Earlier this year, the international community implemented sanctions against North Korea in response to its fifth nuclear test and long-range missile launches. With sanctions prohibiting the export of minerals such as coal as well as various external revenue streams, negative prospects are expected for North Korea’s domestic economy.
Meanwhile, North Korean leader Kim Jong Un has sought to turn the country’s focus toward political achievements. The regime has escalated propaganda emphasizing self-reliance to overcome sanctions, organizing mobilization efforts including the 70-Day Battle and the 200-Day Battle. However, such efforts have not been complemented with measures to ensure stability of the markets.
As a result, residents in North Korea have begun to abandon their expectations for the regime and are instead pioneering new business domains within the markets themselves. Daily NK’s sources have recently pointed out that residents often comment that Kim Jong Un is a “cunning merchant” among themselves, which is really a sign of the times. People’s livelihoods are not dependent on state policies anymore but on the market. Those who rely on the state for rations are now considered as misguided and most realize that they can only rely on themselves to improve their own lives.
Consequently, a major interest now lies in entrepreneurship in the market. Despite the frequent state mobilizations and continuing sanctions, market know-how is being steadily accumulated with the emergence of new occupations and products in a competitive environment.
Multiple sources have noted that North Korea’s transformation into a fully-fledged market economy is inevitable. Regardless of the intentions of the regime, capitalism has grown organically and its merits are becoming appreciated by the people. Common perceptions include the idea that ‘a new version of a product will emerge if the current ones disappear,’ indicating confidence that if a certain product disappears from the marketplace due to international sanctions or internal regulations, another type of product will emerge to fill the gap. Daily NK has profiled 10 market concepts, consisting of services and products that appear to have increased in popularity in 2016, and will introduce them in a series of three articles.
① Food stalls, shoes and zipper repairs considered relatively safe from government control and external sanctions
Food stalls as a business in North Korea are regarded as stable. Even when the authorities clamp down on the general markets, business at food stalls remains robust. The reason for the stability of the food business is that it is considered a ‘low-grade business’ compared to other enterprises, and also because the associated bribery isn’t as pervasive. Even in cases where vendors sell food alone in their own private houses, steady income can be expected if the venue becomes a local favorite amongst officials.
Recently, shoe and zipper repairs have become popular as profitable businesses. In particular, shoe repair is a type of business that is well suited to the circumstances of North Korea, as people tend to purchase their shoes at the market rather than from state-owned stores – the large majority of which are domestically produced. However, because home-made shoes are often not properly heat-treated, repairs are frequently needed.
“Sometimes, the soles of sneakers purchased at the market fall off the next day, and the heels of leather shoes fall off after a week. For people who live from hand to mouth, purchasing new shoes is not an option, so the shoe repair business is thriving,” a Daily NK source in South Pyongan Province explained.
A recent trend has been for consumers to entrust their shoes to a repair shop immediately after purchasing them at the market. The newly-purchased shoes are then given new soles and are double-padded with a stitched perimeter. As a result, the shoe repair business, which was once considered to be a lowly occupation, is now emerging as a competitive field and a thriving industry.
The source explained that working class females who participate in ceremonies during the national holidays often evaluate each other’s financial status according to how expensive their dresses are (invariably hanbok; a Korean traditional garment known as chosun ot in North Korea). Recently, people have been surprised that the wives of shoe repairmen are often wearing expensive upper garments (jeogori) on par with the wives of donjuLiterally "masters of money," donju refers to people who hav... More (newly affluent middle class),” she added.
“These days, people also tend to prefer clothes with zippers instead of buttons, but zippers made in China often malfunction about a month after purchase. So the zipper repair business has become lucrative despite the small profit margins, as there’s a huge demand for these sorts of repairs. Furthermore, it has established itself as a safe business as it’s not the focus of crackdowns and controls because it doesn’t attract much attention.”
② Childcare becoming popular among seniors
The market economy is also changing family values in North Korea. The Confucianist culture that emphasizes the virtue of honoring one’s parents is in slow decline, while it is now commonly accepted that seniors should be able to support themselves to be respected by their children. The cultural conflict between the old socialist generation and the new generation of the market economy is producing a number of societal problems.
State-run nursing homes are known to be little more than propaganda showpieces, and elderly citizens are acutely aware of the market economy and that ‘self-reliance is the only way to keep living.’ In reflection of this trend, elderly women are now seeking work as babysitters, a newly emerging occupation as young women actively engage in market activities during the day.
The daily fees for babysitting are dependent on circumstances and the age of the child. Even grandmothers who take care of their grandchildren can reasonably expect to receive money from the parents according to market prices. Cooking meals at home for working class individuals and guarding the house while owners are absent for extended periods of time are also said to be emerging as popular jobs for the elderly.
“There are some jobs for elderly women at the markets, but it is not so easy for elderly men. This is why some daughters-in-law say that they prefer to live with a mother-in-law that is still able to work,” a source in North Pyongan Province explained.
③ Marketing strategies honed to secure new customers: Free coffee and tea, rice cake samples
It has not been long since the culture of drinking coffee and tea started becoming popular in North Korea. While high-ranking officials and expatriates already knew about coffee back in the 1980s, the general public was generally unable to drink coffee until 2010. Lee Gang Ok (alias) who defected from Kangwon Province in 2010, noted, “A high-class restaurant in Wonsan used to sell coffee. It was expensive, but I bought it to look good. It made me feel like I was a modern woman.”
Coffee and tea were once favorite indulgences exclusive to the executive class or donjuLiterally "masters of money," donju refers to people who hav... More, but they are becoming increasingly popular amongst the working class. Coffee and tea are now often provided for free in shops to attract customers. Last April, a Pyongyang citizen visiting relatives in Dandong (China) commented, “I ran a public bath, and the customers liked it when I gave them tea for free.”
The practice of offering free coffee and tea within the service sector is also common in provincial areas. At local upmarket restaurants, coffee is often served as a dessert. Similarly, vendors in the general markets are also aware of the benefits of treating ‘the customer like a king,’ offering free tastings of rice-cake and sundae (Korean sausage) to their customers.
