86: Chapter 86 Entering the Dragon Kingdom Market

In early July, the rainy season in Seoul had not yet ended, and the air was as humid as a towel that couldn't be wrung dry. In the conference room of the International Business Department at Shunyi Foods headquarters, the air conditioning was set very low, but the collar of Kim Sang-woo's shirt was still damp. He stood in front of the projection screen with two thick research reports laid out before him—one with a Great Wall pattern on the cover and the other with a map of Southeast Asia, its corners already frayed from flipping.

"Chairman, these are the research reports for the Chinese and North American markets. They were co-authored by McKinsey's Seoul office and the Boston Consulting Group, finalized just last month." Kim Sang-woo opened the Chinese report, sweat trickling down his temples from his forehead.

Chairman Wang Shunyi sat in the main seat, with summary versions of the two reports spread out before him, each over thirty pages long. He flipped to the chapter on the Chinese market and stopped.

"Let's hear about China first. Director Kim, just highlight the key points; no need to read out the data."

Kim Sang-woo nodded and flipped to page five. "China's instant noodle market had total retail sales of approximately 80 billion RMB last year, equivalent to 15 trillion Korean Won. Master Kong accounts for 35%, Uni-President for 20%, Jinmailang for 15%, and Baixiang for 10%. The total share of Korean brands is less than 5%, mainly supported by Samyang fire chicken noodles. Young consumers have a high acceptance of spicy flavors, and fire chicken noodles have consistently maintained good buzz on Chinese social media."

"What about consumer preferences?"

Kim Sang-woo quickly flipped the page. "Chinese consumers like spicy and numbing, hot and sour, as well as local specialty flavors like Chongqing Noodles and Wuhan hot dry noodles. Price sensitivity is higher than in Korea, with mainstream products priced between five to ten RMB. The channels are different from Korea, with e-commerce accounting for over 40%. We must enter the three platforms: Taobao, JD.com, and Pinduoduo. Shelf-life regulations are also stricter than in Korea, and the customs clearance process is slow, so we need to account for the time lost between leaving the warehouse and hitting the shelves."

Chairman Wang Shunyi tapped his fingers lightly on the tabletop twice. "If we are to enter, what is the biggest problem?"

Kim Sang-woo swallowed hard. "There are two. First, product localization. Although our fire chicken noodles have brand recognition, the flavor is singular; we must develop a Chinese version of the flavors."

"Flavor profiles like Chongqing Noodles and sesame sauce noodles are already being tested by R&D. Second, channels. The rules of Chinese e-commerce platforms are complex and a completely different beast compared to convenience stores. No one in our team has experience with Chinese e-commerce; we'd have to learn from scratch."

"What about Southeast Asia? Our existing markets need further cultivation. Does the report have any new suggestions?" Chairman Wang Shunyi asked again.

Kim Sang-woo opened the other report. "The annual sales of the Southeast Asian instant noodle market are approximately 5 billion USD, or 6.5 trillion Korean Won. We have already established a firm foothold in Vietnam, Indonesia, Thailand, Malaysia, and the Philippines, but growth is slowing. McKinsey suggests two things: first, launch limited-edition products for local festivals, such as the Mid-Autumn Festival in Vietnam or Songkran in Thailand; second, penetrate second- and third-tier cities, as we are currently focused mainly on first-tier cities."

Chairman Wang Shunyi closed the report and leaned back in his chair. Kim Sang-woo's pen scratched across his notebook as he waited for him to speak.

"China. Let's take China first. For Southeast Asia, deepen and perfect the existing markets; there's no rush to expand into new countries. Director Kim, you are responsible for formulating a detailed entry plan for the Chinese market. Localization, pricing, channels, and brand promotion—submit it within a month. Additionally, regarding the shelf-life issue in the Chinese market, have R&D and logistics work together on a solution; customs clearance time must be factored into the product life cycle."

At six in the evening, Chairman Wang Shunyi rang the doorbell of a private room in a Chinese restaurant in Gangnam District. Park Min-ji opened the door. Inside sat a man in his early thirties, wearing a deep blue suit, a white shirt, and a tightly knotted tie. His eyes curved into crescents when he smiled, and he held a kraft paper folder in his hand.

"Sunyi, this is Jang Jun-hyeok, my senior from university. He's the Business Director for Alibaba's Korea branch and spent five years doing cross-border e-commerce in China," Park Min-ji introduced.

Chairman Wang Shunyi extended his hand. The other man's grip was firm, his palm dry and powerful, with thick knuckles—the hands of someone who had used a mouse for a long time. The waiter poured tea, but Jang Jun-hyeok didn't drink, speaking first instead.

"Chairman Wang, Minji told me about your plan to enter the Chinese market. I've put together some materials for you to look at first." He pushed the kraft folder over, which contained a printed PPT in both Chinese and Korean, with terms clearly listed.

Step one: cross-border e-commerce. Open stores on Tmall Global and JD Worldwide first. Low cost, low risk—test the market response first. Step two: if they sell well, establish local warehouses in China to shorten delivery from a week to two days. Step three: once sales are stable, consider building a factory. Local production reduces costs and allows for local flavors.

