,Ng Zhu Hann: South Korea’s economy have always been dominated by “Chaebols” for most of the past century. The word Chaebol is a combination of the South Korean words chae (wealth) and bol (clan or clique). It essentially means family-run conglomerates with businesses across diverse industries.
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THERE was once a boy in South Korea who lived in poverty, growing up with five siblings raised by his grandmother, in a one bedroom apartment within the poorest neighbourhood of Seoul.His father was a pen factory worker while his mother was a hotel housekeeper.
Despite the adversity in life, he was extremely driven and often motivated himself by writing Korean quotes in his own blood.
He was the first of his family to go to college and gain admittance in 1986 at the prestigious Seoul National University. There, he learnt about the Internet and embarked on his entrepreneurship journey through technology.
He is Kim Beom-soo (also known as Brian Kim), the founder of Internet giant, Kakao. Kim overtook Samsung’s heir Lee Jae-yong as the richest South Korean on 23rd of June with a net worth of US$16.2bil (RM67.1bil) following his company’s share price ascend by more than 110% in 2021.
Apart from the heartwarming rags to riches element to this story, what is especially significant is the fact that South Korea’s economy have always been dominated by “Chaebols” for most of the past century.CLICK TO ENLARGE
The word Chaebol is a combination of the South Korean words chae (wealth) and bol (clan or clique). It essentially means family-run conglomerates with businesses across diverse industries.
Chaebols rose to prominence post 1950s Korean War as it played a key role in lifting the war torn nation out of poverty and rebuilding the economy for its citizens. It relied heavily on government support as well as favourable policies to build up its market position. It was a win-win arrangement for the country as the government needed to create employment, feed the people and grow the domestic economy. Chaebols became the prime vehicle that steered the country forward.
Today, they have grown so big that it has overbearing influence not only within South Korea but globally with household names like Samsung, Hyundai, LG, SK and Lotte. The pie chart above shows the percentage of revenue as compared to the country’s gross domestic product (GDP) for the five biggest South Korean conglomerates as at 2019.
What is particularly fascinating is the concentration of wealth and influence on business entities like the Chaebols that can be found in other Asian countries as well.
In Japan, there are the large general trading companies with hundreds of years of history known as the “sogo shosha”. These companies has its roots in 1800s when Japan opened up to foreign trade during the Meiji-era.