S. Korean golf simulator maker tees up for global swing

By Lee Minji
SEOUL, July 13 (Yonhap) -- For South Korean golfers, golf is no longer a sport that can only be enjoyed on lush and expensive countryside greens on sunny days. It can also be played indoors, rain or shine.
A growing number of golf aficionados are flocking to about 5,000 neighborhood screen golf cafes across the country, where they can swing their clubs at an interactive screen on the wall that displays picturesque sceneries of world-famous golf courses.
Screen golf cafes are popular here due to their low costs and easy accessibility, with 1.3 million South Koreans enjoying the sport virtually. While the real golf experience may involve two- to three-hour drives to provincial country clubs with membership fees as much as 1.4 billion won (US$1.3 million), an 18-hole round at a Seoul screen golf cafe takes an hour or so, costing between 15,000 and 20,000 won.
The surging popularity of screen golf cafes, which have grown into a 1.5 trillion won industry, has proved to be a bonanza for Kim Young-chan, CEO of Golfzon Co., which provides golf simulators to indoor ranges.
Golfzon, with a dominant market share of 84 percent, supplies golf simulators to some 3,800 screen golf cafes across the country. Established in 2000 by the former Samsung Electronics Co. employee, the company saw revenue expand more than 100-fold in its first six years of selling golf simulators. In 2010, the company raked in a net profit of 67.1 billion won on revenue of 184.3 billion won.
Kim said he believes the company can also pull off such a feat overseas as a growing number of foreign golfers are also opting for virtual golf in pursuit of fun at cheaper costs.
"Overseas revenues are quite weak at the moment, but we believe they will account for half of our profit in three to five years and eventually reverse the pattern," Kim said in an interview with Yonhap News Agency.



In 2010, the company's revenue from exports reached 5.3 billion won.
"There are several markets that have high potential. China, Japan and Taiwan are some key target markets," said Kim, who exports golf simulators through distributors in 30 countries.
Kim said business prospects in China are quite rosy, thanks to the country's newfound love for golf. According to industry data, China's golf population stands at around 5 million, less than 1 percent of its total population. But the data also showed the golf market in the world's No. 2 economy is growing 25-35 percent each year.
"The business outlook in China was quite fuzzy up until last year. But we've started to see tangible results as the Chinese government moves to foster golf after it was selected to become an Olympic sport in 2016," he said.
According to Kim, Beijing's golf courses are packed with local golfers, a dramatic change from three years ago when half of the golfers at the courses were foreigners. Kim said despite the rising popularity of golf, there's still a lack of golf practice facilities, which indicates more room for Golfzon's China expansion.
In a bid to bolster its regional footing, Golfzon also plans to establish a local subsidiary in Taiwan after setting up offices in Japan, China and Hong Kong.
The CEO, a 12-handicap player, stressed that Golfzon aims to boost its presence in advanced economies where golf is already established as an everyday sport.
"There are two aspects of virtual golf. One is 'another field,' which substitutes for actual golf courses due to reasons such as cost, time and weather." said Kim.
For instance, Canada is one market where this theory can be applied. Toronto's winters can last up to six months, which means there are high chances Canadian golfers may opt for indoor venues to play golf, Kim said.
"Another aspect is 'one of them.' Virtual golf can be deemed as one of the many hobbies people enjoy, not as a substitute for real-life golf," Kim said.
"There are some features that only virtual golf has, whereas real-life golf doesn't," he added.
These include enjoying real-time tournaments with other golfers or taking swings at internationally recognized golf courses -- such as those in Pebble Beach, California. Kim said if these distinct features are well promoted, virtual golf has the potential to gain success in advanced markets.
The CEO said his company plans to continue investing substantially in research and development (R&D) to bolster these features.
"We flag up to 10 percent of our profit on R&D, and 47 percent of our employees work to improve technology, to simulate an experience close to a real one," said Kim.
The CEO said these employees have been a major driving force for Golfzon's success. The latest developments allow users to review their swings on their smartphones and tee up on golf courses simulated by aerial photographing, he said.
"Every year, we recruit around 70 people for R&D. Hiring more R&D talent is a must to accelerate overseas expansion and step up as a global golf company," he said.