Chaebol.com has reported that the Top 10 largest companies in Korea account for over 76% of the Gross Domestic Product of Korea, while the top 30 companies on the Korean Stock Exchange account for over 59% of the value of the market. The statistic is alarming to outsiders, but not surprising to those on the ground in Korea.
Samsung: 21.9 % of GDP
Hyundai/Kia: 12.6% of GDP
The fear has always been that Korean conglomerates' abuses in the local Korean market leaves few companies capable of competing, thus, weeding out potentially successful companies. The largest conglomerates are doing the same abroad through dumping and other market manipulative tactics.
The Korean government has, facially, tried to protect consumers, subcontractors and competitors, however, the government and even the courts have been reluctant to do anything, but give these companies a light slap on the wrist. A reality that may lead to a Korea that will hit a wall and, then, languish in irrelevancy like Japan.
Sean Hayes, IPG's Co-Chair of the Korea Practice Team, may be contacted at: SeanHayes@ipglegal.com