What's cooking, Korea?

In a recent focus on the decline of home made banchan in Korea*, Korea Joongang Daily mentioned busy schedules, and the boom in HMR (Home Made Replacement) products, new online services (e.g. The Banchan, about to be purchased by food major Dongwon Group), or restaurants proposing home food (jipbap).

Korea's tradition of homemade banchan is vaning. Many new products and services indeed (20160810 - twitter.com/theseoulvillage/status/763151485890809856)

To me, even more than the arrival of hypermarkets, the emergence of SSM or Super-SuperMarket  (dominated by the same oligopoly: Lotte Super, HomePlus Express, E-mart everyday) accelerated changes in HMR variety and packaging, particularly when it comes to targeting specific demographics, like single households. And as all the major producers seeked for differenciation, the HMR offer evolved from classic dishes to more creative recipes. 

Yet that creativity has yet to emerge for banchan in the Korean distribution, even online.

If theBanchan is more a food market before than a banchan specialist, it does offer a wide range of banchan, but without revisiting the classics. Furthermore, big food groups taking over this kind of potentially disruptive players doesn't bode well for diversity in the future.

I'm less worried about fewer Koreans preparing their own banchan - a logical trend - than about Korean palates being exposed to fewer kinds of banchan. And over the past few years, the decline in diversity for side dishes offered in Korea's mom and pop restaurants has been very spectacular. If it's linked to their struggle to stay in business in these times of crisis, old customer habits don't help: many remain reluctant to pay a fair price for Korean food (yet ready to pay way too much for mediocre Foreign food). 

The good news is that Korea, as usual experiencing societal changes at bballi bballi speed, seems to be rediscovering cooking way sooner than other nations. And not just young girls asking family recipes from their halmoni: people of all ages opening creative eateries, granddads venturing into the kitchen, food becoming a key driver in the startup ecosystem...

So be not afraid, Korea, and keep surprising us!

Seoul Village 2016
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* "Rise of pre-made banchan may herald end of an era: Busy schedules deal blow to culture of Korea’s quintessential side dishes" (KJD 20160810)

Welcome to Ulaanbaatar Village

I just returned from my first trip to Mongolia (UB, Gorkhi-Terelj National Park, Khovsgol Nuur) with a deep love for the country, its people, its rich and diverse nature and culture.

Yes, Ulaanbaatar is not much of a 'love at first sight' capital city, with its Soviet-size blocs and avenues, its lack of an old town, its pollution (coal power plants, heating, Gobi dust, traffic, air trapped by the surrounding mountains), or its extreme climate (minus fifty during the Winter, over thirty in the Summer - mercifully, no humidity, no mosquitoes), but it does have touching alleyways and traditional houses in its 'ger' areas (NB 'ger' is the Mongolian term for yurt).

A 'ger' close to the city center

Most 'ger' are located on the outskirts - particularly to the North. From a downtown tower, you can see them reach over the furthest hills (Note also the E-Mart* in the foreground - right).

We're not talking Seoul-style hanok clusters - ger are nomadic structures, not meant to stay all year round at the same place, and UB's ger villages are rather a symbol of urban sprawl caused by rural exodus. Many of their owners landed in Ulaanbaatar for lack of a better option, sometimes after losing all their cattle during an extreme winter, like that 2010 'dzud'. Most grabbed a spot illegally - it's okay to settle for a while, and each Mongolian citizen is allowed 0.7 ha for free in this vast, mostly uninhabited country (3M souls for 1.5M sqkm, not to mention 60M heads of cattle), but there are rules to follow to claim a land.

Ger villages themselves are evolving, and it shows as you move from the city center to its edges. On the furthest hills, the new lots look like miniature versions of the fenced properties you see in the countryside, there are not many structures beyond the ger, and even sometimes a few goats. Progressively, lots incorporate elements more common to shanty towns, or even upcycle containers. The proportion of traditional ger decreases, and small houses start to emerge, followed by concrete buildings along major roads that have been paved under a Mayor (Erdeniin Bat-Uul) who decided to invest a lot in these previously forsaken areas. Actual alleyways with street signage and numbers can be found more often, and where they meet the main roads, a few services illustrate how the shanty town is turning into a town.

As each individual transits from nomadic to urban life, a new kind of community is taking shape. For the moment, the density remains low because people who moved in could snatch decent space, and their kids don't need their own place yet. Many nomads watch the TV, charge their phones, and use mobile internet as they do on the go thanks to small solar panels, even if these neighborhoods have no electricity. Crime remains surprisingly low, and usually limited to petty theft, because that's not in the culture. And surprisingly enough, these neighborhoods are much cleaner than many cities, thanks to another good Mongolian tradition of respecting nature, public and shared spaces; just like you find well protected waste gathering spots by the roads in the steppe, people take care of their garbage in an orderly manner.

But the situation is already almost beyond control in most ger areas: no sewage system, no water system, a 60% unemployment rate, major health issues (e.g. people burning tires in their ger to survive cold winters),... and a demographic boom to cope with. Half the population lives in the capital compared to a quarter before the 1990 democratic revolution (Ulaanbaatar had 540,600 inh in 1989, over 1.3 M now), and tens of thousands more join these ger areas every year.

