Diffusion Via Network

If Seoul were heaven, then my new Canon is Gabrielle. My Hermes. My mode of connection and communication to this valiant city. It's also an incentive and an excuse to explore, thereby more outings, a major cut-back on my bank statement, and a renewed vow to not only photography, but filmography and cinematography as well. However, all in all the real amusement is who knew Gabrielle could be bought?

A picture of the Lotte Department Store at Jam-sil from the new camera. Canon 60D with 24-105mm f/4. It's only two days old and it hasn't had much outside air.

I bought the camera from Nam-dae-mun, the central oasis for camera and photography-hungry people to exchange pieces of their souls for small, usually black instruments that initially started it all as a pin-hole in a box few hundreds of years ago. It's not as bad as it sounds, really. You accrue something in return, just not in the business side of things. Now, at Nam-dae-mun there are at least 2 dozen shops that specialize in buying and selling cameras. Anything from parts to vintage film cameras, if you can't find it here then it's either non-existant in Korea or it's not up for sale. Choices in lens, cameras, parts, accessories, and services are even more diverse than what you would normally find on the web. Even more, the Nam-dae-mun camera district is so notorious that even the second largest camera and photography-related district in Korea located in Yong-san, few blocks below the city hall, primarily utilizes Nam-dae-mun as its gateway and extension for business. So you would see sellers from Yong-san bringing cameras and accessories to sell at Nam-dae-mun stores and buy other merchandise to resell them back in Yong-san. Consequently, Yong-san is a little more expensive but it still remains a haven for photographers because of the sheer quantity and the number of customers it attracts for not only cameras but for all electronic parts and goods. Though Nam-dae-mun remains as the go-to place for cameras, Yong-san is the godfather of all electronic goods.

In a world of globalization and corporate giants, it would be hard to imagine these dozens of camera retailers in Nam-dae-mun successfully competing against internet shopping malls. From G-Market, 11st, H-Mall, Lotte Mart Home Shopping, also Lotte Home Shopping, About, Interpark, CJ-Mall, and so on, with usually anything delivered free of charge from mere $20 worth of buy, I was puzzled how this was possible. Well, it turns out Nam-dae-mun retailers also compete in the internet shopping market. As well as running a storefront at Nam-dae-mun, they sell through personal websites and third-party accounts through websites like Auction and 11st. Think of them as eBay stores. But that's not all. This is not their only mode of survival and their source to out-compete the internet shopping malls. While these individual stores seem to act independently from one another and in fact, they are at competition in micro-scale, in actuality they all ride on each others' backs. And mutually, they thrive. I thought this was really interesting. Let me explain, and also tell you the story of how I got my camera.

I checked out 3 stores before I finally made my purchase. I was willing to make my purchase at my first store actually, but they didn't have the camera in stock. Now, I went to Nam-dae-mun with a specific camera model and lens in mind, so when they told me they didn't have to camera in stock I was on my way out. But the store owner stalled me and asked me to hold on while he made few calls. Curious enough, he started making calls to the other camera stores at Nam-dae-mun. He must've made at least 4 or 5 calls before he told me that now he 'really' didn't have it in stock. I didn't get what he just did and there, and in the back of my mind I must've wondered what he meant by he 'really' didn't have it. But I just walked out, though right after his out-of-stock report he tried selling me some other models I wasn't interested in the least bit. The second store carried the model, it also had the lens I wanted, and all the other accessories I was looking for, but the man was dishonest. He must've noticed I was a foreigner and initially charged me something around $200 more than the first store. This would've been fine if I knew how to bargain properly but I know myself and bargaining isn't one of my life-given cards. I don't know how to play that hand. Which brings me to the dangers and the downside of Nam-dae-mun; if you don't know how to bargain, there's a great deal of chance you'll get ripped off. In Korean terms, it's called 'bah-gah-gee'.

