The extent of popularity of Idol-owned businesses in South Korea

The first instance of celebrity endorsement dates all the way back to the 1760s, when Josiah Wedgwood, the founder of a chinaware and pottery company, used royal endorsements to increase brand awareness. Ever since then, brands have been eager to land celebrity endorsements for their products, in an attempt to tap on the popularity of celebrities to achieve brand recall, and ultimately increase their sales numbers. With these famous faces being splashed across billboards, in magazines, and on the sides of trains and buses, it is no longer uncommon for celebrities to be associated with branding and advertisements.

Song Joong Ki is one of the most popular celebrity endorsers in Korea, and even in Asia

In South Korea, besides endorsing for brands out there in the market, there has been an increasing number of celebrities turned entrepreneurs in the recent years, with many of them venturing out of the entertainment industry to set up their own side businesses despite their hectic trainings and schedules. These side hustles often range from idol cafes and restaurants, to fashion clothing lines and dance academies. In this post, I will be focusing on the side businesses of two Korean celebrities, the leader of BIGBANG, Kwon Ji-yong (better known as G-Dragon), and Ha Dong-hoon (better known by his stage name, Haha), a host of the Korean variety show Running Man, to analyze the extent of popularity of idol-owned businesses in South Korea.

G-Dragon owns several side businesses, including his own fashion label PEACEMINUSONE,

a café in Jeju Island, Café Aewol Monsant as well as a pension hotel, Dolce Vita

Haha owns a Korean barbeque restaurant, Loco Quan 401 in Hongdae

The cost of supporting idol-owned businesses: netizens versus fans

Undeniably, a huge percentage of earnings from idol-owned businesses come from their fans themselves. Due to the unwavering loyalty of Korean pop (K-pop) fans to their fandoms, it is common to see fans, mostly young teens, forking out the little that they have to support their favorite idol groups. This willingness to pay, coupled with the craze and obsession of fans for their idols, are some of the key drivers that affect the success of idol-owned businesses.

However, there have been arguments claiming how idol-owned brands are ridiculously overpriced and thus unaffordable for young fans out there. G-Dragon’s fashion label PEACEMINUSONE was caught in a controversy when netizens pointed out how expensive the products are, with a t-shirt priced at 348,000 KRW (426 SGD) and a cap priced at 228,000 KRW (279 SGD). From an objective point of view, it is understandable why netizens were in shock when they found out that a relatively new apparel brand by a Korean celebrity has such hefty prices tagged to them.

A PEACEMINUSONE tee and cap cost 426 SGD and 279 SGD respectively

On the celebrity news site Allkpop, it was interesting to see the comments left on the article about the saga — with netizens slamming G-dragon for the use of his celebrity status to earn money, by charging exorbitant prices for plain basic apparel with his brand logo slapped on them. They also felt that he ‘lacks consideration for his younger fans’ by doing so. On the other hand, BIGBANG fans and fans of G-dragon defended him and said he can do whatever he wants to, since it was his own fashion line, and they should only buy it if they can afford it.

Allkpop reporting the news on the PEACEMINUSONE saga, and the comments of fans versus netizens

Despite the whole hoo-ha, the products on PEACEMINUSONE’s online store sell out almost instantly whenever there is a new launch.

The products on PEACEMINUSONE online store sell out almost instantly every time there is a new launch

Riding on the popularity of celebrities?

Many may wonder if idol-side businesses are popular solely because they are ‘idol-owned’. To a certain extent, these businesses have a slight edge over other new businesses in the market, due to the fact that the names of celebrities are tagged to them. However, for the sustenance of their businesses in the long run, it is important for them to survive the fierce competition, and offer products/goods of good quality to grow their customer base (to attract non-fans), while retaining the existing ones.

