1998 was a nightmare but the worst is over.
Few economic analysts could give a correct explanation for what happened to the Korean economy last year, a dramatic turnaround in the last quarter of the year from a near-crash in the first half of 1998. The mood in Korea these days is definitely buoyant. For the Korean economy, the worst seems to be over with many signs of turnaround. Key indicators
show the economy bottomed out in October last year:
The Korean won has regained strength against the U.S. dollars, closing at a 12-month high of 1,170 won on February 3, a dramatic turnaround from levels close to 2,000 about a year ago. The won now seems to be stabilizing around 1,200, still roughly 300 won weaker than the won in the fall 1997 right before the collapse of the economy.
Interest rates, once topping 30%, now hover around 8%, which is lower than that before Korea went under the IMF bailout program in November 1997.
The trade surplus last year hit a record $39.9 billion from a record low of minus $8.45 billion a year before. The country's foreign currency reserves rose to a record $53.6 billion from only $20.4 billion a year earlier.
The strong won and low interest rates have prompted a surge in foreign-investment, which in turn has helped local share prices almost double in the past four months. Helped by foreigner's active buying, the Seoul stock index rose back to as high as 652 last January this year.
The economy is clearly on the mend, much sooner than anyone expected. Many government and private economists expect a return to economic growth this year of 2% to 3% after a contraction of as much as 6% last year.
Notwithstanding all this good news, there are many factors yet that hinder the recovery. Chief among them: the increasing jobless rate, which rose to as high as 8.5%, almost doubled in the past one year. It may still increase as the restructuring at the major conglomerates speeds up, igniting Korea's belligerent labor unions.
Even the record trade surplus reflects weakness of Korea's economic situation. It grew as imports slowed, dropped faster than exports. So the repairs are fragile and the economy still needs plenty of structural renovations to improve productivity and raise the global competitiveness of its wounded industries. The Korean economy is still vulnerable to external factors such as how well U.S. economy performs and how much the Japanese yen or Chinese yuan will weaken.
I would say it is still too early for champagne parties. And consumers remain cautious and thrifty.
Publishers are Back to Life
The book market in Korea was severely damaged by the economic crisis. Early last year, three leading book wholesalers went bankrupt, causing a panic among publishers. Book distribution was nearly suspended for a couple months until 25 billion won out of the total of 50 billion won emergency fund earmarked by the government was released to help restore the distribution system as well as feed cash-hungry publishers.
During the latter half of last year, however, two out of the three major distributors which had been declared insolvent managed to resume operation while the largest one still remained closed. A new distributor, Korea Publication Distribution Company,. Ltd., was established a year ago with publishers and some bookstore owners as shareholders.
It began actively to fill the gap caused by the largest distributor, which still remains closed. Thanks to the mending of the distribution system and helped by hopeful economic news, book publishing also has come back to life.
According to the statistics released by Korean Publishers Association, the number of titles published in 1998 exceeded that of 1997 by 10%. However, if the comic titles are excluded, which showed remarkable increase of as much as 29%, the rate of increase shrinks to 5.6%.
This looks rather unbelievable but although the number of titles published increased, the number of copies printed decreased by 10.3%. Again with the comic titles excluded, the rate of decrease is raised up to 16.5%.
This means more titles were published but less copies, suggesting lack of publishers' confidence in the market. The publication of comic books, mostly translations of Japanese comic books which sell relatively cheaply, increased remarkably last year. The number of titles was up 29% and 39.9% in copies.
Children's books, which sell for prices two to three times higher than comic books, decreased drastically, down 10.5% in titles and 35.9% in copies.
The total number of comic books published was 35.2% of the total titles published. Apparently many publishers turned to publishing comic books. Being uncertain about the market, which was hard to read in the time of unprecedented financial turmoil, publishers were reluctant to publish a book which requires too much initial investment. At the same time, they are printing smaller number of copies for the first print run in order to sound out the market's reception.
Although more titles were published, sales as a whole were disappointingly sluggish. During the peak of the crisis, book sales plunged drastically by more than 70% although sales nowadays are estimated to have bounced back to roughly 50% of what used to sell before the crisis.
