‘Unprecedented’ South Korean boycott damaging Japan’s retailers, manufacturers
Having now run for more than 100 days, the scale and impact of the South Korean boycott movement against Japanese products is unprecedented.
It is costing retailers, importers, airlines and travel companies millions of dollars as a largely voluntary group of consumers rally citizens to their cause, popularised by its slogan ‘I Will Not Buy, I Will Not Go, and I Will Not Wear”.
The South Korean boycott is rooted in discord between the two countries dating back to Japan’s colonial occupation of the Korean Peninsula before and during the Second World War and controversy over forced labour and sexual slavery. It expanded into a diplomatic crisis in July after Japan threatened to throttle exports of materials essential to South Korean industries.
Prior to July, Japan was South Korea’s largest source of imports by value. Shortly after the boycott began, its ranking fell to third in July and to 13th in August. Last month it fell to 28th.
Emforce, a South Korean digital marketing firm, has reported that the word ‘boycott’ appeared 1.18 million times on social-media networks this year, which was 10 times the size of the previous boycott movement following Japan’s celebration of Takeshima Day in 2013.
Japanese retailer Uniqlo is a prime example of the impact of the ‘I Will Not Wear’ boycott movement. Uniqlo has closed four Uniqlo stores since July and the number of people visiting stores which remained open has plummeted.
According to records from eight credit-card companies, Uniqlo sales plunged by 70.1 per cent to 1.77 billion won (US$1.49 million) in the fourth week of July from 5.94 billion won ($5 million) in the last week of June.
However, amid the decrease in brick-and-mortar store sales, there is a sign of consumption picking up at Uniqlo’s online mall, with its popular winter products, heat-retaining underwear called Heattech and light-weight padded jackets selling out.
Uniqlo is still expected to experience mixed fortunes in Korea this winter, as social media is still awash with messages urging users not to buy Japanese products and support the boycott.
According to the Emforce analysis, among some 1.28 million posts on Twitter related to the boycott movement between July and August, 93.3 per cent were retweets, and 6.7 per cent were new posts. While retweets still account for the majority, there were 85,000 new posts about the boycott movement between July and August, which was eight times more than the total number of relevant tweets posted in the entire year of 2013.
“It shows the scale of the movement and how each participant is taking deep interest in the matter from various standpoints,” said the report.
“Netizens retweeted posts made not by the media or civil groups, but by other netizens advancing their own opinions and sharing the boycott list of Japanese products.”
Data Lab, Line parent Naver Corp’s big-data platform, reported a decrease in the number of clicks on Japanese products throughout almost all sectors at online shopping malls.
“The initial drive that’s been leading the movement is weakening. Nevertheless, it is now being replaced with a collective habit of rejecting Japanese products since more consumers are less inclined to buy due to the bad economy,” Data Lab said.
“The aftereffects of the movement are expected to continue.”
While some South Koreans are still purchasing Japanese products, the voluntary participation of the public still leaves little room for Japanese companies, according to Korea Bizwire.
Japanese beer has all but disappeared from store shelves, with the Korea Customs Service, reporting just $6000 worth of Japanese beer crossed the border in September.
The South Korean boycott of travel to Japan has also sent shockwaves through the Japanese economy. Passengers on flights bound for Japan dropped 30 per cent in September from a year earlier during the Chuseok holiday season, the peak travel season.
According to the Korea Economic Research Institute, there was a 27.6-per-cent drop in the number of South Korean tourists visiting Japan in July-August which cost the Japanese economy an estimated US$292 million.
The October reservation rate also dropped and despite a reduction in the number of flights, occupancy was just 60 per cent on those still scheduled.
- Edited by Robert Stockdill. Original reporting by MH Lee and DM Park of Korea Bizwire.