If you’ve been an enthusiastic fan of Korean entertainment, then you must have heard of the latest controversy involving actor Kim Soo Hyun. Now that the controversy is escalating to the point of no return, Korean brands have started to distance themselves with Kim Soo Hyun, the once-most-expensive actor in South Korea, including Shinhan Financial Group.
Now that Shinhan Financial Group have decided to cut ties with Kim Soo Hyun, let’s take a look at this case from a different perspective. How does Korean celebrity endorsement play part in K-branding? And how Korean brands can possibly future-proof their strategies? Let’s dive deep into the discussion below.
Shinhan Financial Group Parts Ways with Kim Soo Hyun Amid Controversy
With the escalating controversy surrounding actor Kim Soo Hyun, Shinhan Financial Group has joined the club with a swift crisis management countermeasure. Following Cuckoo Korea, which terminated its contract with Kim Soo Hyun after the shortest endorsement span ever of 17 days, one of big 5 banks in South Korea, Shinhan Financial Group has also decided to part ways with the actor.
On March 27, 2025, an industry insider with close ties to Shinhan Financial Group revealed that while the company still had a few months remaining for the contract, a renewal would be highly unlikely.
Previously, Shinhan Financial Group Korea had signed a contract with Kim Soo Hyun for Premier Wealth Management Services in July 2024. Knowing that model contracts are typically one-year agreements, his contract is set to expire in July of 2025.
After the Kim Soo Hyun underage dating controversy started, Shinhan Financial Group made an impressively swift move of removing advertisements and images, distancing itself from the actor. But at the same time, the company also maintained its loyalty image with an official stance of “monitoring the situation.”
However, once the issue has escalated to the point of no return, this top tier financial group of South Korea took decisive action. The company then started removing advertising videos involving Kim Soo Hyun. They have also sent widespread message that “customers’ trust is the top priority.”
That is why speculations are growing that Shinhan Financial Group has decided to cut ties entirely with Kim Soo Hyun. And amid such a massive controversy, this move is actually the best and most ideal solution for crisis management action in K-branding.
Celebrity Endorsements Play Massive Role in K-Branding
Celebrity endorsements are at the heart of South Korean branding strategies. They play a crucial role in shaping consumer perception, brand credibility, and market influence.
Unlike Western markets, where celebrity endorsements are often limited to luxury or lifestyle sectors, South Korea sees them embedded in nearly every industry, from banking and technology to food and fashion.
The Cultural Significance of Celebrity Branding in Korea
South Korea’s collectivist culture fosters a deep emotional connection between the public and celebrities. This then makes celebrity endorsements work impressively effective in South Korean market.
According to Hofstede’s cultural framework, South Korea exhibits high uncertainty avoidance. It means that Korean consumers prefer familiar, trusted figures when making purchasing decisions. This is why brands seek celebrity figures that resonate with their audience’s aspirations and lifestyle choices.
Furthermore, the omnipresence of celebrity branding can be seen in the sheer volume of endorsements.
Studies show that nearly 60% of prime-time Korean commercials feature celebrity endorsers, compared to significantly lower numbers in Western markets. Walk through Seoul’s shopping districts like Myeongdong or Gangnam, and you’ll find giant billboards of K-pop idols and actors promoting everything from credit cards, cosmetics, to even soju and beers.
How Celebrity Endorsements Influence Consumer Behavior
The effectiveness of celebrity endorsements in South Korea stems from several key psychological and marketing principles:
Brand Awareness & Attention
Celebrities command instant attention, helping brands stand out in an oversaturated market. A prime example is Woongjin Coway, which saw a 400% increase in sales after partnering with Girls’ Generation in 2011.
Trust & Credibility
Consumers also view endorsements from beloved figures as a seal of approval. When BTS’s V endorsed Compose Coffee, the brand’s app user base skyrocketed from 9.3 million to 12 million in just 10 days.
Emotional Connection
Moreover, South Korea’s fandom culture means that fans connection with the celebrities extends beyond admiration. Instead, they tend to feel closer, forming a personal bond with them.
When BLACKPINK collaborated with Starbucks, their exclusive merchandise and themed drinks sold out online within three hours across Asia.
Cultural Meaning Transfer
Hence, according to McCracken’s meaning transfer model, celebrities pass their image, values, and aspirational qualities onto the brand.
For example, luxury brands like Celine with BLACKPINK’s Lisa or Dior with Jisoo leverage K-pop idols to attract younger, style-conscious consumers.
Shinhan Financial Group Cutting Ties with Kim Soo Hyun: Ideal Solution for Crisis Management
With the celebrity transferring their image and value onto the brand, this also come with significant risks. It means that when the endorser becomes entangled in controversy, brands that align themselves too closely with a public figure run the risk of being caught in a reputational crisis when the celebrity’s image takes a hit.
