Does anybody remember the news back in September 2006 about the Samsung phone breakage video? The video, once posted on YouTube, featured a young woman breaking a new thin Samsung Ultra in two pieces. The real stir came up when it removed since the origin seemed to be Samsung’s competitor Motorola.
At the time Samsung was indignant:
Samsung…suspected that the handset used in the film had been damaged earlier to make it appear easy to break. “The phone is not easy to break because it is made of new materials such as fiberglass-infused plastic,” a Samsung spokesman said last week.
Regardless of origin, apparently there may be something to the video. The Korean Consumer Agency released complaint statistics on phone damage, and Samsung was second:
The Korea Consumer Agency said yesterday that it had gotten 31.2 percent more complaints last year about damaged cell phones than it did the year before.
As consumers increasingly prefer slimmer designs, damage to the main boards and liquid crystal displays — two essential parts of cell phones that are vulnerable to external shocks — have surged over the past year,” said Park Jae-gu, head of the agency’s research team that handles consumer dispute settlements.
…
Samsung Electronics had the second-highest number, at 13 percent…Next were LG Electronics, Motorola, VK and KTF.
In its defense a Samsung spokesman points out that the number is quite low, considering its 50% market share in Korea. However it is notable that these statistics are somewhat self-selective. That is to say that to be included as a statistic one actually has to go through the Korean Consumer Agency. Assuming decent customer service, one could influence the numbers by preempting the complaint. Equally notable is the agency did not break down complaints by model. So who knows the exact amount of complaints on the Samsung Ultra phone that was the subject of the original Motorola video.
I bring all this up since it is rather illustrative of a problem with a buzzword in use in Korea, but rarely practiced. And that word is “transparency”. Things like this only raise doubts about Samsung’s quality, and their obfuscation of the Consumer Agency’s statistics, as well as the incomplete disclosure by the agency, only makes one wonder.
This would be a capital opportunity to practice the “transparency” Samsung’s exec’s preach.
16 Comments
In my professional capacity, I work with several companies who have to deal with the Consumer Protection Board and its enforcement of “law” under the Consumer Standards Act (formerly Consumer Protection Act). The Consumer Protection Board is consistently ignorant and misinformed about the law it’s applying.
Transparency is an all too common buzzword thrown around by the companies here. I’m sure there have been improvements since the Asian crisis, but a Korean accountant at my company with experience on both sides of the Pacific says its a joke here. He says that foreign investors don’t trust the annual reports from Korean companies because its so easy to cook everything and make it look rosy. He says the devil is in the details if you know where to look and a much more realistic picture can be gained through other sources. Unfortunately, such difficulty in finding out what is really happening behind the scenes at many companies is nearly impossible for your average retail investor (myself included).
And this distinguishes it from every other ROKGOV agency how?
Actually, the Financial Supervisory Service and Ministry of Finance and Economy are pretty well-versed in their respective areas of competence, as is the Fair Trade Commission. The Consumer Protection Board and the National Labor Relations Commission are standouts in their stupidity and consistent refusal to be bound by the law when determining what’s “fair”.
There must have been a marked improvement at FSS AND MOFE since I dealt with them, then. As for KFTC, yeah I guess the fault lies with the law itself.
No, no — the FSS still sucks. But they do know very well the various financial-related laws that they refuse to apply consistently and fairly, instead preferring to rule by whispered threats. It’s possible to have informed discussions with FSS, which is what makes the agency’s conduct thereafter so infuriating. Same for KFTC, although of late that agency seems to be getting serious about implementing consumer-oriented competition law.
The CPB and NLRC, however, are just ships of fools, captured by the professional victims’ lobbies of their respective areas of competence.
If I can pile on, the Korean Food and Drug Adminstration is the absolute WORST IMHO.
As far as best I do not know, but the Customs Service should get a gold star somehow.
Interesting stuff, guys.
I’m not being snide, either. It’s interesting to hear informed opinions on how government agencies work in this country. Thanks.
Echoing Snow’s opinion, please elaborate on why the Korean FDA is the worst.
A little off the precise issue limned by Brendon, but two of the major problems with KFDA (and the law under which it operates) are:
1. the unnecessary duplication of testing for admission into Korea of drugs, foodstuffs, etc. that have been exhaustively proven elsewhere, accompanied by the required provision of formulation and process documentation (for the purpose of?) that is then typically turned over to domestic companies to enable them to create generic versions and/or substitute competitive products; and
2. admission of materials subject to certain substituted ingredients for the Korean market, usually accompanied by a “recommendation” of the local competitor who can manufacture the reformulated product for the local market (pending its development of a copycat product of ots own).
Brendon,
Did one of your customers ever get in trouble for the cryptic English of the interface of its cell phones sold in the Korean market?
A bad habit of most Korean government agencies is their “leakiness” with respect to any competitive information of foreign companies of which they happen to come into possession. It is an all-too-common experience of foreign companies that their business secrets get turned over to favored domestic champions. Not just with the KFDA, although they of course are one of the worst offenders. This is decidedly not the sort of government “transparency” the foreign business interests perennially request, but it’s what they get.
Brendon,
Any truth in the rumors of a certain American retailer getting fleeced by its partner who stole its business model and now operates a major retail outlet in Korea?
I don’t know what you’re talking about, but that’s basically the objective of any joint venture, anywhere. That’s why all the buzz in China is about WFOEs — Wholly Foreign-Owned Enterprises. Nobody wants to be forced into a joint venture with a local partner who doesn’t add value, or who simply extracts value from the foreign partner. In many Korean-foreign joint ventures the Korean partner does add significant value, be it in the area of purchasing power, access to distribution networks, or government relations. Historically it’s been less true in the area of “know-how” or technical prowess, but these days in many manufacturing and technological industries the Koreans — who just a few years ago were completely dependent on technology-transfer — have solved many problems and have a lot to teach a joint venturer. They’re going to enjoy getting fleeced by the Chinese.
It’s no secret that Korean mobile phones last more than 2 years at the most. It’s just a rumor, but there is a saying that Korean phone makers intentionally design and produce their phones in such a way that they will break or stop working after a short time, in order to increase consumption of mobile phones in the local market. And well, Samsung electronic products are crap. Despite the low number, it’s no surprise that they made no. 2.
It’s also no secret that Korean bureacrats don’t know the regulations that they are working under. They are also well known for their haphazard enforcement or non enforncement of them. If one was to watch a Korean news broadcast where the reporter asks a bureacreat, “Do you know of such and such regulation?” The bureacrat with his/her face hidden and the voice changed usually answers “Gee, I wasn’t aware that it existed”
Also, the problem when it comes to government-corporate relations in Korea is that the government agencies, instead of regulating and overseeing the corporations, act like they are a division of the corporation they are supposed to be regulating.
Considering the above, it’s no wonder Korea was ranked 33, in the foreign capital hospitality index. Compared to Singapore(14), Hong Kong(8), and Japan(3), it isn’t good.