SEOUL, SOUTH KOREA, February 22, 2021 – The Seoul Metropolitan Government analyzed the changes in revenue at the stores of 62 types of business located in Seoul for 51 weeks from January 6 to December 27, 2020, based on the revenue of affiliate merchants of Shinhan Card.
According to the analysis, those stores’ revenue was decreased by around KRW 9 trillion (9%) to KRW 91 trillion. However, from late May to early June, the revenue was increased over the same period in the previous year due to the holidays, such as Labor Day and Children’s Day, and the provision of the government’s emergency disaster relief funds.
In terms of business type, the Korean food restaurants showed the most significant decline in their revenue by 18.2%, about KRW 2.59 trillion, followed by other restaurant businesses, private academies, and fashion/clothing industries.
In terms of the rate of decline, duty-free stores presented the largest reduction rate, about 82.4%. Also, travel agencies, leisure facilities, clubs, and bars recorded a 50% or above reduction rate in their revenue.
The ten business types with a high revenue cut as above – including the five business types with a high decrease in revenue amount (Korean food restaurants, other restaurant businesses, private academies, fashion/clothing industries, and western restaurants) and the other five business types with the largest reduction rate of revenue (duty-free stores, travel agencies, leisure facilities, and clubs and bars) – recorded an accumulated decrease in revenue. The decrease rate of revenue showed a repeat pattern in which the rate was increased when COVID19 picked up a pace, and the social distancing policies were strengthened while it was somewhat
decreased when these policies were eased out. In particular, the club and bar industry recorded an over 90% decrease y-o-y in revenue longer than other industries because the clubs and bars were required to comply with limited business hours, longer than the other industries.
Meanwhile, the credit card consumption by Shinhan Card holders living in Seoul amounted to about KRW 116 trillion, a 2.9% (KRW 3.5 trillion) drop y-o-y. The Korean food restaurants showed the biggest decline in credit card consumption, 16.5% down (KRW 1.6 trillion), followed by airlines, distribution, restaurants, and gas stations.
Especially, the three travel-related industries, including travel agencies (83.7%), airlines (73.4%), and duty-free stores (69.7%), recorded the largest rate of consumption reduction from the previous year due to limited international travel. On the other hand, the online transaction showed the largest increase both in the amount increase (about KRW 2.7 trillion) and the rate increase (29.1%). In addition, the consumption of food and beverage through outlets/supermarkets, butcher’s shops, and agro-fishery markets was also increased due to a decrease in outdoor activities and eat-out.
In credit card consumption, online consumption was increased by about KRW 3.9 trillion (18.4%) while the offline consumption was decreased by about KRW 7.4 trillion (7.5%) in contrast.
People in their 50s showed the largest increase rate of online consumption, a 22.3% up from the previous year. Those in their 60s and 70s and over recorded an increase both in the online and offline consumption. Especially, the elderly population, who had showed a relatively small portion of online consumption, recorded an over 17% increase in the online consumption. This figure implies that the COVID-19 pandemic made the senior citizens get used to the online
Seo Wang-jin, President of the Seoul Institute, said, “Over the last year since the outbreak of COVID-19, small business owners have been increasingly struggling with their business as the stores located in Seoul have recorded a large decrease in the revenue. Meanwhile, more and more citizens seem to get familiar with the contactless and online consumption due to decreasing outdoor activities. The Seoul Institute will continue its research effort to find ways to
facilitate the city’s economy in the post-COVID-19 era and design the supportive measures for the small business owners struggling with the spread of the pandemic.”
“We had simply thought that the consumption in general was decreased due to COVID-19, however, the data analysis showed COVID-19 has caused different level of damage by area and business type. As the online transaction has becomes a new channel of consumption as well, we need to come up with data-driven policies with more details in response to the post-COVID-19 era,” said Lee Won-mok, Director-General of Seoul’s Smart City Policy.