That is why the decision from Shinhan Financial Group to cut ties with Kim Soo Hyun was a textbook example of swift and effective crisis management. In industries like finance, where trust is paramount, any affiliation with a scandal-ridden figure could damage the company’s credibility.
Key Crisis Management Lessons from Shinhan’s Response
Here’s how we can learn from Shinhan Financial Group Korea from its crisis management response to Kim Soo Hyun controversy.
Swift Damage Control
By quickly removing Kim Soo Hyun’s advertisements and images, Shinhan sent a strong message that it prioritizes consumer trust. This move aligns with past industry examples where companies swiftly distanced themselves from celebrities amid controversy.
Balancing Brand Loyalty and Public Sentiment
Initially, Shinhan Financial maintained a neutral stance, stating that they were monitoring the situation. This allowed them to assess public reaction before making a final decision, avoiding knee-jerk responses.
Reaffirming Brand Values
By emphasizing that “customer trust is the top priority,” Shinhan reaffirmed its commitment to corporate integrity, reassuring stakeholders and consumers alike.
Understanding the Cost of Inaction
History has shown that brands that fail to act decisively in the wake of scandals suffer long-term reputation damage. Companies like Nike have faced backlash for continuing controversial endorsements, leading to consumer boycotts.
If the Controversy is Proven False – How This Affects the Bank’s Decision
A critical risk in crisis management is acting too hastily before all facts are verified. What happens if Kim Soo Hyun is later proven innocent? Would Shinhan Financial Group regret its decision?
In the rare case that the controversy turns out to be false, the bank would face a different kind of reputational challenge—dealing with consumer perception of fairness and loyalty. Some key potential consequences include:
Public Sympathy Toward Kim Soo Hyun
If the allegations were debunked, fans might rally behind him, leading to public criticism of brands that dropped him too soon. This was seen when actor Kim Seon Ho faced career setbacks due to an ex-girlfriend’s accusations, only for the claims to later be discredited.
Loss of Consumer Trust in the Brand’s Decision-Making
Consumers value brands that stand by their ambassadors through difficult times—but only when they are confident in their innocence. If Shinhan acted prematurely, some consumers might question whether the company is too reactive.
Missed Marketing Opportunities
If Kim Soo Hyun successfully clears his name, other brands may capitalize on his redemption arc, signing him for new endorsements while Shinhan Financial misses out on potential goodwill.
Ultimately, Korean brands must strike a delicate balance between protecting corporate reputation and avoiding unnecessary brand damage from unverified claims.
This is why many companies wait until a controversy reaches an irreversible point before making final decisions.
How Korean Brands Can Possibly Future-Proof Its Strategy
With the volatile nature of celebrity endorsements, how can South Korean brands future-proof their marketing strategies while still leveraging the immense power of star power?
Incorporate Morality Clauses in Contracts
Many brands now include “morality clauses” that allow them to sever ties with an endorser if they become involved in a scandal. These clauses help brands protect themselves from reputational fallout.
Diversify Marketing Strategies
Instead of relying solely on celebrity power, companies should invest in long-term brand storytelling and consumer engagement strategies.
Some brands are shifting towards AI and virtual influencers—like Samsung’s NEON avatars—which eliminate the risk of human scandals.
Carefully Vet Celebrity Partners
Brands should conduct rigorous background checks and monitor public sentiment before signing a major endorsement deal. This is particularly important in industries where consumer trust is paramount, such as finance, healthcare, and education.
Leverage Social Media & Micro-Influencers
While mega-stars like BTS or BLACKPINK dominate endorsements, some brands are now turning to micro-influencers for more authentic, grassroots marketing. These influencers have smaller but highly engaged followings, reducing the risk of major scandals impacting the brand.
Adopt a Flexible Endorsement Model
Instead of long-term, exclusive deals, brands can opt for shorter endorsement contracts, allowing them to assess the celebrity’s marketability and reputation over time.
Shinhan Financial Group: Crucial Lesson in Kim Soo Hyun Controversy
Shinhan Financial Group’s decision to cut ties with Kim Soo Hyun serves as an important case study in crisis management and K-branding strategies. While celebrity endorsements remain a powerful tool for South Korean brands, the risks that come with them require a well-calibrated risk management approach.
By carefully selecting brand ambassadors, implementing morality clauses, and diversifying marketing efforts, Korean brands can continue to leverage the global influence of K-celebrities—while ensuring that their reputation remains intact.
In today’s digital age, where social media can turn a small issue into a major controversy overnight, brands that plan ahead and adapt quickly will stay strong, while others may struggle to keep up.
Don’t you think so too? Please share your thoughts in the comments.
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