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  • Seoul Metropolitan Government using big data to identify risk of starting businesses in 1,008 neighborhood business areas of Seoul

  • Economy & Investment News SMG 4006


    Using big data, Seoul Metropolitan Government will analyze the performance of small businesses located in a number of neighborhood business areas in Seoul and display the results on a map to serve as a reference for small business entrepreneurs interested in starting a business in those neighborhoods. Through the city’s pilot project, “Our Village Store Business Trend Analysis Service (golmok.seoul.go.kr),” citizens will be provided easy access to a wide range of information the city’s neighborhood business areas, allowing them to review the risk of starting a new business in a certain area at the click of a button.

    To this end, the city designated a total of 1,008 neighborhood business areas, including backstreet areas where large distribution facilities are not present, as the “Seoul-type Local Commercial Zone” and analyzed 200 billion big data items generated by businesses of 43 types, such as Chinese restaurants and convenience stores, in those locations.

    Also, the city government analyzed 200 billion big data items in 32 areas of 10 sectors, including administrative data, such as licenses and permits issued by public institutions, and transportation card data, as well as private sector data, such as retail sales and housing rental costs, all of which were provided by Shinhan Card, BC Card, and the Korea Appraisal Board.

    The 43 types of small businesses in Seoul’s neighborhood business areas can be categorized more generally into three categories: restaurants (10), service businesses (22), and wholesale and retail businesses (11). Most new businesses or existing small businesses are represented by these three categories, as shown by the 2013 Map of Small Businesses of Seoul by Category published by Seoul Metropolitan Government and the Seoul Credit Guarantee Foundation.

    Three types of services will be offered through the project: ① Business Area Traffic Light Service (for new prospective entrepreneurs); ② Custom-tailored Business Area Portal Service (for prospective entrepreneurs); and ③ My Store Marketing Service (for existing businesses).

    First, the “Business Area Traffic Light Service” will indicate that status of a certain neighborhood business area, including the levels of risk involved in starting new businesses, indicated in four colors (blue for caution, yellow for doubt, orange for risky, red for highly risky) and based on quarterly data; the rate of business closure; the rate of closure of businesses three years after opening; the average time before business closure; and variations in the number of stores.

    Second, the “Custom-tailored Business Area Portal Service” enables prospective entrepreneurs to access a wide variety of information, such as the number of stores, average sales per store, average daily visitors, new business survival rate, and market saturation index for each of the 1,008 neighborhood business areas.

    Third, the “My Store Marketing Service” enables users to select a specific business area (with a radius of 100 to 1,000 meters) on a map, including areas not contained within the 1,008 neighborhood business areas, and obtain specific information on that area, including sex and age of visitors, specific times and places most frequented by visitors, presence of venues for mass gatherings, and the number of households in apartment housing complexes. In addition, analysis reports will be sent to business owners by mail on a regular basis to help them understand how their neighborhoods are changing. Moreover, social networking services, blogs, and keyword searches related to small neighborhood businesses will be analyzed by theme so that business owners will be able to keep up with the latest trends and consumer preferences on a real time basis.

    Seoul Metropolitan Government will launch the “Our Village Store Business Trend Analysis” service on December 1, 2015, and anyone interested may register on the Seoul Metropolitan Government website, which provides free access to the service.