Can South Korea’s untouchable chaebols change?

There are 82 chaebols in South Korea as of 2023. These are conglomerates that are usually run by one single family, with total assets that exceed 5 trillion Korean won ($3.69 billion).

And the revenue of the 10 biggest, including Samsung, Hyundai and LG, accounted for almost 60% of South Korea’s GDP in 2021, or more than a trillion dollars.

These sprawling business dynasties have helped transform South Korea’s economy from one of the poorest in the 1960s to one of the largest exporters in the world.

Tae-Ho Bark, president of the Lee & Ko Global Commerce Institute, who also served as South Korea’s trade minister from 2011 to 2013, told CNBC in an interview that the policymaking of Park Chung-Hee, South Korea’s first president, is credited as the origin of the Korean conglomerate.

″[Chaebols] did a good job for the country,” he said. “They also created many jobs for the people.”

Despite this remarkable growth, there are calls for change and innovation to propel South Korea forward, due to anti-chaebol sentiment fueled by corruption and financial scandals that involved the heads of conglomerates like Samsung and LG.

CNBC reached out to multiple chaebols for comment, but none replied.

Sang-in Park, an economics professor at Seoul National University, said that South Korea’s rapid economic growth contributed to the unchecked power of the Korean chaebols.

“Due to the financial liberalization, Korean big chaebols can finance by themselves, using insurance companies and security companies,” he said. “They became very independent from the influence of the policy itself or the bureaucrats’ control.”

Watch the video to find out more about the history and future of the big business groups in South Korea.

#CNBC #SouthKorea #Samsung #Hyundai #LG

Correction: This video has been updated to accurately reflect that the leaders of some South Korean companies were pardoned for their crimes.

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[CNBCi]

Do you think South Korea's chaebols need to change? Why or why not?

[rasdan]

"Can South Korea Chaebols change" has the same energy as "Can American Big Companies stopped messing with the government and the people?"

[alexshi]

Korea is a small country. It doesn’t have the market size such as the US or China to have diversification and the level of competition. So what you get is specialized corporations that monopolize a whole market segment. It’s similar to when the US was smaller and chaebols are comparable to the Carnegie’s, Vanderbilts and Rockefellers of the day

[multatuli]

Every countries got their own version of chaebol, it would never change unless there's an extreme change they couldn't adapt.

[mansour]

In saudi Arabia there is only one Chaebol, the saudi family

[Fanaro]

If you "help the economy" then suddenly you now have the right to infinity forever apparently.

[yyhkodu]

It's unlikely to change. The model has worked for S Korea.

[passionistaable]

Actually, most of founders of start-ups(like KAKAO, NAVER) have worked for Chaebol groups, then established their own company with the experiences, networking in Chaebol groups. As a Korean, I am sure that Korea would not have become this wealthy without the Chaebols.

[beatmoney]

Chaebols, despite their vast scale, have managed to thrive primarily because their ownership is concentrated within a small number of family members. This concentration of ownership fosters bold decision-making, especially when it comes to exploring new business ventures, thanks to the strong ties and mutual trust among family members. In contrast, corporations led by salaried CEOs, who lack ownership stakes, often exhibit caution and are less inclined to pursue aggressive business strategies due to the fear of failure.

[furus]

"I reached out to multiple chaebols but none have replied to me"😂

[Grandesecole]

Korean chaebols bring in money to Korea from exports. They just don't suck up all the value in their domestic markets but actually adds more to the economy through RnD investments. Huge difference from conglomerates in SE Asia where they just do telecommunications, hotels, and retail that is actually "easy" compared to manufacturing sector in a global scale.

[JoseReyes-ynxj]

The only way for the economy to develop further in the best way possible is with diversification, fierce and fair competition, and a robust social net to give everyone a fair shot at opportunity.

[HKim]

The irony is the chaebols offer the best pay packages because they aren't just domestic brands and get revenue from outside of Korea.

[spider]

The power of chaebols in SK economy is massive. So a competition from China is disastrous for them as all private companies accounts only 40% of Chinese economy.

[classicofVic]

actually, Korean conglomerates are doing fierce competition between them in every sectors in Korean market. Monopoly is very rare.

[Velkm]

The s. Koreans need to do some reform of the chaebol system but overall Koreans and the chaebols transformed South Korea . South Korea also successfully democratized and has functioning democracy even though they have these powerful families . South Korea should be an inspiration for countries undergoing brutal occupation and dictatorships.

[antonios]

These are just yet another example, of corporations being given whatever they want, because they serve the best interests for a capitalist society and market.
We all know, what horrible methods and inhumane practices are used, to make most of our devices/electronics etc, some of us may know, that these Chaebol families are using their families power, to do as they like, because they know, essentially they’re untouchable.

At what point, do our morals and values in life, became a factor?

[hamidmalik]

When did you have time to research in Indonesia about our chaebol too.

[Joan-qegm]

I love her. I love her post-it note graphics!

[TV-rfhq]

Why should it change? And why only on Korea?