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Weathering 3 decades as Korea s tutoring king

Summary: The faces inside KOREA S CONGLOMERATES The Noonnoppi brand started out of necessity when the government banned private tutoring in 1980 In Korea education is everything Often the name on your college diploma may determine your life path for decades to come So parents push their children from a very young age to excel in every subject and ace every standardized test And they send their kids to hagwon private educational institutes to cram Daekyo Group is considered one of the earliest entrants to Korea s 30 trillion won $26 5 billion private education market Its founder and chairman Kang Young joong is credited with creating Korea s first tutoring services network for young children that includes house calls and is consistently ranked one of the country richest businessmen In fact Kang s personal fortune in stock holdings reaching 728 billion won the nation s 16th highest as of 2009 according to Forbes Korea In its signature Noonnoppi service a tutor drops by the student s home every week checks the student s progress by examining his or her study materials answers their questions and gives out another study packet for the following week This business model a smash hit among local parents of elementary school students throughout the 1980s and 1990s helped Kang build an education empire that now has seven subsidiaries six sub subsidiaries and seven overseas units in countries including China the United States Indonesia and Malaysia The group s total assets are estimated to be about 1 8 trillion won while its listed flagship unit Daekyo Company boasted total assets of 808 7 billion won at the end of 2009 The group s total sales for 2009 also exceeded 1 trillion won The Noonnoppi service is the largest player in Korea s 4 6 trillion won market for weekly home tutoring The Daekyo franchise s history is inseparable from two other tales that of Kang s personal rise and that of the ups and downs of the nation s education policies dating back to 1976 As a 25 year old college graduate Kang saw his father die and suddenly had to become the breadwinner for his family So he turned toward one of the most lucrative professions available for college students back then private tutoring for teenagers Kang opened a small shop in central Seoul where he taught math science English and anything that would help his three pupils fare well on the college entrance exam As his business grew Kang introduced a Korean version of the Kumon method a math and reading enrichment program originating in Japan Collaborating with the Japanese company Kang began to use the techniques developed by the Japanese educator Toru Kumon in which students are allowed to learn at their own speed with their progress measured by periodical testing The experiment was met with a passionate response from local parents in wealthy Seoul neighborhoods with the number of clients reaching more than 4 000 in 1979 Business was good until 1980 when the military controlled government suddenly banned precollege students from taking any private lessons from individual tutors or at hagwon Kang s business hit a brick wall But he came up with a new idea to get around the rules mailing study materials to students for them to look at themselves for a week then sending an instructor from the company to the students homes to look over the results and check their progress This approach which put more emphasis on the study materials than on the individual teacher was radically different from the previous system in which a private tutor usually a college student or a young college graduate would sit with a group of several students for several hours a few times a week and teach them Parents desperate for any kind of study enhancement programs on top of the public schools instantly took the plunge And the service which largely targeted elementary school students and turned out to be cheaper than hiring individual tutors also met with praise from parents who could not afford expensive college student tutors What started as a small mail order distribution network developed into the official Daekyo corporate franchise in 1986 and the number of subscribers for Kang s weekly math study packet and home visit tutor service increased to more than 100 000 by the following year The company cut off its licensing relationship with the Japanese Kumon brand in 1991 and started promoting its own Noonnoppi brand which had practically the same features The number of subscribers kept rising to one million in 1993 and two million in 1999 Today the company estimates more than 10 million people have been taught through the program over the past three decades particularly impressive in a country with a population of 48 million The subjects offered have also expanded from math only to English Korean science social sciences and even Japanese and Chinese Intensifying competition has stymied further growth and the number of Noonnoppi subscribers seems to have stabilized at around two million But the company has steadily ratcheted up efforts to diversify its business portfolio from Noonnoppi which caters to kindergarten and elementary school kids to a similar service for middle school students as well as into children s book publishing construction purified water sales and business consulting for private educators Three years after the company adopted a holding group structure in 2001 the group s flagship unit Daekyo Co went public on Seoul s main stock market At the same time the company has started tapping into overseas education markets in China Indonesia Malaysia and the United States A quick glance at the company s top executive roster shows a mix of longtime Daekyo loyalists and others brought in from outside recently to cement the group s sprawling business portfolio Kang inarguably still towers over the Daekyo Group which he heads along with its holdings company in which he has a 79 9 percent stake Kang is also a well known badminton fan serving as the chairman of the Badminton World Federation The group s flagship unit Daekyo Co is led by two CEOs Park Tae young and Park Myung kyu Both have spent decades at the Daekyo franchise and Park Myung kyu responsible for the Noonnoppi brand has been deeply involved in developing new education programs and products while Park Tae young in charge of developing new business strategies has spearheaded marketing efforts and overseas businesses for years Yoon Jong cheon CEO of Daekyo D S a builder and real estate developer has also spent more than a decade at the firm Chung Yoon hee CEO of Gangwon Deep Sea Water is a veteran in international trading who once worked for Hyundai Heavy Industries and Samsung Electronics from the 1970s to the early 90s before joining Daekyo in 1995 He is now spearheading Daekyo s hunt for new sources of growth the exploration for deep sea water in the East Sea which the company plans to sell for a wide variety of uses including as drinking water and for use in food cosmetics liquors and medical products Oh Suk joo CEO of Daekyo CNS an Internet system solutions and software developer moved to the Daekyo group in January this year after serving as the chief executive at AhnLab Korea s largest computer security firm Shin Jeong ho CEO of Daekyo Publishing is responsible for the group s burgeoning children s book publishing business By Jung Ha won hawon joongang co kr Copyrights ⓒ JoongangIlbo