Hayoung Kim is a Senior Researcher at LG Household & Healthcare, a major South Korean consumer goods company founded in 1947. This LG consumer goods business encompasses cosmetics, household goods, and beverages – they’re also the South Korean bottler of Coca-Cola.
We sat down with Kim to chat about how LG H&H cooperates with startups in South Korea to drive innovation forward.
What are the key areas of overlap where LG Household & Healthcare hopes to cooperate with overseas startups?
Kim: LG H&H loves to cooperate with tech startups, specifically those that create synergy in each of our business categories: beauty, household goods, beverages, and health foods.
We have no special restrictions on where or how we collaborate with startup innovators – as long as it strengthens the competitiveness of our businesses and helps us expand into new ones, we’re all ears
Can you tell us more about any cases where you’ve collaborated with specific startups?
Kim: Yes, there have certainly been many cases.
For instance, we worked with a green tech startup called Urban Miner. They have a technology that turns carbonized coffee grounds into a safe and clean eco-friendly material. The company’s resource circulation business model recycles functional raw materials and industrial waste, such as cosmetics and household goods by upcycling the by-products. For example, they upcycle coffee bean after extracting the coffee grounds through activated carbon.
In what ways does LG Household & Healthcare most often collaborate with international startups?
Kim: Usually we work with startups through tech sourcing and the joint research done in cooperation with our technology research institute. We implement other cooperative models in various forms, such as commercialization through our brands as well as equity investment or mergers and acquisitions (M&A).
What are the typical procedures and timeline for startup cooperation projects at LG Household & Healthcare?
Kim: To start off, the relevant departments at LG review any potential startup collaboration opportunities. They look at everything from the technology, the startup’s business, and all the financials.
This whole process usually takes three to four months, but it might take longer depending on the type of project. From there, we sign a contract and get started on project execution.
What are your key evaluation criteria when selecting corporate-startup cooperation opportunities?
Kim: First, we look for the proven and unique technology as well as its marketability. The market competitiveness of any concept is critical. We also check for any potential synergy creation or any connection/expansion opportunities with our current businesses.
Second, we evaluate corporate collaboration opportunities along the lines of expanding our existing business categories into new geographic markets. So cooperation within similar industries and business areas as our own is definitely something we pay attention too.
Third, we conduct technical assessments and evaluations by our relevant departments within the research and development (R&D) center. We also run any opportunity through our internal verification systems, such as getting opinions from any relevant business departments or divisions.
What are some of the most common challenges you encounter when cooperating with overseas startups?
Kim: Any international collaboration will have its own challenges or difficulties, of course. Some of the most common are work delays due to the geographic distances. Any overseas startup is usually a long way from Korea, so time zones and geographies can’t be ignored.
Regulations are another big one since every country has different legal constraints and contexts. Culturally, variations in business procedures are to be expected, and of course, communication differences will affect everything else.
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