"Entering China and Vietnam, Partner with Party Officials' Children" Startup Expert's Bold Advice

Sim Jun-won, CEO of Petpins, Offers Advice for Startups
"Limitations of Textbook Mentoring and Government Programs"
"Patent Rights Are Useless... Business Will Be Copied by Locals"
"Joint Venture with High-Ranking Party Officials' Children and Share Allocation Needed"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] "There is Mr. A who taught Korean to the daughter of a high-ranking party official in Vietnam and later became his son-in-law. Many people want to meet Mr. A. According to a lawyer representing him, who is a high school classmate of Mr. A, the high-ranking party official said, 'Please bring a business model worth more than 100 billion won, not a small business.'

Shim Jun-won, CEO of Petpins, distributed an article titled 'A Small Suggestion for Startups Considering Expansion into China or Vietnam' to reporters on the 22nd.

He founded Petpins, a pet lifestyle finance platform operator, in 2019 and currently serves as the head of the Pet Insurance Research Institute. Last year, he received the Venture Business Association President's Award in the startup activation category at the 'Night of Venture Entrepreneurs' event. Before starting his own business, he worked as an insurance expert for 18 years at a large corporation.

He said he wrote the article containing his know-how because he felt that mentoring content related to expansion into China and Vietnam for domestic startups was somewhat textbook-like. It was based on his actual experiences traveling between China and Vietnam to help a friend's business. He said, "The Chinese market with a population of 1.4 billion and the Vietnamese market with nearly 100 million people, more than half of whom are under 30, are attractive," but added, "The target of the business should be 'locals,' not 'local expatriates.'"

First, he explained that in communist countries like China and Vietnam, the 'Guanxi culture,' which values personal connections, is deeply rooted in society. Second, he emphasized the importance of rapid market capture. He said, "If you only follow government programs and use textbook methods from the start, there may be limits to business expansion," and warned, "You might get exhausted during the process, or if the business is really good, it will be copied by locals."

[Image source=Yonhap News]

He said, "Everyone has probably heard at least once how useless patent rights are in communist countries," and shared, "A company CEO had to shut down his business after running around for three years in patent lawsuits upon discovering that his product was copied in China."

Shim believes that even with patent rights, the chances of winning disputes against local companies are slim. He said, "Because culture, sentiment, and legal systems are different from ours, it is nearly impossible for startups to cope with what even large corporations find challenging."

He said securing networks is essential for quickly dominating the local market. Offering somewhat radical advice, he said, "You need to establish a joint venture with the children of high-ranking party officials or government officers through your network and give them more than 50% of the shares." He explained, "By doing this, they will actively use their guanxi as their own company to grow the business," and added, "They should be in charge of overall management, while our company provides technology and handles quality control."

As a result, it is possible to be somewhat free from local legal risks and conduct marketing. Shim said, "Whether you want 100% of a 1 billion won company or 10% of a 1 trillion won company is up to your choice."

Finally, he said, "I hope you do not experience having your business copied and forced to withdraw just when you are exhausted in time, cost, and spirit by stubbornly sticking to textbook methods despite having good technology."

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