Chairman Wang Shunyi read through it page by page, closed the folder, and pushed it back to the middle of the table, his gaze falling directly on Jang Jun-hyeok's face. "Director Jang, during your years at Alibaba, which Korean brands have you helped enter China?"

Jang Jun-hyeok thought for a moment, counting on his fingers: "Cosmetics, maternal and child products, food. Beauty brands are the most common; I've worked with two food companies. One made sauces, and the other made biscuits. The sauce company did 8 billion Won in the first year and reached 30 billion by the third."

"What pitfalls did you encounter?"

Jang Jun-hyeok smiled. It wasn't a bitter smile, but the calm self-deprecation of someone who had been burned many times. "Too many pitfalls. Trademarks being squatted on, packaging designs being fined for violating Chinese advertising laws, and losing money because contracts with distributors weren't properly vetted."

He paused, "The biggest pitfall for food is the shelf life. A product with a one-year shelf life in Korea might only have eight months in China. Our customs process is slow; by the time the goods reach the warehouse, only half the shelf life remains. Distributors won't take it, and consumers won't buy it."

Chairman Wang Shunyi noted these points. The waiter brought in the dishes, and the three of them began to eat. Jang Jun-hyeok didn't eat fast, but he tasted every dish, talking about things to watch out for in the Chinese market as he ate.

The sauce for the braised pork was on the sweet side. He said that's how tastes are in Southern China; if Sunyi's fire chicken noodles were to enter the South China market, the spiciness should be reduced and the sweetness increased.

"Also, brand ambassadors. Korean brands like using celebrities, which is effective but risky. China's regulation of ambassadors is very strict; if a celebrity gets into trouble, the brand is liable for damages. You must include a morality clause in the contract to hedge against that risk."

Park Min-ji sat quietly to the side, picking at her food and occasionally interjecting. She placed a piece of sweet and sour pork in Chairman Wang Shunyi's bowl without saying a word. Jang Jun-hyeok saw it and smiled but didn't ask.

As the meal was finishing, Chairman Wang Shunyi raised his glass and looked at Jang Jun-hyeok. "Director Jang, Shunyi Foods is in need of a consultant for the Chinese market. Would you be willing?"

Jang Jun-hyeok was taken aback for a moment, then put down his chopsticks and raised his glass to clink it. "Chairman Wang, thank you for your regard. I won't take the consultancy for now, but feel free to ask me questions anytime. When your products enter China and you need my help, I'll take the title then."

Chairman Wang Shunyi nodded and drained his glass.

Park Min-ji walked him to the parking lot. Under the streetlights, her shadow stretched long, and the sound of her high heels tapped against the pavement. She walked to his right; they didn't hold hands, but their shoulders brushed occasionally.

"Minji, thank you for today."

"Don't mention it. I just felt that Jang Jun-hyeok's experience would be useful to you. He's been working hard in China alone for five years, helped many Korean companies, and suffered many setbacks. Listening to him is more effective than reading a hundred reports."

He stopped and turned to look at her. The light from the streetlamp fell on her face, softening her features, her eyes reflecting two small lights.

"Minji, once the business in China is settled, I'll take you to see the sea."

She smiled, looked down, and then looked up again. "We'll talk about it once you're finished."

She opened the car door and sat in the passenger seat. As he started the engine, she buckled her seatbelt, leaned back, and closed her eyes, her eyelashes trembling slightly.

He looked at her face in the rearview mirror. The sound from the air conditioning vent was very soft as the car slowly drove out of the parking lot. The distant Han River was dark in the night, the lights from the bridge reflected in the water and shattered by the wind, the light from Namsan Tower blinking. She opened her eyes at some point and looked out the window too.

"Minji."

"Hmm?"

"Nothing. I just wanted to call your name."

She didn't respond. The silence in the car was like a thin membrane enveloping the two of them; it wasn't that they didn't want to talk, but that they didn't need to. The car stopped in front of her building. As she unbuckled her seatbelt, she suddenly turned to look at him.

"Don't be in too much of a rush with the China business."

"I won't."

She opened the door and got out, walked a couple of steps, and then turned back to wave through the car window. He honked the horn once. The lights in the stairwell lit up for three floors and then went out. The entrance was empty, leaving only a black car and an engine that hadn't yet been turned off under the streetlamp.

He sat in the car and then drove off. In the rearview mirror, the light from Namsan Tower blinked as the car left the residential area and merged into the flow of traffic.

The Han River was dark in the night; the water was invisible, only the lights on the bridge could be seen. He drove without turning on the radio. His mind was filled with the pitfalls Jang Jun-hyeok had mentioned: trademarks, shelf life, morality clauses for ambassadors—the numbers blurred together.

A market of 15 trillion, a 5% share for Korean brands, the buzz of Samyang fire chicken noodles on Chinese social media. Tens of billions, hundreds of billions. His hands never loosened their grip on the steering wheel. It wasn't nervousness; it was that the string in his mind had been pulled taut. It hadn't loosened since his very first day running a street stall.