[K Changers]④ A Company That Delayed Salaries, Bonus After 14 Years... Key Player in K Design

Company Overcomes Failure with Genius Designer's Help
Plans to Give Employee Bonuses for the First Time in 14 Years

Representative K-content such as music, webtoons, games, and dramas have captivated the world through online connections and broadcasts. This is the advantage of content without time and space constraints.

Until now, K-content has mainly been online, but it is now expanding into offline fields as well. The leading company is the design firm District. It is rising from a design company left by a genius designer to become the world’s top design company.

The work titled WAVE. It is the starting point that made District famous.

More than 100 million people have watched videos featuring the offline works created by this company on platforms like YouTube. Through its exhibition business ‘Arte Museum,’ it entered overseas markets for the first time last year (Hong Kong). The opening in Chengdu, China (on the 28th) is also upcoming. It has won the main prize at the German iF Design Awards for three consecutive years (2021, 2022, 2023). This is one of the world’s top three design awards. Last year, it also received the government-hosted ‘Excellent Design Product’ grand prize. It was the first time in 37 years that a small or medium-sized enterprise won this award. It is truly a ‘K-Design’ export company.

District was a company that fell into capital erosion just seven years ago. There were times when employee salaries were delayed. Such a company turned profitable two years ago. Last year, it posted an operating profit of 10.8 billion KRW (sales of 41.1 billion KRW). It plans to pay performance bonuses for the first time in 14 years. In June, all employees will receive a ‘bonus’ of at least one month’s salary. The number of employees has also doubled since the capital erosion period, now totaling 245.

A Genius Designer Ahead of His Time

The model house 'Believe Acent' is a winner of the 2023 iF Design Award.

District, which opened in 2004, was a company where industry experts gathered. Co-founders and former CEOs Choi Eun-seok and Kim Jun-han were considered the ‘four pioneers’ of the first generation of web designers. The other two were Cho Soo-yong, former CEO of Kakao, and Han Myung-soo, CCO of Baedal Minjok. The company name District (d’strict) was chosen to mean designing (design) strictly (strictly).

It was different from typical design companies. Companies commonly called ‘design agencies’ rely on delivering products to clients and receiving payment. They are B2B-based. District also earned about 10 billion KRW annually through B2B. However, it was not satisfied with this. It aimed to be a ‘design company,’ not an agency. It dreamed of becoming the world’s best in digital multimedia design beyond Korea. It ventured directly into B2C business based on IP (intellectual property). This was a rare idea domestically and globally.

A representative example was the world’s first 4D theme park created in 2011. It was the work of former CEO Choi Eun-seok, a sociology graduate from Kyung Hee University who self-taught design and was called a global pioneer of digital art. However, it ended in a ‘sad ending.’ The 15 billion KRW investment disappeared into thin air. Choi, who was praised for inspiring passion and confidence even in those around him, took his own life. Management worsened steadily. At the same time, the B2B business also faltered. Eventually, District fell into capital erosion with liabilities exceeding assets. Despite being a promising company with nearly 30 billion KRW in cumulative investment at a time when startup and venture investment concepts were not well established, it was pushed to the brink.

Digital Art Evolving with the Times

In this life-or-death crisis, District replaced its leader. Current CEO Lee Sung-ho took over the company in 2016. He majored in economics at Seoul National University and is a former certified public accountant at a major accounting firm. This is an unusual background for a design company. He first connected with the company as a substitute service worker. The reason he continued working without returning to his ‘hometown’ was his belief in his colleagues’ skills and their spirit of challenge.

CEO Lee gathered funds through apartment mortgage loans and personal credit loans for a ‘last shot.’ He especially focused on SNS marketing. The ‘Wave’ (artwork name WAVE) that adorned the COEX electronic billboard three years ago surpassed 100 million views combined on YouTube and other platforms. The digital art of waves crashing right before people’s eyes in the middle of the city center delivered a shockwave to the public at the time.

Having confirmed the potential, District once again challenged the B2C business. It launched the immersive media art permanent exhibition ‘Arte Museum.’ It was designed to be Instagram-friendly. It became a huge hit as a popular spot for taking ‘proof shots.’ Starting from Jeju, it attracted over 4 million visitors across three locations including Yeosu and Gangneung.

District placed great importance on location. Since permanent exhibition halls require frequent content changes if located in city centers, tourist destinations are more suitable because they are not visited frequently, allowing content to be updated on an annual cycle without issue. All four domestic Arte Museums are located in famous tourist spots. The 4D theme park that ended painfully 12 years ago was in Ilsan.

Goal of 500 Billion KRW Sales Within 3 Years

Title: Waterfall-NYC. This artwork, displayed on the electronic billboard in New York's Times Square, attracted global attention.

The digital art that adorned New York’s Times Square was also District’s work. With the success of Arte Museum added, District has become a company in the spotlight. It received a 100 billion KRW investment earlier this year. Based on this, it has already finalized plans to install exhibition halls in five locations by early next year: Chengdu (China), Dubai (UAE), Las Vegas and LA (USA), and Yeongdo, Busan. The goal is to expand to 20 locations within three years. All share the commonality of being tourist destinations.

If the 15 additional Arte Museums to be expanded maintain Jeju-level performance (over 15 billion KRW annually), sales of 300 billion KRW will be generated. Moreover, overseas exhibition hall ticket prices are two to three times higher. Continuing existing B2B business such as corporate deliveries and the LED.ART licensing business started last year, once on track, annual sales of 500 billion KRW are considered achievable. A kids park combining digital art and a kids cafe will also open in Jeju within this year. If all goes according to plan, District’s mid- to long-term vision includes challenging a direct listing on NASDAQ.

CEO Lee said, “I agree with the saying that the most popular is the most artistic,” and added, “I will take the lead in making visual art not an exclusive privilege of a few but something for the public.”