Who are the chaebols: 6 facts about South Korea’s most influential families

Hyundai employees wouldn’t hesitate to beat the bear to death. Daewoo will call its president Kim Woo-jung and wait for his order. Samsung is reportedly holding a meeting – with the bear across the street – to discuss next steps. LG would wait for Samsung’s response and do the same. New versions of this joke continue to appear today, showing just how profound the chaebols’ influence on the life of their country is.

The term “chaebol” itself comes from two Korean words – “che”, meaning wealth and “bol” – family, clan. How do “wealthy families” manage the South Korean economy? Why, in dramas, is the rich heir not just an eligible bachelor, but a real prince on a white Genesis? Let’s start in order.

The origins of the chaebol structure date back to the 1960s, when the country was recovering from the Korean War. At that time, in order to revive the economy, the government provided comprehensive support to local businesses. Promising companies received tax breaks, special loans, subsidies and other benefits from the government.

Some chaebol companies trace their heyday to the Japanese occupation of South Korea, which lasted from 1910 to 1945. The Doosan group, focused on heavy industry, generally traces its history to the country’s last royal dynasty. But all these stories emerged after the chaebols became the most powerful engines of the Korean economy.

Founded in 1938, this company is the largest chaebol. Initially involved in the export of fruits, dried fish and noodles, it is now involved in electronics, luxury hotels, hospitals and much more. Samsung Electronics is the group’s largest subsidiary, accounting for approximately 14% of South Korea’s GDP.

Founded in 1947, the company was initially active in the construction sector. The company currently operates in the automobile, shipbuilding, finance and other sectors. After the death of its founder in 2003, Hyundai split into five different companies. Hyundai Motor is the world’s third largest automobile manufacturer and Hyundai Heavy Industries is the world’s largest shipbuilder.

This company was founded in the early 1950s following the purchase of the Chay family by Sunkyong Textiles. The group today has around eighty subsidiaries, which mainly operate in the energy, communications, finance, insurance, construction and chemicals sectors. SK Telecom is the country’s largest wireless carrier and SK Hynix is ​​the world’s second-largest memory card maker.

LG gets its name from the merger of Lucky and GoldStar. Initially, it was engaged in the production of chemicals and plastics, but later began to actively invest in consumer electronics, telecommunications networks and other industries. In 2005, LG spun off into a separate company called GS, whose main businesses include energy, retail, sports and construction.

This chewing gum company was founded in 1948 in Tokyo, but was moved to South Korea in 1967. Lotte Group is involved in the food, theme park, department store, electronics industries , energy and others. The company is the world’s third-largest producer of chewing gum, and its 123-story Lotte World Tower in Seoul is the country’s tallest building. And yes, Peppero, Milkis and Choco Pie are also Lotte.

Chaebols are typically owned and operated by a single family dynasty, most often the founder of the business. Members of this family hold key leadership positions, giving them greater control over the business. Even if the founding family does not own the majority of shares, they can still retain influence over the company.

Chaebols are often compared to Japanese keiretsu business groups, but there are important differences between them. Chaebols are generally controlled by the founding families, while keiretsu are run by professional managers. In chaebols, power is concentrated in the hands of a single family, while in their Japanese counterparts, control is distributed among different companies.

Chaebols have been criticized for hindering the development of small and medium-sized businesses in South Korea, creating significant imbalances in the economy. The South Korean government has attempted to limit the power and influence of the chaebols, but these efforts have not always been successful.

Another problem with chaebols is that the concentration of significant business resources in these conglomerates could threaten the stability of the South Korean economy if they fail. Their ability to innovate and grow may not keep up with the pace and agility of small businesses in other countries.

The love story of a rich heir and an ordinary girl is a favorite theme of Korean drama writers. It’s no wonder that many viewers are interested in the difference between on-screen chaebols and the real rich. Basically, they are inspired by reality, but they still cannot do without exaggeration. For example: there aren’t many chaebol girls in dramas, but in real life their number is increasing.

On screen, chaebols are always dressed in fashionable and luxurious clothing. Surprisingly, in real life, chaebols seem to be extremely frugal people, and each of them has their own favorite brands (not always luxury).

But there are some things that dramas get right. The subject of study is of interest to parents of all incomes. Even from the 3rd generation of chaebol, the basic standard is undergraduate and graduate study abroad. Even if you are the son or daughter of a business leader, it will be very difficult for you to receive an inheritance without a prestigious education.