Led by the Three Eastern Provinces, i.e. Heilongjiang, Jilin and Liaoning, the Chinese economy had posted double digit growth for a decade. However, as China’s economic growth has decelerated sharply since 2013, the Chinese government led by President Xi Jinping has set forth a new Silk Road initiative in order to soup up the Chinese economy. The new Silk Road initiative revolves around creating a Silk Road economic belt, running from China through Central Asia to Europe, and building a land and maritime Silk Road of the21st century, stretching from Southeast Asia to Africa.
After striking an FTA with China, the Park Geun-hye government declared that it would ponder over the possibility of “Yellow Sea Silk Road Express," a project linking the Korean peninsula directly with China, in a bid to realize the Eurasia initiative, one of President Park’s campaign pledges.
Amid such efforts for closer economic ties between S. Korea and China, a Korean businessman ventured into the Chinese market to help many SMEs suffering from the global economic slowdown and won an unprecedented large-scale business deal from China. Thus, The Korea IT Times accompanied him on his business trip to China to learn more about his successful entry into the Chinese market.
The Korean businessman who clinched such a large-scale deal from China is Kwon Oh-seok, chairman of Giga Korea. Chairman Kwon confidently laid out a roadmap for Korean SMEs’ entry into the Chinese market, saying, “Korean SMEs will witness China’s insatiable demand for their products.”
Leading the fourth batch of Korean businessmen wishing to do business with China, Chairman Kwon is currently visiting Chinese business partners Citic Group and Guo Dunjivi. In partnership with state-owned Chinese conglomerate Citic Group, Chairman Kwon has set up Korean Goods Store at Citic City Plaza Shenzhen. And he is the man who has brought about a paradigm shift in the way online malls are run by launching an O2O (Online to Offline), multi-settlement personalized shopping mall platform in China.
GIGA Korea’s online shopping mall platform, the world’s first comprehensive online and offline shopping mall solution that benefits producers, sellers and buyers all at the same time, is a one-stop multi-settlement personalized shopping mall system that enables selling and buying to take place simultaneously under a single system in a hassle-free manner. In addition, by overcoming online language barriers and disparities in online payment systems among different nations, GIGA Korea’s platform allows global online shoppers to buy products easily through their own online payment systems in their own language.
GIGA Korea’s platform also lets anyone in the world shop via their mobile phones without running into any language barriers. Whatever devices you have, wherever you are, you can shop online on GIGA Korea’s platform. Moreover, on GIGA Korea’s platform, it takes producers only a single mouse click to sell their competitively priced products both online and offline at the same prices without worrying about inventory pileups.
“Since GIGA Korea’s platform is an online and offline total shopping mall solution that lets anyone in the world buy or sell products with great ease, it will give rise to a paradigm shift in the way online malls are run. Besides, GIGA Korea’s platform begs to differ with Alibaba, so it will overtake Alibaba in three years,” said Chairman Kwon.
Citic Shopping Center, run by Citic Group, one of China's biggest state-owned conglomerates
As a Korea IT Times reporter, I first visited Citic City Plaza Shenzhen.
Chairman Kwon has already guided a group of Korean businessmen wishing to open shops at Citic City Plaza Shenzhen to China on three occasions and helped them ink contracts directly with Citic Group Chairman Chang Zhenming. Citic City Plaza Shenzhen, one of China’s largest shopping malls frequented by young Chinese people, boasts daily foot traffic of 250,000 and is located at Science Museum Station in Futian District, Shenzhen. Citic City Plaza Shenzhen is also connected to the headquarters of Citic Group and currently houses roughly 1,000 local shops.
Giga Korea’s business partner Citic Group, a large state-owned enterprise founded under Deng Xiaoping's emphasis on practical measures for economic growth, started with a capital of 800 trillion yuan or won It currently engages in approximately 40 business sectors and has numerous affiliates. After signing a joint venture deal with Citic Group, Giga Korea formed a taskforce dedicated to its shopping mall business with Citic Group and had it stationed at Citic Group. The taskforce has thus far helped 180 Korean businesses open shops at Citic City Plaza Shenzhen. As of now, Giga Korea is working on the building of Korean Luxury Goods Store. Those who open shops at Korean Luxury Goods Store will be offered exceptional treatment: they can operate rent-free for the first year and receive free legal advice services.
“In June last year, Citic Group Chairman Chang Zhenming paid a visit to Giga Korea’s research center located in Gaoxinqi Science Park. At that time, I explained to him in detail our O2O (On line to Off line) total shopping mall platform technology. Impressed by the workings of our platform, he expressed his willingness to invest in our technology. After the meeting with him, I became convinced that I could expedite Korean SMEs’ entry into the Chinese market by helping them open shops at Citic City Plaza Shenzhen.