I did a quick search on Google to find out more about Haha’s Korean barbeque restaurant, and analyzed five (random) sites that I came across, ranging from personal blogs to food review blogs, and I found certain similarities in their entries. All five writers are global Running Man fans who travelled to Korea for a holiday, and they paid a visit to Haha’s restaurant to check out the food there. Though all of them mentioned that the prices were slightly on the high side, they felt that the service and taste of the food made up for it. A Singaporean blogger (chinchaijiak.com) even mentioned that the barbequed pig intestines were unique and nice enough for him to pay a second visit to Haha’s restaurant, and this was something he did not expect from a restaurant owned by a celebrity. This proves that although the popularity of idol-owned businesses might be due to the idol initially, other factors will determine their success in the long run.

Screengrab of a blogger's review of Haha's restaurant

The problem with imitation, and counterfeit goods

With high prices comes the issue of fake goods. On online shopping sites like Taobao and ezbuy, it is common to see sellers selling counterfeit items at lower and more affordable prices. I did a search on Taobao to find out if there were sellers listing PEACEMINUSONE products for sale. As expected, I found goods ranging from replica phone covers to black caps priced at 7.79 SGD.

A replica PEACEMINUSONE cap costs 7.79 SGD on Taobao as compared to 279 SGD on the actual site

7.79 SGD or 279 SGD? For fans out there, or even others interested in owning PEACEMINUSONE products, Taobao and other online shopping sites are convenient and accessible platforms for them to get hold of replica products at a much cheaper price. I went to have a look at the reviews of people who bought the PEACEMINUSONE replica caps. Most of them are young VIPS (BIGBANG fans) – like the one below – who couldn’t afford the real product and thus decided to settle for fakes.

Reviews by Taobao buyers who bought PEACEMINUSONE replica caps

However, it must be noted that such buying and selling of counterfeit idol-owned goods might ruin the reputation of the brand and leave them undesirable to customers who can afford the products.

The participatory culture

With the increase in social media platforms, fans and consumers have many more outlets to share their opinions online. These platforms also allow them to meet people with similar interests. As seen from the Facebook screenshot (left) below, the use of the #peaceminusone hashtag allows them to view PEACEMINUSONE products bought by people all around the world, and at the same time, browse through outfit inspirations and styles. Social media platforms are also good avenues for fans and consumers to leave their honest reviews. As seen from the other Facebook screenshot (right), there are reviews, generally positive ones, given by people who had been to Haha’s Korean barbecue restaurant. Additionally, fans and consumers are now able to record video logs (vlogs) and unboxing videos on YouTube, to document real-life experiences online.

Facebook screengrabs of #peaceminusone and Loco Quan 401 Restaurant respectively

A vlog of a YouTuber's experience at Haha's restaurant

Idols set up side businesses for a variety of reasons – for their fans, for their families or even for themselves, because the idol career in Korea is generally short-lived, and they cannot rely on their fame forever. Though these businesses might gain traction in the initial stages due to the hype and the popularity of the idol, ultimately, it takes a whole lot of effort to sustain the brand's image, and keep fans and customers interested in the long run.

References:

http://www.allkpop.com/article/2016/10/price-and-marketing-of-g-dragons-peaceminusone-products-infuriate-netizens

https://chinchaijiak.wordpress.com/2013/12/13/paljamakchang-running-mans-gary-and-hahas-shop/

http://www.travelbytez.com/2014/12/hahas-hongdae-restaurant-401.html

http://www.kyritravels.com/2016/07/hahas-401-restaurant.html

http://kavenyou.com/wanderlust-wednesday-k-bbq-with-haha-401-loco-quan-restaurant/

https://hellosihui.com/2015/04/12/hahas-401-restaurant-at-hongdae/

http://www.kpopstarz.com/articles/28748/20130524/super-junior-family-business.htm

https://world.taobao.com/item/541810461996.htm?spm=a312a.7700714.0.0.o1yDnY#detail

https://www.dramafever.com/news/song-joong-ki-most-popular-celebrity-in-all-of-korean-advertising-for-2016/

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