Consumers Say “Deceptive Tactics Make Discount Seem Larger”
Baek Jongwon Offers Direct Explanation... But Public Opinion Remains Negative
Baek Jong-won, CEO of The Born Korea, is facing a fierce backlash over the controversy surrounding the canned ham ‘Baek Ham Gift Set’ released for the Lunar New Year holiday. Although CEO Baek issued a direct explanation, public opinion remains largely unchanged.
On the 17th of last month, CEO Baek promoted on his YouTube channel ‘Baek Jong-won’ that The Born Korea was selling the ‘Baek Ham’ gift set, launched ahead of the Lunar New Year, at a 45% discount from the regular price of 51,900 KRW to 28,500 KRW. As a result, the gift set sold out on The Born Mall.
However, controversy arose afterward, accusing the company of inflating the regular price excessively and then selling it at a discount as a marketing tactic. In particular, some consumers compared Baek Ham with Spam, the market leader in canned ham, pointing out that Baek Ham’s price is relatively higher while its pork content is actually lower, raising suspicions.
In fact, a box of 10 cans of Spam, each 200g, was selling for around 18,500 to 24,000 KRW on online shopping malls like Coupang as of the 31st of last month. This is up to 10,000 KRW cheaper than the discounted price of Baek Ham promoted by CEO Baek, which is 28,500 KRW for a box containing 9 cans of 200g each.
Consumers especially pointed out that Baek Ham’s pork content is 85.4%, which is lower than Spam’s 92.4%, the top product in the canned ham market.
As the controversy continued, CEO Baek clarified on his YouTube channel on the 26th of last month that it was not a marketing trick. He added, “As a latecomer, production costs are higher,” “It is made closer to budaejjigae style, so more seasoning is added to cook it in broth,” and “It was created with the intention of helping farms by using less preferred parts of Korean pork.”
However, public opinion remains negative. As of the 31st of last month, the video posted by CEO Baek had over 500,000 views, but most comments criticized his explanation. Consumers are saying, “The problem is not just the high price, but deceiving consumers by making it seem like there is a large discount.”
Along with the controversy, The Born Korea’s stock price also took a hit. According to the securities market on the 2nd, The Born Korea’s stock closed at 30,500 KRW on the 31st of last month, down 550 KRW (1.77%) from the previous day. During trading, the stock price fell to as low as 30,250 KRW, marking the lowest price of the year.
This is less than half of the all-time high of 64,500 KRW recorded on November 8 last year, driven by the success of the Netflix variety show ‘Black and White Chef’ featuring CEO Baek, and significantly below the initial public offering price of 34,000 KRW.
NH Investment & Securities revealed that among the 18,115 investors holding The Born Korea shares through NH Investment & Securities, 99.99% have incurred losses.
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