September 15, 2018 08:25
Korea's changing work landscape has wrought some notable changes in the world of small businesses, with recreational start-ups enjoying a boom as working hours are reduced while convenience stores have trouble paying the rising minimum wage.
According to KB Kookmin Card, 799 recreational or hobby-related start-ups opened in the first half of this year, a 4.6-fold jump from two years ago.
The most popular new start-ups were businesses catering to leisure activities. Video and game rooms made up the biggest proportion of start-ups that opened in the first half, soaring 90.5 percent and 79.8 percent from the same period of 2016, followed by bars (up 67.8 percent) and fast-food restaurants (up 63.4 percent).
A KB Kookmin staffer said, "Leisure time has increased due to the shortened working week, leading to changes in the pattern of start-ups. We will continue to see a rise in openings of businesses catering to hobbies and leisure activities next year."
But profitability is expected to deteriorate amid tight competition. Average per-store credit card spending in the first half fell 41.8 percent compared to two years ago, from W1.1 million to W587,392 (US$1=W1,118). Per-store spending at leisure and hobby-related businesses dropped 21.8 percent to W2.26 million.
Korean restaurants ranked first among the 216,663 new stores that opened this year at 13.3 percent. Second were coffee shops (10,626), bars (10,300), clothing stores (7,284) and cosmetics shops (7,187). Restaurants selling Western food, Chinese food and fried chicken accounted for one-third of new restaurants.
But the total number of new start-ups has been declining over the past three years, from 218,778 in 2017 to 216,663 this year.
Convenience stores saw the largest number of closures because many could not afford the minimum wage hike. Some 2,965 convenience stores shut down in the first half, up 48.1 percent from two years ago. Closures of florists were up 45.4 percent compared to 2016, of coffee shops 43.7 percent, billiard halls 35.3 percent and skin aesthetic shops 35.2 percent.
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