The social and urban planning challenges are titanic at all levels, particularly as the country stops posting record growth rates, and as the city tries to recover from a housing bubble. If Mongolia is seeking inspiration from other countries and particularly Korea, it can also try to leverage its unique assets.

I'll take 3 examples - transports, housing, and environment:

• Public transportation:  
• UB's subway project has been postponed several times, but should turn out well. A bit like Paris' Ligne 1, the first line would follow the central axis (17.7 km mostly along Peace Avenue). UB is also working on BRT (Bus Rapid Transit), and dedicated lanes that could make a big difference in a city clogged by traffic jams. 
• A 'maeul bus' system could be adapted to the ger configuration, maybe circling along each hill (the unit used in the steppe to measure distances), and connected to the main backbones of the network. The Mongolian people could also come up with a original system that honors their great expertise in logistics.

• Housing:
• UB is betting on apartments, and there are already many of these across the city, from the Soviet-era blocks to the luxury serviced residences South of the Tuul river (Gangnam, indeed!). Nothing adapted to the local context and culture. And I don't want these ger areas to be turned into soullesss 'apateu' bed towns like the ones Seoul built in the 80s. 
• At least, Seoul could leverage on Korea's village culture. And to me one of the key challenges for Ulaanbaatar is to integrate masses who grew up in an overwhelmingly nomadic culture into a diverse and future proof cityscape without losing anyone's identity. If UB is organized in big districts, they are not yet divided into neighborhoods, and something specific should definitely be considered for these vast ger stretches. As soon as possible.
• The new alleyways are created like long verticals, but gers, and hills are round. I believe in a grid that would have rounder nodes, and shared spaces allocated in advance to nature and community life. Right now you still can see the hills around you, but five, ten years from now, most people in the ger areas will be deprived of the view of nature, and that's a tragedy for a people of nomads who roamed such beautiful landscapes. No construction should be allowed on the top of each hill, and mid-rise structures preferred to towers for apartments, so that everybody can, at any moment, walk up a few hectometers and enjoy some feeling of space. And guess what? Each neighborhood map would look like a ger ceiling! Of course, urban continuity is also needed, and neighborhoods should not exclude each other, the aim is to bring people together, to go beyond hutong walls.
• Step by step(pe?), people will give some purpose to these empty spots, and who knows, some may become known for their wrestling events, their BBQ parties, or their song contests. The day people give a name to their own neighborhood, replace that stupid number with it! UB has a tough time mapping itself, and OpenStreetMap is working on it, but let's involve even more local populations.
• Mongolia can design land incentives to have people move to a different spot or a collective housing when needed - of course without creating inequalities with other regions and drawing more people to the cities.
• BTW, speaking of hill tops: remember the time you could see from a distance a red cross lit at night on the top of every hill in Seoul? And nowadays, a lot of Korean missionaries are roaming UB, because they know from the Korean experience that this urban boom is an opportunity to easily convert people who left the countryside...

Ulaanbaatar Northeastern ger villages on Google Maps: a classic urban sprawl with bottlenecks in the making and little harmony.

Landing in Murun, Khovsgol, a similar (sub)urban pattern
(20160728 - twitter.com/theseoulvillage/status/758486344020525057)

Great walks through Ulaanbaatar ger villages. Urban planning challenges similar to yet different from old Seoul's (20160731 - twitter.com/theseoulvillage/status/759713248941793280)

• Environment:
• Sound public transportation and housing policies are needed to improve air quality in UB. But removing these coal power plants would help a lot, and it's hard to give up coal when it's so cheap to extract from your own land. 
• As it happens, Mongolia was named after its blue skies, and enjoys over 200 sunny days every year, which is ideal to harvest solar energy. Yet you don't see many solar panels in the city center, and that's a shame. 
• Since many ger owners are familiar with the technology, ger neighborhoods must show the way and bring solar energy to the next level as they evolve - one more reason to prefer mid-rise structures, that won't take the sun from their neighbors. And let's seize the opportunity to design streets that don't freeze during the winter, public transportations that source their energy at least partly from the sun.
• Impossible weather and frozen soils make it difficult to grow vegetables outdoor? Ulaanbaatar could also become a model city for urban farming by using part of its abundant sunlight to grow indoor and off-soil, and starting with ger areas would be the easiest and most scalable way. Bonus: sustainable jobs within each neighborhood - straight from nomads to urban farmers!

Those are only random thoughts. Seoul Village has certainly no lessons to give to Ulaanbaatar Village, and to the contrary I wish that a few years from now, the rest of the world will visit UB for inspiration.

#Ger village, #Ulaanbaatar, #Mongolia

A photo posted by Stephane MOT (@stephanemot) on Jul 31, 2016 at 7:19pm PDT

Seoul Village 2016
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* hardly a surprise in a city where South Korean coffee franchises are multiplying, and where every other international restaurant seems to be Korean (including from the North).

Every other Sunday

From April on, all hypermarkets and big stores in Korea will be forced to close every second and fourth Sunday of the month. The measure aims at protecting smaller players, and diminishing the market share of chaebols.

