Starting Business in S. Korea Means Long Days, Red Tape : Commerce: Fast-food purveyor Jay Tunney overcame obstinate bureaucrats and anti-import feelings.
Jay Tunney was 50 when he quit his job, raised $40,000 and moved halfway across the world to challenge new frontiers in a business he knew nothing about.
He traded in his comfortable life to realize a dream. What followed is a story of an American entrepreneur who went to the brink of failure before registering success in the notoriously difficult South Korean market.
It all started in New York back in 1986. Tunney was fed up with his job in shipping, an industry mired in the deepest recession since World War II.
Then one day a Hong Kong friend, impressed by the success of Hobson’s Ice Cream in Japan, told Tunney that he had acquired the franchise for the rest of Asia.
He offered to sell the rights for a yet-to-be developed market--South Korea, host to the approaching Olympic Games but notorious for violent student riots.
Tunney knew it would be tough, but he kept hold of a vision that one day a consumer revolution would engulf South Korea, as it had Japan.
It was just as well he had no idea how bad it could be.
What followed was a red tape nightmare, a marathon of 15-hour work days, of butting heads with bureaucracy and of frantic efforts to control spiraling costs.
About a month before the doors of his first ice cream parlor were to open, a second-tier bureaucrat decreed that Tunney was in South Korea illegally and ordered him out.
No matter that the Ministry of Finance had given the go-ahead. His lawyers argued his case in vain.
Barely a day away from packing his bags and buying a one-way ticket back to New York, Tunney tried one last-gasp effort.
He contacted the one political friend he knew here, who by fluke knew the bureaucrat involved and prevailed on him to reverse his decision. Tunney was permitted to stay.
That was the first of a series of lessons that helped Tunney succeed in South Korea.
Lesson 1: Cultivate personal friendships with government officials.
Looking back, Tunney believes that the civil servant in question was sympathizing with angry dairy farmers who were campaigning against American imports and U.S. pressure on South Korea to open its agricultural markets.
The anti-import sentiment continued to dog Tunney. Many South Koreans regard imports as unpatriotic and damaging to the economy. The hurdles that customs and other government officials devise can be formidable.
Tunney got around this by manufacturing his ice cream in South Korea. “The milk is getting better,” he said. “The ice cream is perhaps 90% to 95% as good as the original.”
On July 29, 1988, the great day came. He threw open the doors of his flagship ice cream parlor in Seoul’s Itaewon district, where American GIs and South Korean bar girls carouse in the shadow of the main U.S. Army base.
But Tunney suffered bouts of vandalism--part of an outpouring of anti-American and anti-import sentiment. His patio furniture was broken, and windows were smeared with dirt.
Then came the winter of 1988, a particularly harsh one. His few customers vanished. Orders from luxury hotels kept the business going, but eventually he closed his shop.
Lesson 2: Western tastes may have caught on in Japan, but South Korea is light-years behind.
So Tunney set about “Koreanizing” his product. As a sole proprietor, he had no head office to placate.
He rejected the first idea, kimchi ice cream.
True, no meal in Korea is complete without kimchi, an eye-watering, throat-searing concoction that at its most basic consists of pickled cabbage and red pepper fermented with fish paste. “But kimchi ice cream was going a bit far,” he said.
In early 1990, an American friend introduced Tunney to “Jo Ajoessi”--Uncle Joe. His burgers had attracted a cult following among American expatriates in Seoul.
This was the opening Tunney was looking for. Koreans, he had observed, rarely went out for dessert alone. They wanted to eat an entire meal.
He bought out Uncle Joe, who promptly emigrated to Canada.
Then, in what turned out to be an inspired idea, Tunney came up with the kimchiburger.
“It has been a true success,” he said. Spurred on by the kimchiburger and later the kimchi-hotdog, “Jo Ajoessi Haembogo” concessions have opened at the rate of two a month in the past 2 1/2 years.
“Every day still remains a battle, but it is getting easier,” Tunney said. “The struggle with bureaucracy is like trench warfare. You proceed an inch at a time.”
His plans to offer New York cheesecake ice cream have been put on hold because he cannot import the flavoring. Customs classified it as a foodstuff and refused to let it in.
Last month, Tunney celebrated the opening of his 50th store, in Inchon, a west coast port city.
And yes, at last, South Koreans are beginning to develop a taste for his ice cream as well as his kimchiburgers.
