Here we are at this, the last assembly of the year. Thanks to your hard work, we have posted good results for the year, despite all the factors stacked against us. I'd like to thank you all for your commitment and hope that all is well on your end.

The American business magazine Fortune has recently named Nike CEO Mark Parker the Businessperson of the Year, among the 50 top global business leaders. Considering the IT moguls had been Fortune’s favorite awardees in the recent few years, it comes as a surprise that this year’s winner is from consumer goods sector to which real economy is more associated. Taking office as CEO in January 2006, Mark Parker has achieved remarkable results. Nike has doubled its sales in nine years, from USD 13.7 billion in 2005 to USD 27.8 billion last year, while net profit has tripled from USD 1.2 billion to USD 3.3 billion. What’s more, it expects to see even better results at the end of the current fiscal year.

Given these strong results, it’s worth us reflecting on the secrets behind the phenomenal success of Nike. Nike was originally formed as Blue Ribbon Sports (BRS) by University of Oregon track athlete Phil Knight and his coach Bill Bowerman in 1964 as a distributor for the Japanese shoe maker Onitsuka Tiger (now ASICS) in the US market. They then changed the name to Nike after the Greek goddess of victory Nike (pronounced ni-key).

Prior to becoming a businessman, Bill Bowerman was one of the greatest track and field coaches in the history of the United States. He won numerous championships and set numerous records. It was while coaching that he set about developing high-functional track shoes for athletes. He tested his shoes with young athletes at the University of Oregon, including Phil Knight. Phil Knight recognized the potential of shoes designed and developed by Bill Bowerman and they soon jumped into business together.

The story of how Bill Bowerman was inspired by looking at his wife pouring dough into a waffle iron is now the stuff of legend. Bill thought that by pouring a mixture of rubber into a waffle iron and turning it upside down, he would be able to make a better sole for running shoes. That was the moment the famous waffle sole was born. It was lighter, more comfortable and provided better traction than that of existing soles. Moreover, it brought about a revolution in the running shoes market. As more and more athletes wore Nike shoes at the Olympics, people all around the world began to fully appreciate the true value, adding strength to the reputation of Nike. Back in those days, the athletic footwear market was nowhere as big as it is today. Nevertheless, Nike swept into the lead and went from strength to strength, supported by the jogging craze in the United States in the 1970s and the record-breaking achievements of track and field athletes sponsored by Nike.

Nike had retained the No.1 position in the sportswear market, until it lost to Reebok for two consecutive years with aerobic shoes as everyone was swept by aerobics fever. In response, sought ways to reclaim its position by adding fresh fuel to the development of more innovative new products. It signed a sponsorship deal with NBA star Michael Jordan of Chicago Bulls and brought the Air Jordan designed for Michael Jordan into the world. It was such a huge hit that it put Nike back to the top. In 1988, Nike unveiled its Just Do It campaign, now recognized as the best marketing slogan of the 20th century and an undoubted contributor to the growth of Nike.

Mark Parker, now CEO, joined Nike in 1979 as a footwear designer. Most of Nike's greatest shoes, including the Air Max and Air Jordan were made by Mark Parker. The legendary designer has brought about numerous innovations as the director of design concepts and engineering, vice president of consumer product marketing, vice president of global footwear and head of special projects for R&D and design. The world-famous Flyknit Racer is one of his innovative products and this model alone makes USD 2-3 billion in sales each year. In general, the weight of an athletic shoe hovers at about 200g, no matter how lightweight it claims to be, but the Flyknit Racer weighs a mere 160g. It is so light that it almost feels like you’re wearing nothing but socks. By using a blend of yarns knitted together instead of fabric cuts in traditional athletic footwear manufacture, Nike have reduced waste down to 1/4 and streamlined the entire process. All the innovations of Nike are born in Nike Innovation Kitchen, which in turn enhances the global value of the brand.

Apart from product innovations, Nike is famous for its digital innovations. In 2006, Nike released a performance tracking tool, Nike+, which features Apple's digital sensor. Nike+ allows customers to check how much workout they have done and share their exercise tips with other people. It also provides communities such as Nike+ Run Club and Nike+ Training Club and even a customization service NIKEiD, which offers a range of personalization options from color to design and materials. Though Nike stopped selling the FuelBand last year due to several reasons, including the advent of similar devices such as Apple's iWatch, it was quite an innovation, as it successfully combined data and IT to measure and analyze the movement of the wearer. Nike knows how to make good use of new innovation to serve customers. It is particularly noted for its capabilities in digital marketing using e-commerce and social media platforms, for example Instagram and Facebook.

Driving it all is Nike’s strong sales capabilities. It holds as much as 68% of the U.S. footwear market share. To put it another way, two out of three American customers purchase Nike footwear. It is phenomenal that Nike has managed to record an annual growth rate of 10% or higher over the past ten years in such a mature market as the U.S. Yet, Nike continues to study customers. The Chinese economy is slowing down, but Nike is still growing fast in the Chinese market. It is making its best effort to understand Chinese customers and study their color, texture and design preferences. In fact, Nike saw an increase of 30% in sales in China compared with the previous year. Annual growth of 30% is huge to a company as big as Nike, which is worth over several trillion KRW. Not long ago, China had Singles Day, the Chinese version of black Friday, and Nike did fantastically well on that day. Through it all, Nike never forgets to interact with customers. It runs over 1,000 stores and provides what customers need through its website.

