Korea’s shrinking retail ranks

South Korea’s online boom has been blamed for a significant decline in the number of bricks and mortar retailers in the nation.

According to data compiled by the Statistics Korea and from the National Tax Service, there were 34,000 fewer retailers operating this last year compared to 12 months earlier.

The total number was down from 806,000 to 772,000 – a decline of about four per cent.

The government agencies define “active companies” as those who have sales or employees for at least one year.

Analysts in South Korea say the decline may be due to a nationwide economic slowdown, arguing retailing is an easy business to open and close for individuals and families.

But they agree the more likely cause is consumer shift from bricks and mortar stores to the convenience of shopping online, on laptops and smartphones.

Another sector hit hard was “PC rooms” – where people play games online, or use internet and email services. Some 7000 of those businesses closed last year, and about 60 per cent have closed within the last five years.

And 600 service businesses in the finance and insurance sector closed, again as their customers moved online to transact.

“Service businesses led by offline businesses have had a declining trend and most of the businesses are vulnerable to economic slowdown because they are sensitive to economic ups and downs,” said an official from Statistics Korea.

The bar, cafe and restaurant sector also struggled, with 500 restaurants closing and 14,000 recording nil sales, suggesting they have been shuttered.

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