The encyclopedia · Strategy & Leadership · Strategic decision · 1970–2018
Samsung's watch division was Korea's #1 — spun off in 1998, it was gone by 2018
Samsung Watch Company dominated Korea's watch market, bought a Swiss manufacturer, then faded to 30 employees and dissolution.
Samsung Watch Company · SWC Corporation · 2018
What happened
Samsung's watch business began in-house during the 1970s, producing watches under the Kappa brand within Samsung Electronics. In June 1983, the division was spun off as Samsung Watch Company (삼성시계), a dedicated subsidiary. SWC formed technical partnerships with Japan's Seiko (1983) and Switzerland's Longines (1985) and produced its own brands including Kappa, Burett, Dolce, and HAAS & CIE. By December 1987 it held the number-one domestic wristwatch market share in South Korea.
SWC expanded globally in the 1990s: it acquired the Swiss case manufacturer PIQUEEREZ in 1995, entered the US market through Tourneau and Sterling in 1997, and bought the 150-year-old Swiss watchmaker HAAS & CIE in the same year. It served as the official time-signal sponsor for MBC TV from the late 1980s through the 1990s — a fixture in Korean daily life.
The 1997 Asian financial crisis hit Samsung's non-core businesses. Lee Kun-hee's 'cars, watches, audio' diversification was reversed; Samsung exited peripheral businesses. In November 1998, Samsung Watch Company was separated from the group and renamed SWC Corporation, an employee-owned entity without the Samsung brand. With no chaebol support, a shrinking watch market, and smartphones replacing the wristwatch, SWC declined. By the 2010s it had about 30 employees. The company was dissolved in 2018. The Kappa brand was sold to Shinyoung Precision, which now produces only wall and table clocks.
Why it happened
- The 1997 Asian financial crisis made Samsung shed non-core businesses — watches were peripheral to its focus on semiconductors, and the spin-off left SWC without the group's capital or brand.
- The mechanical watch market shrank globally as quartz watches commoditised the category and smartphones became the primary timekeeping device, especially in Korea's early-adopter tech culture.
- Without the Samsung brand on its products, SWC lost its primary competitive advantage — Korean consumers had bought Samsung watches for the brand, not for watchmaking heritage.
- Employee ownership after the spin-off provided neither investment capital nor strategic direction, and SWC could not compete with global brands on marketing or distribution as an independent company.
The lesson
A brand that lives on a conglomerate's balance sheet dies when the conglomerate leaves. A watch company without its own brand or capital is a factory — and factories without owners do not survive.
Aftermath
SWC was dissolved in 2018. The Kappa brand name was acquired by Shinyoung Precision for use on wall and table clocks. The former headquarters site in Seongnam was redeveloped. SWC is listed as a defunct Samsung Group former subsidiary, and the case is cited in Korean business history as an example of the chaebol's 1990s diversification reversal.
Sources
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