I would like to let ambitious/rash people like me know that you can find your own path and opportunities if you are willing to put in the work and take a risk. I’d also like to make mainstream the support and care for these people who risked it all and “failed” instead of just forgetting about them or worse. I want to promote a culture that destigmatizes failure because you can do everything right and still fail. I would like for people to focus not on the “success” at the end but at the “why” of it all, whatever your ambitions might be.
I had the pleasure to interview Hong Sang Ouk. Hong is the founder and director of TK101 Global. Tk101 Global is a marketing agency which helps companies break into the Chinese, Korean and Southeast Asian markets. A chronic workaholic, he likes to spend rare free time with family or thinking up new business opportunities.
Thank you so much for doing this with us! What is your “backstory”?
I was always interested in marketing in one form or the other.
From the very moment I had some degree of autonomy, which was in college, I expressed this interest in the form of getting elected president of the student council in Seoul National University.
Back then the political environment of Korea was very tense and at the forefront of the student body in college’s all-around Korea. Coming off the successful student led democracy movement just a few years prior, it was the transition period where fighting for political agency, freedom of speech and workers’ rights were was the flavor of the times and frankly was what all the cool kids were doing.
You could say that it was the counter culture in Korea where my passion for marketing was sparked.
This was the place where I learned to research “customer wants”, develop a “marketing strategy” and handle all the logistics involved, in an old school P.T. Barnum kind of way.
After college I further pursued my interest in marketing/politics by getting a job at SK Communications, a large telecom company in Korea.
It was here where I was trained in the traditional aspects of marketing.
This was the time when I started to get interested in digital marketing and search engines in general. It was still the early days of the net so not many people were paying attention to search engines as a respectable business model and especially not major corporations. I’m not going to say that I predicted just how big they would become (I would have invested my life savings if that were the case), I did however see an untapped resource to pivot towards.
I delved into studying as much as I can about search engines in my free time, starting with Naver then Google eventually settling on Baidu.
I left the company to strike out on my own trying out several businesses eventually settling on an online English teaching service.
My business partner handled the logistics of the education service while I promoted the venture.
During this business venture I would regularly get requests for help with breaking into the Chinese markets from my network and companies back in Korea. As word of mouth started spreading people started offering to pay me for consultation. People had heard of someone providing a lean and relatively low cost method to break into the Chinese market and wanted in. Instead of spending millions for physical promotions, heavily bureaucratic Chinese regulations and TV ads while competing with megacorporation’s, companies now had a way to circumvent these barriers to take advantage of a blue ocean opportunity that went straight to the consumer. We managed to carve out a little niche for ourselves and major companies and organizations like the Korea Tourism Board, Shinsegae Department stores, Lotte Department stores and Kose, have started approaching us in droves. Through sheer effort, some due diligence and a copious amount of luck, demand and profitability eventually skyrocketed to the point where the original business became an opportunity cost. We decided to continue the English as a second language service but in a limited capacity, diverting most of our resources and manpower into the marketing agency you see today. Nowadays we still provide the original SEO service but have evolved further in both capability and scope to cover marketing all around the Asia region with offers ranging from Influencer marketing, Youtube SEO to marketing software. As of late we are hard at work collaborating with the Korean Government to stimulate the local economy by eliminating spending bottlenecks of tourists and encouraging spending by tracking spending and travel behavior via our app.
Can you share an interesting story about a challenge that you faced, and how you overcame it?
I guess this is the juicy part everyone wants to read about. The part where I lay all my failures out in the open.
In the previous section I mentioned how I set off on my own to do business in China after a stint with corporate life.
I might have made it sound like everything went off without a hitch but in reality it was a LOT bumpier than I made it out to be.
My first business was a catastrophic failure
I leveraged myself too much and incurred a significant amount of debt to Chinese companies when the initial venture didn’t pan out.
It was the scariest time in my life.
You see back in the day the business environment in China was like the Wild West. Where laws were more like suggestions if you weren’t one of the big boys.
During this time I and my employees experienced constant harassment over my debts by hired thugs and organized crime.
My friends, family and employees urged me to leave the country stating how dangerous things were becoming.
It was scary but doing so would mean never being able to return to China. I’d be giving up on the huge Chinese market that I still placed so much fate in.
I decided to stay and tough it out much to the dread of my friends and family.
