Marketing In North Korea (24)

Broken Supply Chains, Unbroken Dreams

Jeon Byung-kil

Senior Consultant of YESInnovation

former of Secretary General of UniKorea Foundation

The First North-South Brand: Hanmaeum Cigarettes

Hanmaeum (which means "One Heart") was the first brand created through a partnership between North and South Korea. South Korea provided the money, machines, and technology, while North Korea provided raw materials, workers, and a factory building. 

In 1998, a South Korean company called Korea Tobacco & Ginseng Corporation (now KT&G) made a deal with North Korea’s Kwangmyongsong General Corporation. They agreed to work together to make cigarettes.

In 2000, the Hanmaeum cigarettes were officially produced at a factory in Pyongyang, the capital of North Korea. These cigarettes were sold in both countries: about 800 million packs were sold in South Korea and 200 million in North Korea. South Korea also hoped to sell these cheap cigarettes to China.

But the project didn’t last. By the end of 2001, the Hanmaeum brand stopped being made. North Korea’s poor electricity supply and outdated technology made it hard to keep quality high and production steady. This showed a major problem: even if companies wanted to invest in North Korea, they couldn’t do much because the country lacked reliable infrastructure like water, electricity, and transportation.

This failure led to a new idea: building a special industrial zone where North and South Korea could work together with stable facilities. That idea became a reality in 2004 when the Kaesong Industrial Complex opened.

SISBRO: A Clothing Brand from Kaesong

In 2014, when the Kaesong Industrial Complex was operating at full speed, several clothing companies decided to launch a joint brand called SISBRO. Most of the businesses in Kaesong were small and made clothes for other big brands (called OEM factories). After a shutdown in 2013, many companies in the complex lost their clients and didn’t know what to do next.

Seven companies (later 15) teamed up to start SISBRO, a clothing brand that made jackets, jeans, shirts, underwear, socks, and shoes. The name SISBRO combines “sister” and “brother,” symbolizing that North and South Koreans are one family. 

It also refers to the idea of “South Korean men and North Korean women,” which is a traditional stereotype. The message was clear: this was a brand about unity and peace that anyone—no matter their gender or nationality—could wear.

SISBRO also made headlines in 2014 when it provided uniforms for 7,000 volunteers during Pope Francis’s visit to South Korea. It supported historical tours for people with disabilities and was even introduced at a United Nations business event in Turkey as a peace-focused company.

The project also created a company called K is One—which stands for “Korea is One.” SISBRO wasn't just about making clothes. It represented cooperation between South Korea’s materials and design, and North Korea’s labor. It was a symbol of peace.

What Made SISBRO Different—and Why It Struggled

One big difference with SISBRO was that it openly told customers the clothes were made in Kaesong, North Korea. Normally, companies wouldn’t say where their clothes came from, even though the quality was high. Most people just assumed the products were made in South Korea or somewhere else in Asia. But SISBRO was proud to say that North and South had worked together.

The companies that made SISBRO had strong motivation to succeed and offered lower prices while keeping the quality good. When a trade agreement between Korea and China was signed, people thought SISBRO might grow even faster. They expanded into cosmetics and shoes, opened a store in Goyang city, and made plans to sell in China. There was even a plan to build a big North-South logistics park in Paju.

But in February 2016, everything changed. The South Korean government shut down the Kaesong Industrial Complex because of rising tensions with North Korea. SISBRO was forced to close. The idea of a brand created by both North and South disappeared, and the companies involved had to stop their plans. Like Hanmaeum, SISBRO had strong symbolic meaning—but it couldn’t survive because of political and practical problems.

The Reality of Business with North Korea

In South Korea, public opinion about North Korea is complicated. While many people feel sorry for ordinary North Koreans, they don’t trust the government or see North Korea as a reliable business partner. This makes it hard to sell products made in North Korea.

Also, North Korea’s production systems and product quality are much lower than South Korea’s. Even if products from North Korea are cheaper, many people worry that the quality won’t be good enough.

So if companies want to make North-South cooperation work, they need more than just low prices. They need to focus on peaceful messaging or eco-friendly branding. For example, they can promote the idea that these products are good for the environment and made in a clean, natural area. For now, that might be the best path forward.