Competitiveness

 Among the many global shopping markets, Dongdaemun market is a unique mall where a lot of small-scale wholesalers maintain sustainable management in a state of perfect competition. At first glance, we cannot believe that the small size wholesalers will be able to survive in such a perfectly competitive market.

 In fact, just as to live is to fight, trading in the market is fighting. In other words, commerce itself is an economic behavior that fights like a war. Right or not, it is a fact.

For that reason, everyone may think that a big company with economies of scale, such as monopoly or oligopoly, has great market power in the situation. However, that’s not true. Or rather, in a perfectly competitive market, small size wholesalers can have higher market competitiveness in the long run and sustained business performance.

In such a marketplace, there is the golden rule of Adam Smith’s laissez-faire economy, and it is also the land of dreams for the happiness and peace of all. Many economists explained this in their books and university lectures. +

“An allocation of resources generated under perfect competition is generated by the pursuit of individual self-interest and one which is insensitive to the actions of any single agent.”

“Self-interest is formalized as maximization of profits by producers and maximization of utility by consumers, both sets of actions being taken at a price system which cannot be manipulated by any single agent, producer or consumer.”

Dongdaemun market is quite crowded with domestic and foreign buyers who visit many wholesaling stores every night. In such a crowded market situation, it seems that bees and butterflies playing among the flowers in a bright sunny day. Analogically, innumerable wholesale shops in the market are flowers, whereas bees and butterflies are like domestic and foreign buyers looking for a variety of fashion products in the market.

Just as flowers grow and bloom in spring and summer, 30,000 wholesalers are freely conducting commerce without barriers to entry in Dongdaemun market, where there is overheated competition.

These conditions of a perfectly competitive market are almost the same on the supply side. 




 

-Some of the popular Dongdaemun fashion items we exported last week, seoulclick.com- 



There are 100,000 designers in Dongdaemun market, who are either wholesale store owners, employees of the store, or freelancers. So many of those Dongdaemun designers compete with each other for more salary or revenue through their better fashion designing work.

On the other hand, more than 15,000 sewing factories in Gangbuk, Seoul are also continuing to supply better quality fashion products at a lower price through improved technology and labor productivity and low-cost management in the competitive Dongdaemun market.

In addition, as another supply partner, numerous non-store fashion product producers are supplying trendy fashion products in a better commerce environment in the competitive Dongdaemun market, and street vendors around shopping malls are also directly wholesaling. There are no high and rough barriers to free market entry in the marketplace. 

As such, Dongdaemun market is completely competitive in all directions, including supply or demand side, and the marketplace.

“Monopoly and oligopoly are poison, but competition is medicine.”

Recently, many global fast fashion companies have faced a severe business crisis, regardless of the COVID-19 Pandemic. The management crisis of these companies is, above all, in maintaining low-wage management for competitiveness with low pricing as well as lazy management as a side effect of market oligopoly.

Unlike them, Dongdaemun merchants and their partners are doing business in the midst of competition, just like soldiers out on the battlefield. They may be saying, implicitly, “To be, or not to be, and that’s the problem.”

From first to last, therefore, they continue to trade innovatively, thinking about how to achieve a competitive advantage. Obviously, they are now taking good medicine for the prevention and treatment of any disease that might come.

Dongdaemun merchants are always awake with medicines that are good for the body, although it tastes bitter. They never forget the strict rules of safety that are expected when awake in competition.

+ John Eatwell, and Others, The New Palgrave A Dictionary of Economics, Vol. 3, The Macmillan Press, Ltd., 1987, p. 831. 

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Bong Sul (Advisor, SeoulClick)

www.seoulclick.com


Read more: Bong (Bong Sik) Sul, Dongdaemun Style, ebook.kstudy.com, Seoul, 2019.

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