Just for your reference, let me cite you what actually happened at our agency. From January through November 1997, our sales were more or less constant as usual. In December, however, sales nosedived to minus 70% of the average monthly sale for the previous 11 months. Next month in January 1998, it fell further to minus 84%. The average monthly sale from February through July rebounded to minus 52% and further the monthly average from August through the end of the year improved to minus 40%. Then came a real bounce back. The average monthly sale for January and February this year has gone up to minus 12% as compared to the pre-crisis average monthly sales in 1997. This is certainly a good sign and we hope this upsurge will last for the rest of the year.
Non-Fiction Preferred to Fiction
|What books sold well or didn't during 1998? Among the top 50 bestsellers for 1998, the following 10 translated titles were ranked as follows:|
As evident with these titles, books on self-help, meditation or encouragment to the heart of people in the hard time were most widely read. Fiction did not fare well: among the 50 bestsellers are only 13 were fiction, including four translations.
|Looking at a more recent bestseller list, the following translations were ranked in the 20 bestsellers for the month of December 1998 as follows:|
Here again non-fiction is dominant with only one fiction title at the bottom. In translation, fiction continues to fare badly. In fact, sales of translated fiction are almost dead while fiction by Korean authors dominate. Korean fiction books are smaller and less expensive to publish. Besides, the authors are well known, having many loyal followers. Even fiction by American blockbuster authors just did not sell. More publishers are turning away from so-called foreign bestseller novels.
On the other hand, non-fiction books sold relatively well, particularly books on self-improvement: spirituality, meditation, and healing. Practical books on professional life, personal finance and stock investing are also widely read.
Book Sales are Still Sluggish
The number of copies sold per title nowadays, however, is much smaller even for these books ranked in the bestseller lists. Tuesdays with Morrie sold less than 100,000 copies. The average number of copies printed per title (with exception of mass-printed books such as comic books, school workbooks and social sciences, which include all the school textbooks) decreased to 2,238 copies in 1998 from 2,805 a year earlier, a 20.2% decrease.
|The most severely affected subjects in numbers of printed copies were:|
| Philosophy ||37.1% down to 2,312 copies|
| Art ||29.2% down to 1,681 copies|
| Children ||24.8% down to 2,717 copies|
| *Literature |
(*Nearly 60% was fiction)
|20.0% down to 2,453 copies|
|On the other hand, least affected by the crisis were:|
| History ||5.5% down to 1,848 copies|
| Religion ||7.9% down to 2,590 copies|
| *Technology |
(*Computer books included)
|11.4% down to 1,233 copies|
Another notable change was the "localization" of successful authorship. Almost all fiction titles ranked in recent bestseller lists are by leading Korean authors. Even bestseller computer books for beginners are by Korean authors.
Koreans nowadays seem to be more interested in books dealing with matters closely and immediately related to their personal lives. Fewer readers or publishers are interested in the heavy reading that literary fiction can be. Nor is fiction full of violence well-received. Publishers are also much less interested in big, long books or expensively produced books. These are regarded as too risky and hence it has become harder for us to sell them. What a pity!
Helped by an explosive increase in comic books, mostly translated versions of Japanese comics, Japan has kept the top place for the second consecutive years in the export of translation rights with an increase by 2.8% to 43% of the total export over 1997.
The U.S. remained second with 26%, down 5.4%, followed by the U.K. and France, each with 6%.
The total number of exported rights were 6,129 titles in 1997 and 6,633 titles in 1998.
We are very happy to tell you that in the past three months since December, 1998, our sales have shown a remarkable increase nearly to the levels of the pre-crisis days. If we take into consideration the extraordinary emergency of last August, when we had to suddenly close DRT International and found KCC, then attending Frankfurt and moving our offices in October, during which we were unable to exert ourselves fully in selling, this is quiet an encouraging sign.
It was very gratifying that the rebirth of our agency in an independent KCC was met with such a warm and understanding welcome from our clients at home and abroad. I would like to thank everyone on behalf of all our hard working staff.