CORPORATE DIET PLAN: New Year’s Resolution 2024

ARE YOU MAKING PROGRESS?

As we face the last week of the first quarter of 2024, we must account for our P+L (Profit + Loss).

During the last three months, I have been blessed to share deep conversations with old friends, colleagues, and industry gurus face-to-face (my preference is physical presence) on Google Meet, Zoom, Webex, and MS (Microsoft) Teams.

My tech prophet friend just returned from the Valley (Silicon Valley) to share his view that since 1994, he has never seen such chaos and excitement. He is a three-time Valley startup entrepreneur, so I have always valued his foresight and firsthand experience. My latest Valley and tech news are from “The Information.” As we know, more data we have regarding source, quantity, and quality is paramount to help us forecast the future. However, the most important thing I learned as the Chief Growth Officer at Kantar (previously TNS, Millward Brown, Research International, part of Bain Capital) was the Norm.

In Korea, 10 April will be the litmus test for the current administration for the next three years as we go to the polls for the National Assembly Election. Three hundred seats are up for vote. I rarely write about politics or religion as they divide rather than unite readers.?

Look at the forthcoming Presidential Election in the USA. Take two of Biden versus Trump. We all worry about whether the mature gentleman (the same age as my father) or the reality showman will take the White House. We must pray for “God to save America and the RoW (Rest of the World),” both in reality and as a joke.

The Korean economy is in dire straits.

The advertising marketing communications industry has always been hyper-sensitive to the macroeconomy. That’s why I left in 2021 after my five-year gig at Havas (Vivendi) to marketing data analytics consulting company Kantar (Bain Capital).

Companies cut marketing budgets during dire straits. I saw it happen in 2008 in London when Lehman Brothers induced the Global Financial Crisis and during the COVID-19 crisis in 2019 in Seoul. Sadly, more than a third of marketing agencies in London went under. I hear contraction (aka negative growth) among most advertising companies in Korea. The top dogs are Cheil (Samsung), Innocean (Hyundai, Kia), HS Ad (LG), Daehong (Lotte), and a long list of a thousand boutique agencies.

1Q 2024 KOREA SCORECARD?

Will you be posting positive or negative growth during your first quarter?

According to the Hyundai Research Institute (hri.co.kr), Korea’s domestic economy has hit bottom. They forecast a positive note for Korea’s exports compared to last year, thanks to the recovery of semiconductors. However, they worry about a possible ‘overkill’ (i.e., delay in the economic recovery) due to high-interest rates and external factors that may drag the economic recovery. I read more of a bear market than a bull for the rest of 2024, although the Japanese stock market is booming. The summary seems to be a slower U-shaped recovery than the Korean ‘pali pali’ (Korean for fast, quick) V-shape.?

The three caveats are:

1. US Fed’s pivot timing - will they lower the interest rate after June?
2. China liquidity trap - will they manage 5% plus growth?
3. The resilience of the domestic market - will things improve despite the highest personal and SME loans and construction industry defaults (ignited by Taeyoung)?

As of today, I am pessimistic about our economic outlook for the rest of 2024.?

I have zero faith in the government’s economic policy, which is more damaging than supporting businesses. According to the latest polls, the 10th April election will accelerate the current government’s lame-duck syndrome.

WHAT SHALL WE DO?

As a growth consultant, my recommendation is three-fold:

1. Re-group (aka restructure, refocus, realign) your business after an in-depth search of your core growth markets in Korea
2. This is my least favourite pill to prescribe, but most businesses need to cut their compensation ratio to improve margins or even stay afloat.
3. For domestic companies, leveraging digital platforms and AI is imperative to targeting global markets with hyper-niche and hyper-personalized marketing and sales after hacking two to three potential growth markets with a shoestring budget.

I enjoyed meeting with a global music company in India last week. When I mentioned AI, I heard great trepidation about generative AI. However, it was a very positive meeting for big data, predictive analytics, and increasing efficiency and effectiveness in their marketing. Now that India has overtaken China in the pole position as the largest population in the world, I am pro-India. We had the J-pop (Japanese) for music, and thanks to the BTS and Black Pink, we have K-pop (Korean). But I-pop (i.e., Indian popular music) will be next. Here we come, Bollywood.

Thank you to my Indian big brother @VishnuMohan for the introduction.

P.S. My tech prophet mentioned selling his Amazon share and buying Nvidia. (This is his personal view, and this is not financial advice. Please note that stock prices may go up and down, so consult a financial advisor before investing. My personal recommendation is Endowus.com if you are in SG and HKG)

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