Joins com All rights reserved The faces inside KOREA S CONGLOMERATES The Noonnoppi brand started out of necessity when the government banned private tutoring in 1980 In Korea education is everything Often the name on your college diploma may determine your life path for decades to come So parents push their children from a very young age to excel in every subject and ace every standardized test And they send their kids to hagwon private educational institutes to cram Daekyo Group is considered one of the earliest entrants to Korea s 30 trillion won $26 5 billion private education market Its founder and chairman Kang Young joong is credited with creating Korea s first tutoring services network for young children that includes house calls and is consistently ranked one of the country richest businessmen In fact Kang s personal fortune in stock holdings reaching 728 billion won the nation s 16th highest as of 2009 according to Forbes Korea In its signature Noonnoppi service a tutor drops by the student s home every week checks the student s progress by examining his or her study materials answers their questions and gives out another study packet for the following week This business model a smash hit among local parents of elementary school students throughout the 1980s and 1990s helped Kang build an education empire that now has seven subsidiaries six sub subsidiaries and seven overseas units in countries including China the United States Indonesia and Malaysia The group s total assets are estimated to be about 1 8 trillion won while its listed flagship unit Daekyo Company boasted total assets of 808 7 billion won at the end of 2009 The group s total sales for 2009 also exceeded 1 trillion won The Noonnoppi service is the largest player in Korea s 4 6 trillion won market for weekly home tutoring The Daekyo franchise s history is inseparable from two other tales that of Kang s personal rise and that of the ups and downs of the nation s education policies dating back to 1976 As a 25 year old college graduate Kang saw his father die and suddenly had to become the breadwinner for his family So he turned toward one of the most lucrative professions available for college students back then private tutoring for teenagers Kang opened a small shop in central Seoul where he taught math science English and anything that would help his three pupils fare well on the college entrance exam As his business grew Kang introduced a Korean version of the Kumon method a math and reading enrichment program originating in Japan Collaborating with the Japanese company Kang began to use the techniques developed by the Japanese educator Toru Kumon in which students are allowed to learn at their own speed with their progress measured by periodical testing The experiment was met with a passionate response from local parents in wealthy Seoul neighborhoods with the number of clients reaching more than 4 000 in 1979 Business was good until 1980 when the military controlled government suddenly banned precollege students from taking any private lessons from individual tutors or at hagwon Kang s business hit a brick wall But he came up with a new idea to get around the rules mailing study materials to students for them to look at themselves for a week then sending an instructor from the company to the students homes to look over the results and check their progress This approach which put more emphasis on the study materials than on the individual teacher was radically different from the previous system in which a private tutor usually a college student or a young college graduate would sit with a group of several students for several hours a few times a week and teach them Parents desperate for any kind of study enhancement programs on top of the public schools instantly took the plunge And the service which largely targeted elementary school students and turned out to be cheaper than hiring individual tutors also met with praise from parents who could not afford expensive college student tutors What started as a small mail order distribution network developed into the official Daekyo corporate franchise in 1986 and the number of subscribers for Kang s weekly math study packet and home visit tutor service increased to more than 100 000 by the following year The company cut off its licensing relationship with the Japanese Kumon brand in 1991 and started promoting its own Noonnoppi brand which had practically the same features The number of subscribers kept rising to one million in 1993 and two million in 1999 Today the company estimates more than 10 million people have been taught through the program over the past three decades particularly impressive in a country with a population of 48 million The subjects offered have also expanded from math only to English Korean science social sciences and even Japanese and Chinese Intensifying competition has stymied further growth and the number of Noonnoppi subscribers seems to have stabilized at around two million But the company has steadily ratcheted up efforts to diversify its business portfolio from Noonnoppi which caters to kindergarten and elementary school kids to a similar service for middle school students as well as into children s book publishing construction purified water sales and business consulting for private educators Three years after the company adopted a holding group structure in 2001 the group s flagship unit Daekyo Co went public on Seoul s main stock market At the same time the company has started tapping into overseas education markets in China Indonesia Malaysia and the United States A quick glance at the company s top executive roster shows a mix of longtime Daekyo loyalists and others brought in from outside recently to cement the group s sprawling business portfolio Kang inarguably still towers over the Daekyo Group which he heads along with its holdings company in which he has a 79 9 percent stake Kang is also a well known badminton fan serving as the chairman of the Badminton World Federation The group s flagship unit Daekyo Co is led by two CEOs Park Tae young and Park Myung kyu Both have spent decades at the Daekyo franchise and Park Myung kyu responsible for the Noonnoppi brand has been deeply involved in developing new education programs and products while Park Tae young in charge of developing new business strategies has spearheaded marketing efforts and overseas businesses for years Yoon Jong cheon CEO of Daekyo D S a builder and real estate developer has also spent more than a decade at the firm Chung Yoon hee CEO of Gangwon Deep Sea Water is a veteran in international trading who once worked for Hyundai Heavy Industries and Samsung Electronics from the 1970s to the early 90s before joining Daekyo in 1995 He is now spearheading Daekyo s hunt for new sources of growth the exploration for deep sea water in the East Sea which the company plans to sell for a wide variety of uses including as drinking water and for use in food cosmetics liquors and medical products Oh Suk joo CEO of Daekyo CNS an Internet system solutions and software developer moved to the Daekyo group in January this year after serving as the chief executive at AhnLab Korea s largest computer security firm Shin Jeong ho CEO of Daekyo Publishing is responsible for the group s burgeoning children s book publishing business By Jung Ha won hawon joongang co kr Copyrights ⓒ JoongangIlbo Joins com All rights reserved

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