CNBC Meets

Asia business in 1990s: 'Drinking, geishas, bribes'

Sung-Joo Kim:  Forget glass, try a 'concrete ceiling'
Sung-Joo Kim: Forget glass, try a 'concrete ceiling'

Japan and South Korea were the "worst" places for gender inequality and doing business there as a woman was like dealing with a "concrete ceiling", says the founder and chief executive of Asian fashion business Sungjoo Group.

Sung Joo Kim, the South Korean entrepreneur who also runs luxury European bag brand MCM, said there were very few women in business when she started out in 1990s and men were "extremely uncomfortable" working with women.

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Even the fashion retail business in South Korea was male-dominated when she began, Kim added. When she launched her luxury distribution firm, she was shut out of deals and isolated for being a woman.

"They (men) didn't even want to make a deal and I said 'why?'. And it's because they have to go on heavy drinking parties," Kim told Tania Bryer for CNBC Meets.

Geisha, Kyoto, Japan
Peter Adams | The Image Bank I Getty Images

"These drinking parties are often associated with geisha parties – obviously the way women behave, they are serving men of course," she said.

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Kim's first stint in retail was as a shop assistant in Bloomingdale's in New York before later establishing herself as the franchise holder for luxury brands such as Yves Saint Laurent and Sonia Rykiel.

She launched her business in 1991 with the rights to distribute Gucci exclusively in South Korea. In 2005, she bought German bag label MCM and since then has grown annual sales from $100 million to $650 million since.

"I know it took such a heavy toll to convince retailers to have us. It was very hard to penetrate – not just a glass ceiling, for me it was like a concrete ceiling. It was often associated with corruption because they have all this insider information trading and there's some bribing going on and that's the way they keep up their power network ring," said Kim.

Sung Joo Kim attends the MCM Craig And Karl Launch Event
Dave M. Benett | Getty Images

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Prime Minister of Japan, Shinzo Abe pledged reforms that will enable "all women to shine" speaking at the "Women in Business" summit last week, reiterating plans he has made in recent speeches and at the World Economic Forum in Davos last year.

Last year, Japan ranked 105th among 136 countries in the Global Gender Gap Report issued by the World Economic Forum. The Japanese government said it plans to boost the number of women in leading positions 30 percent by 2020.

Kim said it was her insistence on transparency and clean tax records that ultimately helped her company to succeed and survive the Asian financial crisis in 1997.

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"During the Asian financial crisis and all these small to medium-sized companies going bankrupt because suddenly the interest rate's gone up more than 30 percent, the market crashed and there was exchange rate differences. Of course my company lost a lot of money too, but we were the ones surviving because we had such a transparent record," she said.

The full program - CNBC Meets: Sung-Joo Kim - will air on CNBC Europe on Wednesday 4 June.