Sinuiju and customer service shape 2016 market strategy

Seol Song Ah  |  2016-12-31 16:30
Although 2016 was a tumultuous time both inside North Korea and in the outside world, its markets have survived relatively unscathed. In fact, the markets are now more stable than ever, notwithstanding the earning losses incurred by multiple nationwide labor mobilizations and a volley of international sanctions following the North’s long-range rocket launch and fourth nuclear test.

North Korea’s propaganda apparatus has been working in overdrive to tout this newfound stability as the product of government policies. However, the residents themselves are quick to disregard such claims, knowing full well that the power of the markets has allowed them to weather the storm.

Contributions from the newly affluent middle class (donju) to the grasshopper merchants hawking their wares in the alleyways adjacent to the official marketplaces, have continued to develop and transform the market landscape.

In the final piece of Daily NK’s three-part series on new industries appearing in the markets in 2016, we look at the increasing importance of the city of Sinuiju, bathhouse culture trends, customer service, and the coal industry.

Sinuiju as a smuggling hub

Unlike border provinces such as North Hamgyong Province, in Sinuiju the smuggling network is in full operation in broad daylight. The volley of international sanctions levied against North Korea in early 2016 has evidently had little impact, with hundreds of tons of goods coursing through this artery into the country by boat alone. This has coined the phrase ‘smuggling trade’ amongst those in the industry, indicating the facility with which it is done. 

'If the water’s deep, you might as well put a huge ship on it," a source in North Pyongan Province told Daily NK, offering an aphorism to explain the current smuggling environment in the area.

“Obviously there are no tariffs with smuggling, so the Amrok River is teeming with boats [moving goods], even during the day. Offer 500 USD to the head at each checkpoint you pass along the river and you’re guaranteed safe, hassle-free passage.”  

In other words, one can buy and sell anything, provided they have the cash. Marine products, pharmaceuticals, gold, and even piglets were some of the most popular products moving through backdoor channels this year. 

"Chinese demand for North Korean pigs rose upon news that they are purebreds [rather than crossbred]. To provide some scale, the average smuggling ring [typically 2-5 people] sold around 300 piglets, each fetching between 500-1,000 RMB this year. The profits are staggering," she said.

Bringing public bathhouse culture to the home

Private steam baths and public bathhouses are popular when the temperature dips. These facilities are known to offer better facilities, amenities, and customer service than their state-run equivalents. But the entry fees remain burdensome to those living hand to mouth, with a single entry to a state run facility costing 2,000 KPW, and a private bath entry going for 5,000-10,000 KPW. This has increased the popularity of bath pouches at the nation’s proliferating markets. 

In North Korea, bath pouches are not the micromesh pouches often seen carried by bathhouse patrons in Seoul which hold their various shower products, but rather vinyl fashioned into a type of tent which is fixed to the ceiling, allowing a person to bathe inside with the structure trapping the steam.This is one of the hottest items in the markets this winter, with newer brands that lock in the steam better constantly streaming in across the border from China.

In markets across South Pyongan Province, 1-person colorless bathing enclosures sell for 2,000 KPW; colored equivalents go for 3,000 KPW. 

2-person capacity variants fetch approximately 5,000 KPW. A source in the region told DailyNK that these bathing bubbles generally last a year, which greatly contributes to their popularity, with residents opting to create a makeshift sauna at home rather than pay a premium at formal facilities. 

The rise of customer service

Customer service is an increasingly important facet of business in North Korea these days. As more North Korean consumers show a preference for quality over price and/or quantity, the intuition for customer satisfaction grew and is rapidly spreading. Accordingly, this trend includes careful packing and wrapping of goods to protect them, as well as boxing them up for the customer to easily transfer to their destination.

This becomes extremely important when it comes to undergarments, which serve as a sort of litmus test for customers to evaluate a given vendor. If a purveyor of intimates were to tell a customer to ‘just carry it [as is]’, as was common practice in the past, the client would be unlikely to return. 

In addition, more producers and purveyors of candy, snacks, tofu, and other consumables seek out plastic bags imported from China in which to place their goods for customers - a once entirely absent practice at the marketplace.

“As a seller at the market now you’ve absolutely got to put the customer first, being as agreeable as possible and making sure everything is wrapped up and/or placed in a paper [or plastic] bag. If people buy nice clothes and cosmetics and the seller does not place the items in a bag, the customer will walk away from the stall and go somewhere else,” another source in North Pyongan Province told Daily NK.  

“Plastic bags for foodstuffs and vegetables of all shapes and sizes come in from China, and now there are wholesalers specializing in professional wrapping material for that purpose.” 

Coal industry continues to thrive

Despite international sanctions - which include restrictions on coal - levied at North Korea following its fourth and fifth nuclear tests and long-range rocket launch this year, the volume of coal China imported from North Korea actually increased. The rapid increase in demand from China and the relaxed supervision over the quality of the coal coming in occurred as Chinese traders saw an opportunity to profit from comparatively cheap North Korean coal.

Foreign-currency earning enterprises tethered to the coal industry were quick to meet the demand. A market emerged for cement mining posts that replaced the old wooden equivalents, which frequently snapped, resulting in terrible accidents.

“As the price for cement mining pillars rose, entrepreneurs began to purchase the raw materials to produce them themselves. Because the cement posts outperform the wooden ones and can be used so much longer, their popularity is spreading rapidly,” a source in South Pyongan Province with ties to the coal industry said.

*Edited by Lee Farrand

 
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2016.12.27
Won Pyongyang Sinuiju Hyesan
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