Eventually my creditors got impatient and had me abducted to hold me ransom to pay my debts. It was the scariest time of my life. After liquidating company assets I still needed the help of my parents in the form of their life savings to bail me out. I’m not proud of it but it allowed me to escape my captors but most importantly allowed me to continue my other businesses in China that weren’t gutted. Having burned my ships already I had no choice but to double down and make things work.
This was when I focused on my ESL business and eventually pivoted to marketing specializing in Baidu SEO.
To answer your question on how I overcame my challenges in China, it was a combination of EXTREMELY supportive parents, loyal partners and employees, pain and copious amount of luck.
Are you working on any new or exciting projects now?
We are currently collaborating with the Korean Government in a bid to stimulate the local economy. Tourism is a major source of revenue for South Korea, specifically Chinese tourists who shop while travelling.
We identified two major bottlenecks and presented a solution to the South Korean government. We argued that the language barrier and un-scalable overcapacity in terms of receiving customers and handling purchases were slowing things down drastically leading to lower satisfaction and unrealized purchases.
Finding competent multilingual staff is difficult and scaling the physical stores (where tax refunds are allowed) where they operate cannot be done without major financial risks (geopolitical posturing from China during the THAAD incident in South Korea led to a major decrease in tourism and exports. Major Korean companies like Lotte even had to shutdown operations in China because of it).
What we proposed to alleviate the problem is nothing groundbreaking. It was merely a practical application of existing technologies and methods.
We proposed developing a WeChat integrated shopping and travel app that would automate all the purchasing and tax refunds in a way that Chinese people are already very familiar with. This solves the problem of the bottleneck but it goes further than that. In addition to expediting the conversion process we also utilize customer data such as purchasing and travel behavior to provide rewards and coupons to further stimulate shopping behavior that is tailored to the individual app user.
With the bottlenecks removed and rewards given to match user preferences we not only make sales conversions more efficient we drastically improve the customer experience as well.
As for promoting the app itself, we will be working with individual department stores and shops to market the app in China.
With this pitch we beat out 150 other companies vying for the government grant to help stimulate the local economy.
What advice would you give to other business owners who do business in China, to help their employees to thrive?
While admittedly very difficult, I would strongly recommend you learn the local language.
When you can truly communicate with your employees in their own language, you open up yourself to more profound insights and strategies that are invisible to those without the same language skills. It doesn’t matter how brilliant you think you are, the accumulated genius of multiple people contributing their experience and creativity will dwarf any individual mind. Nothing works better for employee morale than to show them their input is appreciated and being used to great effect.
Lastly find trustworthy and loyal employees and here’s the caveat, TREAT THEM WELL.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
I have several people who I’m grateful for.
When I first started my business in China, a friend who I met in college showed me the ropes to get me started.
I’m very grateful as well to my Chinese HR manager who handled all the hiring and accompanying paperwork.
During the period of business crisis, I have several acquaintances in China who stuck by me and helped me navigate through the hard times that kept me sane.
Above all however, I am eternally grateful to my parents who were unerringly steadfast in their support and belief in me, going so far as to hand over their life savings as ransom when I was kidnapped by Chinese organized crime to allow me to continue my businesses in China.
What do you think are the new untapped markets in China that may become the next “big thing”?
When people say the next big thing they usually talk about the cutting edge and sometimes the fringe.
My views tend to be conservative albeit more on creative applications of existing methods.
I think the next big thing will be business models with the path of least resistance that target Chinese customers. Essentially just refining and cleaning up current customer service.
To use tourism as an example, many countries that receive and benefit from Chinese tourists are still woefully unprepared in receiving Chinese customers efficiently. There is barely any centralized effort to accommodate Chinese preferences such as payment methods, purchasing behavior and heck even just the language. Chinese tourists are some of the largest spenders when traveling. Combine that with the volume of travelers and I’m truly baffled as to why this isn’t widespread yet.
The same logic applies to high growth areas such as Beauty products and Healthcare as well.
We keep hearing about the “Trade War”. What are your thoughts about it? Given the unknowns, how do you plan to pivot?
Here in Korea we just recently recovered from the THAAD incident (Chinese Government mandated Boycott of Korean products and services due to US missile defenses being installed in South Korea). With China being Korea’s largest export destination it was a painful blow felt by the entire country. With China so willing to flex its economic muscles one can’t be blamed for being wary.