Guo Dunjivi builds GD GIGA China in 32 provinces and 300 cities in China.
My next stop was Guo Dunjivi, a Shenzhen-based Chinese company that Giga Korea signed a contract with to launch the GIGA Korea platform in China. Guo Dunjivi plans to build GD GIGA China branches in 32 provinces and about 30 cities and to sell Giga Korea’s platform nationwide in China. In addition, it will assist 180 Korean companies, which open shops at Citic Shopping Center, in making forays into the global market.
“In China where counterfeit goods are abundant, Korean SMEs’ products will find favor with consumers. Guo Dunjivi will first market their products in 300 Chinese cities and then expand its markets to Southeast Asia, the Middle East, the Arab world, the Persian Gulf nations, Muslim countries, etc.,” said Citic Shopping Center, CEO of Guo Dunjivi.
“Thanks to Giga Korea’s platform, Guo Dunjivi has been included in the CCTV 50 index, the first index released by China’s state media. Hence we earned the right to issue stocks worth 570 million yuan at the Shanghai Stock Exchange (SSE) in August last year. GD GIGA China will grow into a leading O2O total shopping mall that outstrips China’s largest online malls Alibaba and Taobao in three years,” He added.
Technology that S. Korea shrugged off goes global.
My third stop was Giga Korea’s research center in Gaoxinqi Science Park. “The development of GIGA Korea’s online shopping mall platform dates back seven years. At that time, people were unfamiliar with the concept of total online and offline shopping mall platforms. And the online shopping mall market had already reached its saturation point. Therefore, people hardly dared to embark on the development of an online shopping mall platform. However, I waded into uncharted territory, with a view to providing Korean SMEs with unconditional support,” Chairman Kwon mentioned. “S. Korea favors technologies developed either by large Korean conglomerates or well-known foreign companies. No matter how excellent a new technology is, it is rarely recognized in S. Korea. As a result, so many SMEs are folding at the moment,” Chairman Kwon added.
The popularization of mobile devices such as smartphones and tablet computers has made the bricks and clicks model (or the O2O (Online to Offline) business model) sweep across all industries. Global companies like Facebook and Amazon are also increasingly expanding their O2O services. Noteworthy is that Giga Korea has been engaged in the O2O business for a long time and has plenty of knowhow and patents under its belt.
The secret of Giga Korea’s successful entry into the Chinese market lies in its solution to online security issues. Information security has been a hot-button issue in and outside S. Korea. Maintaining information security requires strict regulations and technologies. The Chinese government is keen on scaling up information security.
“Since GIGA Korea is a foreign company, the Chinese government didn’t want personal information of Chinese people to be stored in our GIGA Korea solution. However, to operate our platform, personal information needed to be stored in our database. Thus, we have developed a solution that transmits personal information to China’s national security network server the moment any personal information is fed into our server and leaves behind converted bogus information in our server,” Chairman Kwon explained.
“China’s national security network server is run by three Chinese officials of different ranks, who have different cryptographic keys using different encryption algorithms. Thus, its system is designed to nip any attempts, even by insiders, to leak information in the bud,” said Chairman Kwon.
“We expect that 100 million numeral domains, one million producer accounts, 100,000 super administrator accounts, 10 million web pages, one million CP contents would be created by 2018. In the process, we will help Korean SMEs make forays into the global market in earnest. On the offline front, we will build more Korean goods stores in China, Vietnam, Cambodia, etc. so as to speed up their expansion into overseas markets,” Chairman Kwon said.
My last stop to wrap up this story was GIGA Korea’s lecture room, located at Shenzhen Bao'an International Airport (SZX). At the lecture room, the fourth batch of CEOs of Korean SMEs shared their thoughts on the group visit to China and their future plans. The CEOs said that the S. Korean government’s efforts to ease tricky customs clearance procedures and licensing issues left much to be desired. They called for the formation of task forces for speedy responses to various business issues by sector.
“GIGA Korea’s platform breaks down the barrier between online and offline sales and works towards creating a new economic structure by encouraging complementary interaction. Unfortunately, the S. Korean government’s indifference to this platform made me give up on its domestic market debut and head for overseas markets. GIGA Korea’s first overseas destination was China. As soon as I made up my mind, I hopped on a flight to Shenzhen with 17 researchers. On the flight to China, I was really at a loss just like Columbus hopelessly navigating uncharted waters in search of a new continent,” Chairman Kwon recalled.
“GIGA Korea will present a solution to the issue of failed capitalism discussed at the World Economic Forum in Davos. And we will create a new environment, where Korean SMEs feel the happiest and young people can paint a rosy picture about their future,” Chairman Kwon said.