Of course, HomePlus-Samsung-Tesco, Lotte, eMart-Shinsegae, won't not lose it all: expect even more crowded Saturdays, and the acceleration of substitution by online shopping. And naturally, the clock keeps ticking for the bulk of traditional markets.

Yet I see a potential boost for diversity in leisure and cultural activities.

Seoul Village 2012
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HomePlus virtual stores in Seoul subway : from your smartphone to Cannes festival screens

Cheil Worldwide won the Media Grand Prix at the 2011 Cannes Lions International Advertising Festival of Creativity for its amazing HomePlus campaign in Seoul subway, three years after claiming a bronze award for an outdoor advertising campaign "Plus to your life - HomePlus" with the same customer (Samsung Tesco).

Pushing to new levels the now decade-old barcode mobile advertising concept, "Homeplus Subway Virtual Store" transforms a subway station into a replica of supermarket where commuters can register and order online with their smartphones. This is not only spectacular and smart, but efficient : the number of subscribers and the turnover skyrocketed, helping the retailer overtake Emart as the national leader in online sales :



Of course, you don't want to miss your subway and you won't fill your virtual cart through this sometimes tedious process, but you can just load the first items and quietly finish shopping on the way home.

Expect more of these. I already can see Amazon setting up his own virtual libraries near rival brick and mortar shops...

Seoul Village 2011 - initially published on mot-bile ("HomePlus subway virtual store - 2011 Cannes Lions")
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Online sales become the first distribution channel in Korea - or is door-to-door back ?

When I first came to Korea 20 years ago, Department Stores were becoming the main distribution channel for many consumer goods, taking over traditional door-to-door sales.

Convenience stores (FamilyMart, LG25 - now GS25 -, BuyTheWay, 7Eleven...) were also gaining ground. Then came the hypermarkets (eMart, Carrefour at one moment, Samsung / Tesco HomePlus, Lotte Mart...), and the SSMs / SuperSuperMarkets (Lotte mySuper, HomePlus Express, eMart Everyday...).

One by one, small groceries / mom & pop stores closed, and traditional markets plummeted, killed by discount shopping (or supposedly "discount" shopping : a recent survey pointed out that for many food items, traditional markets are actually cheaper). Survivors could count on a system that protected both food majors and small distributors : product packaging including the price tag regardless of the sales channel guaranteed the same price for such basic items as instant noodles or ice creams. But this system is about to be abandoned and anyway, it didn't mean much anymore : big discounters sell their own brands of instant noodles, and my local SSM offers a year-round 50% discount on all ice creams.

Even as competition raged between discount shops, many opening 24/7/365, Department Stores (Lotte DS, Shinsegae DS, Hyundai DS, Galleria DS...), sometimes growing into ambitious complexes (ie Shinsegae Centum City in Busan) remained ahead for many consumer goods and fashion.

Until now : online sales have just become Korea's first distribution channel.

This doesn't come as a surprise for anyone living in "ubiquitous" Korea : beyond pure players (ie Auction), even brick and mortar leaders are pushing ecommerce very hard, prefering cannibalization to the loss of a customer.

Somehow, we're back to square one and door-to-door sales. The first door is your mobile, PC or TV screen, but everything is done to deliver it wherever you live (home deliveries keep booming), wherever you work (Seoul would collapse without cheap express deliveries), and even wherever you go (ie location based services and mobile couponing).

Like for ADSL or FTTH, Korea's economy of access is unbeatable. Because of urban density, because major players are ready to offer what comes as a premium anywhere else, and furthermore because in many cases for smaller fish, the last mile is provided by people working under the legal hourly wage, ready to make a buck even if it doesn't make any sense if you simply take into account transportation costs. When you see a truck carrying about five hundred eggs on a highway, you know something is wrong. And when you order a book online, the delivery person is rarely twice the same plain-clothes individual.

I guess that's one of the reasons why Amazon is not in Korea. The retailer tried to do some business via Samsung / SIMS more than ten years ago but failed. So Amazon ships from other countries to international customers while Kim & Chang law firm securely protects Amazon.co.kr URL.

Of course, Amazon would face pure players in cultural goods, such as Aladdin (now Aladin.co.kr), or Kyobo Book Center (very ambitious in the ebook ecosystem), but I don't think it's about competition : players differenciating themselves on logistic platforms tend to struggle here. Carrefour left the country in spite of commercial success for regulatory reasons : it couldn't operate with its usual purchasing power model. I think the logistics equation could be very tricky for Amazon.

eBay is faring much better in Korea (as Auction.co.kr) - it even wolfed down G-market, snatching it away from Inter Park... but eBay is more into auctions and C2C than into retailing and B2C. And when it advertised massively on internet shopping, big retailers pushed the pedal to the metal.

But the biggest revolution for e-commerce in Korea this year is the end of Microsoft Explorer's de facto monopoly since July 1st : since 1999, all online shopping and banking services had to use ActiveX systems, but the Financial Services Commission put an end to it following the recent boom in smartphones.


Seoul Village 2010