PopularAsianProducts
is changing and Korea is now changing. For
instance, everyone in the younger generation
wants to buy a car—that is new here; and they
know they will not be able to buy a house, it is
too expensive. So they maybe have more to
spend on other things.”
One aspect of Korean business life that has
not fully changed, Dr. Noh says, is the large
black-market and intricate system of middle-men that many shop owners still rely on for
much of what they buy. Because no taxes are
paid on black market purchases, it is difficult
for Costco to compete. Although the government has made some strides in combatting
these illegal operations, the problem is far from
being solved, he says.
Costco’s response comes from its basic
principles, according to Dr. Noh: “We point
out that we supply reliable quality in a safe
environment.”
Unique Asian products include:
Frogs Taiwan seasonal item. Packaged belly up to
show that they’re gutted. 12-pack
Chickens
Rotissierie chickens sold with head on in
Taiwan to indicate freshness.
Durian Fruit
“Pungent” is the best way
to describe the taste of this
spine-covered delight.
Fish are sold with heads
on—alive!
Although Min Sook says she enjoys her
current position as buyer for basics and domestics, chances are she won’t be in that role for
long. For Min Sook is ambitious, something
Korean women have not been able to openly
admit for very long. She acknowledges that one
reason she left Shinsegae for a job at Costco
Dr. Noh
was that she felt she would have a better chance at advancement. “I would like to
work in many different buying departments
and then someday become a warehouse manager,” she says. “I know that will be a long
time, but I am young and willing to work hard.”
Indeed, according to Don Burdick, Ms. Sook
has won the respect of everyone she works
with, and such ambitions could be realized
some day.
Ms. Sook, who has worked at the Seoul
location since before it opened, says at first
members “were frustrated ... they were expecting a department store and said, ‘Is this all?’
Then they saw the prices and were very surprised and pleased.” Much as in other parts of
the world where Costco operates, word of
mouth eventually spread and now she sees
members accepting “the Costco way.”
Min Sook
Of course, not all of the challenges in
Asia involve East/West cultural differences.
For example, the high cost of real estate in
urban areas has caused Costco to rethink the
very concept of the design of its warehouses,
perhaps one of the most basic of the company’s basics. The result? The Seoul
location became the first multi-story
location opened by the company. It
features two rooftop floors of parking
with two floors of shopping area, plus
a floor for administrative offices. An
escalator especially built to accommodate carts links the floors. Today, there
are other multi-story Costcos in such
places as Taiwan, Mexico City,
Brooklyn and San Francisco.
Key employees
for Costco in
Korea are Dr. Noh, top, Min
Sook and Hyun Soo Pae.
Mr. Pae
Still other kinds of challenges face
Costco’s management team in Asia.
Although the excitement of an exotic for-
eign assignment might seem appealing to some
people, the search for people willing to make
such a commitment is not always easy.
Mike Sinegal, country manager for Japan,
recently completed putting together his team,
who will open the Costco warehouse in
Fukuoka, on the northwestern coast of Kyushu,
about 600 miles from Tokyo. “People worry
about living in a culture that is so different,” he
notes. “Eventually, you have to find the people
who are most flexible and who are ready to
forge into new territory, not just do things by
the book.”
Fortunately, Sinegal and the other country
managers in Asia are able to draw on a pool of
more than 60,000 Costco employees around
the world, and they always end up finding the
right teams for the job.
“Yes, there are concerns and even some
sacrifices to take an overseas assignment like
this, but the rewards are there and they have to
do with more than just the money,” Burdick
says. “The chance to really create something
new and to have an effect on how the business
operates is one of the things that keeps me
going.”
For now, the decision seems to be to
focus on the largest countries and strongest
economies of Asia. Countries such as
Malaysia or Indonesia are apt to be further
down the road. But, as in its many other arenas, Costco will not be closing the door on
any opportunities it finds on the world’s
largest continent. C
