have come out of a long tunnel," said Chung Hyuk, the Regional Director General for Japan at the Korea Trade-Investment Promotion Agency (KOTRA). He pointed to the increase in SMEs participating in KCON Japan, from 32 last year to more than 50 in 2016. "This seemingly reflects the growing demand for hallyu-related products expected in Japan."

While many conglomerates have become aware of the importance of corporate social responsibility programs in recent years and have engaged in their own high-profile SME support programs, CJ E&M's method of promoting South Korean start-ups has been relentless and pragmatic, with the aim of appealing to consumers and potential business partners.

On the K-Culture Stage, famous YouTubers Calary Girl and Heopop discussed products taken from the SME booths to drum up visitor interest.

On April 9, Heopop waged a puzzle match with the audience using Beadspuzzle of Puzzlia, a South Korean start-up that develops educational tools for children. At one point, singer KangNam strolled through the SME exhibition on a whim, trailing behind him an entourage of fans eager to capture every moment of his existence.

By April 10, the traffic around the SME convention was noticeably greater, with one company claiming to have sold out of its facial masks. At O & Young Cosmetic's stall, signs that read "Sold Out" were plastered on the walls.

"People asked where they could purchase our face masks. It was actually awkward because we don't have stores in Japan yet," CEO Oh Se-joon said. The slogan of his company is "Desserts that make you pretty," with packaging designs reminiscent of candy wrappers.

Not all booths were as successful, however, with a maker of accessories using recyclable material reporting low traffic due to noise in the venue.

"We're not in a situation to sell anything because it's so loud in here," Kim Mi-soon, head of sales at L&J Co., said. Her company manufactures bags and wallets using cork oak, an environmentally friendly alternative to leather. The halls were indeed resounding with raving fans at the meet-and-greet corner and in front of the KCON Stage, where stars engage in mini talk shows.

Others lamented the mismatch between company profile and the nature of the event. The Zage, which creates accessories using Korean ceramics, said unlike at KCON in the U.S., few visitors in Japan seemed interested in their products.

"Many Westerners liked our accessories because they're different and unique. They also tend to travel with families, so the parents in the group are likely to purchase our products," CEO Lee Se-kyung said. "But K-pop fans in Japan aren't as financially versatile. They tend to focus on one product and ignore the rest."

For others, the B2B nature of the convention fit perfectly with their sales agenda. E&M Co., which produces hair coloring products, said because it is a wholesale company, it has benefited much from one-on-one meetings with potential buyers at KCON.

"We've met with 13 buyers at this event. Once we go back to South Korea, we will send them more information and documents needed for the next steps," Oh Jong-beom, E&M's general manager, said. "We'd definitely be interested in participating in next year's KCON Japan."


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