That said one must remember that the invisible hand bows to no government. One way or the other demand finds a way. With the Chinese of today being thoroughly globalized there is little a government can do no matter how autocratic to stifle the tenets supply and demand. Just look at the examples of the US war on Drugs, North Korean Kpop black markets, and American VHS’s in the Soviet Union. If a country as draconian as North Korea or as advanced as the US in spying on its citizens can’t keep a lid on forbidden items, I doubt China will manage to do so.
It eventually devolves into a waiting game until sanctions are lifted. Fortunately for us there are Chinese people all around the world outside of mainland China that can be catered to, so our bases are covered.
What are your “5 Things You Need To Know To Successfully Do Business In China.” (Please share a story or example for each.)
One) Try to learn Chinese, even if it is just listening.
Relying too much on interpreters has a tendency to bite you in the ass down the road. By being able to at least understand the local language you can analyze information in depth and make accurate decisions.
Two) You need to be motivated by something higher than money
a) You are far more likely to fail in business than succeed especially in an alien cutthroat environment like China. It is extremely easy to lose heart and give up halfway if you only focus on money. To harden your resolve you need a higher purpose.
Three) Having local partners you can trust is crucial
China is a large country with a diverse range of peoples. This leads to a lot of complexity and risk.
I strongly urge you to let your local partners handle all the logistics of running the business while you focus on your core service.
I guess what im saying is, Don’t be greedy.
The pie will be big enough for everyone and you won’t have to worry about problems down the road.
Four) Do not look at China as a single homogenous country. Preferences, styles and circumstances are vastly different per region.
In Guangdong province for example it reaches 86 degrees while Northern provinces never go above 68 degrees. Aside from climate there are also differences in language, religion and even internet connection.
There is no one marketing strategy to rule them all.
Each strategy must take into consideration regional differences.
Five) Choose a region that fits your product rather than the whole of China
Many people starting out in China tend to target Shanghai and Beijing immediately. This route is very costly and difficult to bounce back from if you fail. Therefore concentrate your efforts on regions that are more receptive to your product or service and expand from there one city at a time. One of our clients, Nu Skin, saw great success with this multi-stage strategy. Nu Skin had strong following with a particular minority housewife demographic in Southern GuangXi. We focused our initial promotions in the area to gain momentum before eventually expanding to different cities with the amassed goodwill and word of mouth. Had we started immediately in Beijing or Shanghai there wouldn’t have been a base of receptive followers to gain traction and we would have been tilting at windmills.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
One) You need to have Skin in the game
When you engage in business you will find people who are very easy to work with who offer the most amazing things. From my experience these kinds of people are fickle, undisciplined and untrustworthy.
You will want to work with people who don’t sugar coat things. The kind of people who will not hesitate to tell you hard truths from the very beginning. This kind of honesty will turn you off but if you can look through the initial displeasure, you will see that more likely than not all the compromises and demands are merely a responsible accounting for the things required to succeed in business.
Ultimately these efforts will lead to a sturdier partnership over the long-term.
Two) Warren Buffet said that “Only when the tide goes out do you discover who’s been swimming naked”.
We work with a lot of partners and promote their client products on their behalf.
When we fail to reach a goal or deliver subpar results, it is our partners who are hurt the most. Our partners have placed a significant amount of faith in us and it should be the utmost priority to make them shine in front of their clients. We have no wiggle room to rest on our laurels and have to deliver lasting quality every time.
In the same vein you will meet many silver tongued larger than life people who promise you the moon over your business journey. It doesn’t necessarily mean these people are bad but such grandiosity leads to a steady deterioration of the business relationship over time as expectations are not met. It is much better to under promise and over deliver. It might take some effort and you might attract fewer business partners but in the end the kind of relationships you form are sturdier and more rewarding long-term.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
When I started my first venture in China in my late twenties, I had no connections and weathered many storms to get to where I am today. While I still have long ways to go, I would like to let ambitious/rash people like me know that you can find your own path and opportunities if you are willing to put in the work and take a risk. I’d also like to make mainstream the support and care for these people who risked it all and “failed” instead of just forgetting about them or worse. I want to promote a culture that destigmatizes failure because you can do everything right and still fail. I would like for people to focus not on the “success” at the end but at the “why” of it all, whatever your ambitions might be.
Originally published at medium.com