Here is a question. When you are shopping, what item is the most difficult to buy? Probably, fashion items such as clothing. It is never easy to find a perfect outfit that meets your taste. It is a hard labor to browse numerous shops and try on different outfits. It gets more difficult to what you want when you look for outfits online because you may not get what you saw on screen. Although fashion items are one of the hardest item category to shop online compared to books and other daily supplies, the market for online fashion is growing continuously with not only more female but also more male customers buying their clothes and fashion accessories online.

Here, a new company emerged with a new idea. Headquartered in the U.S., the company sends clothes and accessories that match with the taste of customers based on the information they provide in advance, including their size, favorite color, design, style and budget. Customers can then buy what they like from a selection of five clothes and accessories picked by the company and return the rest. The company asks customers to give feedback when returning the clothes and accessories, so that it can provide them with better service next time. This innovative new online fashion retailer echoes the innovations of the world's largest rental service provider Airbnb and online transportation network company Uber, which have developed new business models fit for the digital age. In cities where Uber is actively operating, customer satisfaction is very high. It allows riders to easily book a driver, choose vehicle type and check on real-time driver updates and route information.

Data utilization is the driving force behind the success of these new businesses. They use technologies together with a variety of massive amounts of data to deliver what young digital customers want and need. These people, born between the early 1980s and the early 2000s, also known as millennials, typically struggle with deciding what to buy. They are heavily influenced by blogs, SNS and reviews in their online communities. As the digital generation overwhelmed with too much information, they are relatively slow in making a decision. Their purchasing behavior is different from that of previous generations. New services emerge today and people's behavioral patterns change accordingly. We are right at the center of that change. The digital and mobile revolution are changing our way of communication as well. I'd like to emphasize that we need to observe and keep pace with digital change.

The convergence of data science and human touch can change the world. While it was the invention of machines behind the industrial revolution of the 20th century, AI (Artificial intelligence) is creating a new paradigm today. The personalized shopping service provider mentioned above has 60 data-specialized scientists using artificial intelligence and 2,600 stylists working from home. Each stylist can serve dozens of customers thanks to the various algorithms designed to effectively process and store customer data. A few months ago, there was a 'GO' match between Lee Se-dol, professional Go player of level 9, and AlphaGo, an AI made by Google. The result of the match surprised us all. The potential of AI and data technology is limitless. Mobile phone will soon replace most of the jobs done by personal assistants. Every part of our life, from eating out to cultural activities, will be managed by the services from AI based on analysis of our tastes and lifestyle. This will happen soon.

The Asian market has grown hugely over the last decade. AMOREPACIFIC Group has explored new markets across China and ASEAN and seen remarkable growth in the process. In the first half of this year, international sales and sales to foreign customers through duty free shops in Korea are expected to surpass 40% of our overall sales. This was scarcely imaginable only a few years ago. I think we will be able to get it to 70% with a little more effort. Samsung Electronics makes only 10% of its sales in Korea. 10% is still a huge number given that its sales amount to KRW 200 trillion, but the point is that it earns the remaining 90% abroad. It found it tough stepping into the U.S. in the 1990s. Importantly, it didn't give up. Through its painstaking efforts, it achieved remarkable success in the U.S. market and became a top global company.

In 1815, the French army under Napoleon has a battle against the Anglo-Prussian alliance near the Waterloo which is now the territory of Belgium. This battle is as the famous Battle of Waterloo and the decisive event that led to the end of Napoleon's rule as the second Emperor of the French. Napoleon was exiled to the island of Saint Helena, where he died. Who then benefited most from the Battle of Waterloo? British government that defeated Napoleon? No. It was the Rothschild family and, specifically, Mayer Amschel Rothschild. He was born to a poor Jewish family in Frankfurt, Germany. He first made money by trading coins, antique goods and other commodities. He placed a Roman eagle on a red shield over the door of his house. The name Rothschild is derived from the German "rot schild" meaning red shield. He soon changed his business and built an enormous fortune through banking. He had five sons and the third son, Nathan Mayer Rothschild, built a foundation for business success in London, England. He was the only one who made a different decision while everyone else was predicting victory for the French army in the Battle of Waterloo. He gave a £100 million loan to the Prussian government and received the news about Napoleon's defeat ahead of the government messenger when most of investors in the British bond market were selling government bonds, thinking that the British alliance would lose the battle. The Rothschilds bought up all the devalued bonds at cheap price and leaked the news about the victory of the British alliance. Soon, the price of the British government bonds surged and brought a huge return to the Rothschilds.

But, such great wealth in the Rothschild family has diminished over time. Though it has allowed them to keep their heads above water as a specialized personal banking provider, its presence in the global financial market is weak. It lost its power over the history of global banking industry because it did not expand its business into the U.S. in the 20th century. The U.S. was a second-class country compared to the European countries back then. The five sons of Mayer Amschel Rothschild established their own businesses across Europe and exchanged information, but never challenged themselves to take on the upcoming U.S. market. Through a number of wars including World War II, the Rothschild family receded into the background. The family still holds a large fortune, but it's now recognized merely as a large asset management company headquartered in Europe.

The United States has a total population of about 350 million. Its population is not as high as China (1.5 billion people) or India (1.2 billion people). Yet, the U.S. is both developed market and also emerging market. In general, a developed market sees minute growth, but the U.S. market typically grows 4–5% each year. 4% growth of the U.S. market is comparable to the market size of a large country. Its beauty market is worth KRW 90 trillion alone, and when combined with the Canadian beauty market, this exceeds KRW 100 trillion. 1% in this market is equivalent to KRW 1 trillion. That is huge. So far, we have merely studied the U.S. market. Though we engaged in business, we never did so in earnest. But, we have grown competitive and the recognition of Korean brands and products in the U.S. market has fundamentally changed. Now is the time for us to dream big.

Of course, innovation in the Korean market must be our first priority. The Korean market is faced many difficulties, for example how to deal with an aging society, low birthrate and rising trend toward nuclear families. Income polarization continues to widen. Products that sell in the Korean market are either expensive or cheap. Mid-priced products are simply not marketed. Almost all industries are finding it tough to succeed. This is the reason why we need to innovate. The Korean market has the potential for innovation. Innovation does not happen when everything goes well. It comes from hardship. AMOREPACIFIC Group has continued to grow, riding on the success of five champion brands – Sulwhasoo, LANEIGE, Mamonde, innisfree and ETUDE HOUSE – but their success doesn't guarantee our future growth. While our five champion brands continue to grow, we have to nurture the next generation of champion brands here in Korea. Our efforts for this to happen have already begun. Since last year, many of our brands including HERA and IOPE have expanded into China, ASEAN and other bigger markets beyond Korea. In order to bring our efforts to fruition, we have to innovate ourselves in the Korean market and enhance our capabilities. We must innovate through a Test & Learn approach, to build up strong brands and introduce products of singularity to the world.