'300 vs 0'... Global Companies Leaving Russia... Samsung Electronics and Hyundai Motor Show 'Quiet Movement' (Comprehensive)

300 Global Companies Leave Russia... 0 Korean Companies
Worried About Global Boycott Movement
Experts Say "Simple Withdrawal Is Not the Answer"... Need for Countermeasures

[Image source=Yonhap News]

'300 vs 0'.

This is the number of global companies and Korean companies that decided to withdraw from the Russian market after Russia's full-scale invasion of Ukraine. While global companies are withdrawing one after another in line with Western sanctions, Korean companies are clearly showing that they are unable to hastily decide to withdraw due to various conditions such as local factories and market share.

Major global companies such as Apple, Intel, and Tesla are continuing the 'de-Russia' trend, deepening the concerns of domestic companies like Samsung Electronics and Hyundai Motor. On one hand, declaring withdrawal as a boycott against Russia means losing the market they have painstakingly built, which is regrettable; on the other hand, staying risks being caught up in global boycotts and other issues. From the perspective of Korean companies, it is said that they are in a 'dilemma'.

Experts emphasize the need for companies to prepare countermeasures for the new international order. This is because the so-called global society's 'pressure to withdraw and supply chain crisis' caused by Russia's invasion of Ukraine could recur at any time. Especially considering the unique vulnerability of the Korean economy to external uncertainties, this case should be taken as a lesson.

◆300 vs 0... Korean companies unable to leave Russia= According to business circles and major foreign media on the 16th, about 300 multinational companies have withdrawn from the Russian market since Russia's invasion of Ukraine. From Apple, which holds a 15% share of the Russian smartphone market, to other global companies such as Google, GM, Intel, and Toyota, they have joined the 'de-Russia' front one after another.

In particular, as the war prolongs, global companies that had declared staying in the Russian market are also announcing withdrawals one after another. Uniqlo, Starbucks, and Coca-Cola are representative examples. At the beginning of the war, they emphasized that their businesses were essential daily necessities and expressed no intention to withdraw. However, as backlash centered on the West intensified, along with criticism that it would cause damage to their other regional businesses and reputations, they ultimately chose to withdraw.

On the other hand, among Korean companies, not a single one has declared withdrawal from Russia yet. This is because they have spent decades striving to penetrate the Russian market since the collapse of the Soviet Union. Especially since they have successfully established themselves in the market, hastily deciding to withdraw is practically difficult. Samsung Electronics and LG Electronics hold the number one position in major home appliance sectors such as washing machines and refrigerators in Russia. Samsung Electronics’ smartphone market share is 30%, twice that of Apple.

Therefore, it is reported that Samsung Electronics did not accept the direct request from Ukrainian Deputy Prime Minister Mykhailo Fedorov to stop product sales. However, Samsung Electronics has currently suspended shipments of export goods to Russia due to disruptions in maritime logistics. The situation is similar for other major domestic companies such as Hyundai Motor and LG Electronics. It is also reported that they are not considering banning sales or withdrawing business as part of global companies’ pressure on Russia.

Unlike Apple and other global companies, domestic major companies have many factories locally, which is also analyzed as a cause. Since the factories, which required considerable investment, have a significant employment effect locally, deciding to withdraw carries a heavy burden of potentially being accused of 'offense' by Russian authorities, unlike other global companies. A business circle official said, "It is unreasonable to withdraw just because other global companies have withdrawn," adding, "Since it could cause significant damage, this matter should be examined and decided more carefully."

◆"Simple withdrawal is not the solution... supplementary measures needed"= Experts also pointed out that domestic companies do not need to join the global companies’ 'de-Russia' movement following Russia's invasion of Ukraine. However, they said fundamental supplementary measures are necessary for the vulnerabilities revealed in our industrial sector by this incident. Since similar incidents could happen to our industry at any time, thorough preparation is required.

The impact on our industry caused by Russia's invasion of Ukraine is considerable. Representative issues include pressure for major companies to withdraw and supply chain problems for key raw materials such as naphtha and neon, which were dependent on Russia and Ukraine respectively. In particular, some companies are reported to be in a more severe situation due to Western remittance sanctions against Russia, making payment impossible.

Professor Jeong In-gyo of Inha University’s Department of International Trade said, "The Ukraine crisis is in the same context as the 'supply chain risk' that emerged from the past US-China conflict," adding, "Recognizing that supply chains are linked to security and coming up with proper alternatives will be the fundamental solution."

An official from an economic organization also said, "Even if the Ukraine crisis occurs, immediate withdrawal from the Chinese or Russian markets does not seem desirable," adding, "It is time for the government to think and discuss comprehensively and long-term, with the idea that the economy is security."

An industry insider said, "I think withdrawal is not the best solution," adding, "However, in the case of the Chinese and Russian markets, business plans should be sought in ways that manage risks."

There was also a suggestion that markets like Russia and China, which frequently clash with the West, should be distinguished from the global market. The risk of problems starting in a part and spreading to the whole should not be taken. Professor Kim Pil-su of Daelim University’s Department of Automotive Engineering said, "It would be better to see Russia and China as separate markets rather than part of the global market," adding, "Since there are variables that could cause problems with the West at any time, more strategic countermeasures should be prepared."

This content was produced with the assistance of AI translation services.