Dear Asian Beauty Creators,
The story of Nike gives a lot to think about how we should work together to achieve our goal of becoming the Great Global Brand Company. We need to make innovative products of singular value that hold a fascination for customers and communicate with customers through digital and mobile innovations. We need to change the way we think about PR and marketing to come up with new ideas. Digital environment and culture are evolving faster than ever. In the past, companies and customers had an asymmetric relationship, with companies being the one providing information. Now, that’s changed: customers provide as much information as companies give them – and perhaps more. The relationship has become symmetric. Customers today see and pick only what they want. Old media platforms are in crisis. The way we deliver contents and messaging has clearly changed. Only companies capable of making the most of this change can survive. Advertisements in hard copy magazines were something unavoidable, but with mobile, customers can skip over ads. If we stick to the old ways of doing things in this mobile age and allow ourselves to stay complacent, we will surely and inevitably fail.

TV viewing patterns have irrevocably changed. The number of channels has increased and the advent of IPTV has led to the decline of the public and cable TV markets. We can now watch any channel we want, whenever we want – and in high definition. The patterns of how young people experience and consume media are important. If we fail to understand their consumption patterns, we will end up far from success. The key to marketing strategy has changed with big data. Since the tools have changed, the way we use them needs to be updated accordingly. Nike has been done a good job of embracing change. Let’s take this chance to reflect upon whether we are keeping up with the changing world. Digital and mobile are not just useful tools, they are essential to our very survival.

Just as Nike has done, we have to strengthen our strong hold of the Korean market. Many said that Nike would not be able to grow further once it secured 30-40% of the U.S. market, but it worked toward a greater goal and increased its share of the market to nearly 70%. We can do it, too. With creative thinking, there is nothing we cannot do. We still have many target markets, including department stores, and much yet remains to be done. We have to study the Great China Region, which encompasses mainland China, Hong Kong and Taiwan, ASEAN and North America regions, covering the U.S., Canada and Mexico in more depth; we must enter their markets and write new stories. Let’s focus on four pillars, one in Korea, China, ASEAN and North America, to build up a solid house of our own across the world. Then, let’s build another four pillars in Western Europe, India, South America and the MENA (Middle East and North Africa) region. We have to continue to devote considerable effort into understanding the millions of customers we have not yet met and providing them with what they need.

The concept of the store has changed. The store is now more than just where you make the purchase, but a kind of showroom. Not only does the store have to display products well and in an organized manner, but it also has to provide the best shopping experience with a full description of the products and with excellent service. Although we have a whole myriad of things that have to be done, we have only one thing to keep in mind: and that’s our goal. Let's learn what we have to do and how we need to challenge ourselves by studying companies like Nike.

Dear Asian Beauty Creators,

I'd like to talk about a book that I recently read. It’s called Give and Take. There are three types of people in the world: givers, takers and matchers. About 20% of people are givers, 20% are takers and the rest are matchers who give as much as they take. According to a study on the life of givers, their income is relatively low and they have higher chances of becoming the victims of crime, while their performance and influence are consistently underestimated. But, despite that, the author insists that we need to be givers because givers are the ones that succeed most in the end. For instance, a 10-year study of medical students found that givers had the worst grades in the first year as they were busy helping their peers study and giving them a leg up at the expense of their own time to study. At first glance, the life of givers seems to be mired in failure. But, sixth-year students with the highest grades and better chance of becoming a medical specialist were most likely to be givers. They learned what they were good at and how to give and accept help while helping their peers. In the short term, takers seem to have a successful life, but in the long term, the positive attitude of givers toward their life wins the trust of people and leads to long-term success and achievement.

I will give you another example. There was a guy named Samson in the United States. Growing up in a poor family in Illinois, he began his political career with his first campaign for the Illinois General Assembly at age 23 but lost. He then started a business with a partner on credit, but the business failed after his partner died and he fell into debt. To pay the whole debt, he ran for the election again at age 25 but unfortunately faced strong candidates, one being a former State Supreme Court judge and other being the grandson of a famous historian. Two competitors were much strong than Samson in terms of experience and influence. But surprisingly Samson rose to first place in the opinion polls with a 44% approval rating. He, however, gave way to a candidate with a 9% approval rating and helped him win the election. Why? Samson found that one strong candidate was involved in corruption and he sacrificed himself for the greater good. He was the same when he worked as a lawyer before running for the election. He refused to make the argument for clients who he believed to be guilty. By doing so, he could not make money and become a successful lawyer, but he held firm to his principles. Samson was a typical giver.

Though he was smart, his considerate and generous give-way attitude failed to have an impact on the public and eventually he withdrew his candidacy for the U.S. Senate. He took up the challenge again, but failed. In the end, though, he won a nation-wide election. People who supported him in the election were those whom he had helped in the past. His life was by no means all smooth sailing and he had no impressive background, but he put others before his own interest and, in the end, reached the top. He was none other than Abraham Lincoln. Samson was his pen name. Lincoln filled key cabinet positions with candidates who had lost against him in the election and built a harmonious relationship with them, which led to the victory in the Civil War. He also took full responsibility for his men and managed the state upon trust to bring together the United States.

Dear Asian Beauty Creators,
IT companies based in Silicon Valley are basking in their renaissance. One of the driving forces behind their success, in my opinion, is their culture of giving. Because of their good will to take interest and lend a helping hand to each other, they have grown together. As they say, the most beautiful thing in the world is good will.

To go fast, you can go alone; but, to go far, we have to go together. Each of you is a rough diamond. You have your own capability and potential. If you polish yourself and allow others to help with the polishing, you will become a jewel of true value, as raw stones are always ultimately polished into fine jewels. Let’s work to let our diamonds shine by complementing and supporting each other as we work together toward a common goal. Let’s make a company which serves customers all around the world and make them beautiful. While doing so, let's continue to challenge ourselves and become creative master artisans.

Lastly, a very sad event took place in Paris last month. I send my most sincere condolences to all those affected and hope that they can make a full and speedy recovery and peace in mind. We are nearly at the end of another year. Take a moment to look back upon the past months and allow yourselves time to rest and replenish energy for the year ahead. Thank you.

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