Well, after that I knew I was at a disadvantage so I simply told the owner that I needed to think about it some more, and I excused myself outside. The third store is where I bought my camera. They had it in stock, including everything I was looking for. The guy was honest and I got a decent deal, even cheaper than what I'd pay online. He called out a set-price, I actually liked the price to begin with but I called lower, and he let me have them for about $50 cheaper. The trick is to pay them cash. But before I could head out, I needed to wait for my 16GB SD card to be delivered from the store few meters down the road. By then, I've already completed the transaction and my tension had loosened. It was also nearing closing time so the store had become empty. Casually, I started talking to the owner about few film cameras and how much they were on the market, mainly my Nikon FM2 along with few Nikon and Canon lens. Then, I got curious about the stores tagging other stores business so I asked him, and the owner really opened up, much more than I had anticipated. He told me about his customers from Yong-san camera resellers, the sheer amount of cameras they buy in bulks which clock at few hundreds of each model few times throughout each month, and most interestingly, how all the stores in Nam-dae-mun act to supply each others in times of need. And when they do, they sort of just 'put it on the tab'. This was when it clicked to me and things made sense. The Nam-dae-mun camera stores, and perhaps others, act as a giant network which diffuses all the revenues while maximizing opportunity. And I figured from there on how it must work, at least in the ball scheme.

Imagine that you're one of the employers at the Nam-dae-mun camera scene, and a customer came in looking for a Canon 60D. It's a mid-level camera which costs around $1200 just for the body. Suppose that because of the big free-extra-battery-giveaway event by Canon which ended the day before you don't have anymore of the 60D's in stock. But the other stores might, so you give them a call; there are about half dozen places which you have good relationships with and which you constantly tag back each other for supplies. Now, it's very likely that one of those 6 or so stores you've contacted actually have them in stock. On several occasions you'll hear a lie that they don't have it while they actually do because they want the whole gain for themselves while on several occasions you'll hear a 'yes'. Now, a 'yes' means you'll split the income, most likely you'll get the better half of it. But the sell is definite and all parties win, including the customer. But in between the deal made by the two stores there are numerous factors involved which determines whether it's a lie, a 'yes', or, though probably rare, an honest 'no'. Sellers know that when a customer exits his first store he's less likely to buy something at his second store, and as he continually progresses through his store visits the chances decline more and more. Now imagine you're the seller on the other end of the line, this is one of the risks you take when you say 'no' to a store requesting for a camera that you actually have in stock. But if the camera is in high demand and because of its recent release the gain is that much more profitable, then you weigh the options to whether take the chance or split the income. The 60D, for example, is currently in high demand and the profit is good; so more often than not you say 'no'. Another factor is the likelihood of altruistic payback from the other store in times of your need and request. The number of tag backs and the revenues from fellow stores should ideally be similar to each other. Few other factors are availability, variance in prices from one store to another, customers' knowledge of the camera and his savvy for business skills, and the proportion of the split. Now, in a chance you say 'yes' in the scenario above, you might lose out a bit on the whole gain but in a bigger, longer time-scale you accrue more or less similarly to the stores around you. Maybe each time this happens, you wish the customer had visited your store instead of the other one but because this happens with almost every other customer in Nam-dae-mun, you quickly forget about the whole deal. Diffusion of revenues, tag backs, and intra-store networks. Together everyone thrives. And the system keeps rolling.

This example of together-ness mindset is one of the best things I like about Korea, though it can have a downside such as formation of cliques and exclusivity. But you won't find this sort of market and district still in bloom anywhere else in North America because this business model isn't applicable to the West. Perhaps I missed out on few cities and if they exist, I've yet to be informed about camera retail districts in New York or LA, but back in Toronto my nearest camera store was the Best Buy. It had the lowest prices on almost all electronic goods, but it was the only competitor in the neighborhood save for another franchise down the road, Future Shop. Most likely, all the family-run camera stores and film development studios had been outsourced by franchises like Best Buy, Future Shop, and Wal-Mart. It's a loss on the West's part, but here in the East the system's still up and running. Which brings me to a state of wonder and fascination at Seoul's curious mix of bustling cheap, open-markets and classy, expensive mega department stores. Places like Nam-dae-mun and Dong-dae-mun are where you go to buy a decent duck-down jacket for less than $50 while places like Lotte and Hyundai Department Stores are where all the women get their Louis Vuition purses. They are situated at polar ends of each other, but they both flourish. And there's no sign of any of the flea markets and districts like this disintegrating, or getting usurped by corporate giants just yet. I think it's quite a feat.