Finance
[Weekender] Standing on their own: North Korean refugees test startup dreams
A growing number of defectors are pursuing unusual business ideas, not just NK-themed restaurants
Published : Oct 2, 2021 - 16:01
Updated : Oct 2, 2021 - 18:50
Ahn Myeong-hee, founnder and CEO of fashion startup Ryu Ae (Ahn Myeong-hee)
Ahn Myeong-hee, a 31-year-old defector from North Korea, was overwhelmed by the hardworking people, the rapidly changing social phenomena and the highly competitive environment when she first arrived in the South.

“One day I was standing at a subway station and watching people walking fast. It made me think that I’d really have to live my life to the full to become successful,” Ahn said. “At the same time, I appreciated the fact that you can see the outcome as much as the amount of effort you put in.”

After escaping from North Korea as a teenager, she started dreaming of becoming a trader while working at a tailor shop in China.

“In China, if your identity is unclear, you can’t picture a bright future, so I chose to come to South Korea to make my dreams come true. Perhaps because of the difficulties I had faced, South Korea looked like a land of opportunity to me,” she said.

In 2019, she launched fashion startup Ryu Ae with her sister, who works there as a designer.

Based on her experience in the textile industry, she is seeking business opportunities in the baby clothing market. “The number of newborns here continues to decrease here but ironically the market is expanding as family members, including uncles and aunts, give more gifts, spending large amounts on babies.”

Ahn and her team of four launched a baby clothing brand in March 2020, mainly producing organic cotton jumpsuits for infants. They are currently available through some 10 retail channels, including open marketplaces like Gmarket and Auction.

The brand uses 100 percent organic fabrics, certified by the Global Organic Textile Standard and made without toxic bleaches, dyes or other chemicals.

Unlike typical baby clothes, organic cotton products feature subtle earth tones instead of bright colors.

“They may not be as eye-catching as other companies’ products, but I know I am on the right path,” she said.

Ahn is one of a growing number of North Korean defectors looking to stand on their two own feet by launching startups.

No exact number is available to document how many North Korean defectors run startups or the size of their operations, but the growing number of startup accelerator programs is an indicator of an uptick in this trend. Currently a handful of organizations, including the Bridge and the Asan Nanum Foundation, offer support programs for North Koreans aspiring to be startup founders.

The Bridge, a Seoul-based nonprofit organization that empowers social entrepreneurs in developing countries and in South Korea, launched a startup accelerator program for North Korean defectors five years ago. The Asan Nanum Foundation, run by conglomerate Hyundai Group, runs Asan Sanghoe, a four-month entrepreneurship boot camp program for North Korean resettlers and foreign-born participants who speak Korean.

Their goals are to foster entrepreneurship for North Korean defectors by providing education, as well as by helping them develop marketing strategies and find investors and sales channels.

“There are some stereotypes regarding North Korean defectors -- that they are vulnerable and are in constant need of help. Indeed, there are many nonprofit organizations that are set up to address this sole issue because there are many North Koreans with the potential to make a startup,” Hwang Jin-sol, founder and head of the Bridge, told The Korea Herald.

“Those who have potential as businesspeople, from the startup industry’s point of view, may still need more time and effort to gain the necessary skills, making them appear less competent than South Korean startup builders. Therefore, those with potential in business are actually put in a gray zone,” Hwang said. “And we want to help them push forward and thrive in the startup area.”

Even though North Korean resettlers were brave enough to cross the border, it may be difficult for them to gain the skills they need to found startups considering the disparities in education and experience between them and their South Korean competitors. Lower credit scores also make it difficult for them to get much-needed funding.

A network of people connected through regional ties, kinship or having attended the same school is considered a valuable resource in South Korea. The Bridge focuses on connecting them with South Korean entrepreneurs to help North Korean entrepreneurs make up for the lack of such a network.

Even though it is premature to say that these programs have been successful, the latest generation of settlers from the North in South Korea show more diverse business ideas then they did just a few years ago, when North Korean restaurants were the main focus. Today they have expanded into web design and companies that sell preserved flowers.

According to a survey conducted by the Federation of North Korean Industries, an organization dedicated to North Koreans running businesses in South Korea, in 2015 the top two business sectors were restaurants and retail.

That trend is also reflected in North Koreans’ applications for startup accelerator programs -- their ideas are straightforward, and their target customers are typically their compatriots or Korean Chinese familiar with the culture that they hailed from. Simply put, they were not in the same ballpark as the IT-heavy startups that have become synonymous with success. Their ideas, such as North Korean foods and souvenirs, were rooted in the only things defectors could bring over the border with them -- their experience and craft.

Kim Ria, founder and CEO of Flower is Ria (Kim Ria)
But Kim Ria, another defector-turned-startup CEO, wanted to do something new. She started a business making preserved flowers -- something that doesn’t exist in North Korea.

“Preserved flowers are popular in Japan and in the US but North Korean people are not familiar with them,” she said. “It is a little pricy because of the costly raw materials, but I thought this is something that you want to receive as a gift.”

Before her defection from the North, Kim worked for a state-run company for two years and had to carry stones and soil for construction projects. Having been assigned to the job, she had no option but to work there 14 hours a day with no wages or any kind of reward.

“Work never ended there. People had nosebleeds due to harsh working conditions. They fainted in the sun. So I quit the job,” said Kim, who crossed the border eight years ago in fear of punishment for remaining unemployed for more than a year in the North.

Although her company, Flower Is Ria, is a humble one-person startup, she dreams big.

North Koreans are taught to lay flowers before statues of the country’s founder -- Kim Il-sung, the current leader’s grandfather -- and his son Kim Jong-il on the anniversaries of their births and deaths, but other than that, the state has no traditions involving flowers.

“If the two Koreas achieve reunification one day, I want to introduce North Korea to the culture of flowers, like going to flower festivals during springtime and giving bouquets as gifts to lovers and family members, not just to the Kim family,” she said.

These fledgling entrepreneurs give us a taste of reunification, Hwang said. North Koreans living in South Korea, who have experienced life on both sides of the border, could become mediators and help minimize trial and error if real reunification takes place, he added. Once the two sides are unified, they are the ones who will be able to come up with optimized business ideas.

“There are no better practical grounds to prepare for reunification than building a business together. Cooperating with established companies here would greatly empower North Korean entrepreneurs,” Hwang said.

By Park Han-na (hnpark@heraldcorp.com) and Park Ga-young(gypark@heraldcorp.com)
MOST POPULAR
LATEST NEWS
헤럴드 에듀