Wed, Jul 03, 2002 page12

• World Cup causes sales to spike for vendors in S Korea

  • BLOOMBERG
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  Street vendor Kang Sang-chul helped put South Korea in the red last month -- he sold thousands of the "Be The Reds" T-shirts that became a national uniform as World Cup fever gripped the nation.

  "I was getting up at midnight to stand in line at the wholesaler to buy red shirts," said 56-year old Kang, who sold about 1,000 of them a day for 8,000 won (US$6.66) each at Seoul's main bus terminal.

  

  A South Korean fan stroles into the Seoul World Cup stadium before the World Cup semifinal soccer match between South Korea and Germany in Seoul, South Korea, last week. A wide range of business enterprises in the North-Asian country gained handsome profits from the South Korean team's winning ways.

  PHOTO: AP

  The shirts gained in popularity as the South Korean team made a surprise charge to the semifinals of soccer's premier tournament.

  Companies from Hite Brewery Co to television-maker LG Electronics Inc reaped a windfall from South Korea's odds-defying winning streak at the World Cup, played from May 31 to June 30 in South Korea and Japan. The benefits to the country may go well beyond a month of higher beer and TV sales, analysts said.

  "Before the World Cup, people outside [South] Korea thought of the country as a small, unsafe place with labor unrest," said Park Tae-il, an economist at Hyundai Research Institute who expects the value of South Korean exports to rise by an average 10 percent because of the World Cup. "The tournament and [South] Korea's success will make investors take notice of us."

  South Korea's economy, which almost collapsed five years ago during Asia's financial crisis, is already outpacing most of its neighbors as consumer spending surges and exports end a yearlong slump. The central bank estimates growth may more than double to 7 percent this year.

  Now South Korea hopes the team's winning streak -- which included upset victories over European powerhouses Portugal, Italy and Spain -- will translate into an economic victory.

  The tournament ``will help boost confidence among Korean consumers as well as foreign investors,'' said Jim O'Neill, head of global economic research at Goldman Sachs Group Inc, who has tracked the links between soccer prowess and economic achievement.

  "The host countries for the games go for more robust consumer spending."

  Korea Development Institute, a state-run think tank, estimated earlier this year that hosting the tournament would inject US$604 million into South Korea's US$391 billion economy.

  At LG Electronics, the country's second-largest electronics maker, sales of plasma display panel TVs -- which start at 6 million won -- rose 70 percent in May, and projection TV sales more than doubled.

  "We've been running out of projection televisions as more households and restaurants bought big-screen TVs," said Park Seung-koo, an LG spokesman. "Summer is usually the slow season for TV sales, but the World Cup turned that around."

  KT Corp, South Korea's biggest provider of fixed-line phone services, said the 40 billion won it paid to be an official World Cup sponsor was money well spent.

  "Billions of people around the world saw our advertisements on the boards around the soccer field," said Lee Chang-jae, a spokesman for KT, which estimates the exposure is worth about 5 trillion won. "That will help promote our name to the world."

  That's not to say all Korean businesses welcomed World Cup fever. Restaurateur Kim Eun-joo was among those eager for the games to end. Kim, whose downtown Seoul eatery holds 140 people, said business slowed on days when South Korea played even though she spent 5.6 million won on a big-screen television to show the games.

  "We even handed out free liquor when [South] Korea won, but that didn't help sales," Kim said.
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