Soju is out and sport is in as society shiftsRecent social shifts in Korea are affecting local businesses, a government report shows.
According to a Monday report from the National Tax Service (NTS) that outlined changes in 100 major business areas, many sectors expanded or shrunk due to changes in consumption patterns caused by socioeconomic shifts.
The report indicates that people have started spending more on sports, health and beauty due to steady increases in average life expectancy and quality of life. According to the World Bank, the average life expectancy at birth in Korea was 82.02 years in 2016, up from 80.87 in 2012. The country recently achieved the milestone of a per-capita income of $30,000.
According to the NTS report, the number of sports facilities increased by 203.2 percent between September 2014 and September 2018. The number of skin care businesses and fitness clubs also increased by 82.8 percent and 51.1 percent, respectively.
The statistics indicate that people have been spending more on hobbies. The report showed that the number of rental cottages and guesthouses increased by 130.4 percent. The number of bike stores, sports education companies and travel agencies also saw significant increases during the same period.
The government’s push to reduce the number of smokers impacted the number of cigarette stores, which declined from 19,178 to 13,790 in four years. A fall in the number of work dinners led to a 19.3 percent decrease in street food carts and a 14.9 percent decrease in the number of pubs.
The increase in the number of single-person households, in turn, caused more people to invest in their pets. According to Statistics Korea, the number of single-person households was 5.6 million in 2017, up from 2.2 million in 2000. Compared to September 2014, there was a 102.6 percent increase in the number of pet stores and a 16 percent increase in the number of veterinary clinics in September 2018. The number of fast food restaurants increased by 29.6 percent and convenience stores by 43.3 percent.
Experts believe more businesses for single-person households will emerge in coming years. According to the Korea Institute for Industrial Economics & Trade, the total consumption of single-person households is projected to surpass that of four-people households by 16 trillion won ($14.1 billion) in 2030 and account for 20 percent of total household consumption.
Advances in information technology are also reshaping the country’s business trends. As more people shop online, the number of mail-order businesses saw a 46.3 percent increase in four years, a sharp contrast to the decrease in the number of traditional offline stores like clothing shops, shoe stores and stationery stores in the same period. Although the number of home appliance stores decreased since 2014, that of home appliance repair stores saw a 68.68 percent increase.
Korea’s declining marriage rate has also played a role in causing the decline of marriage-related businesses. The number of wedding halls saw a 17.5 percent decrease and the number of marriage counseling services fell 11.9 percent, the NTS report shows.
The number of obstetrics and gynecology clinics decreased 3.1 percent. Experts believe the number of women visiting such clinics has decreased due to declining marriage and birthrates. In contrast, the number of neuropsychiatry clinics increased by 25.8 percent as more people are stressed from intensifying social competition and conflicts.
The challenging business climate for corporations is credited with causing a 31.6 percent decrease in the number of cafeterias. Around 11,000 closed during the four years measured in the report. Experts believe the decrease came as many companies closed their in-house cafeterias and dining halls to minimize operation costs.
Some businesses have taken the place of others. The number of outdoor driving ranges shrunk 30.1 percent while the number of indoor driving ranges increased by 63.1 percent. The number of hair salons increased by 17.9 percent while that of traditional barber shops declined by 8.7 percent.
As finding jobs has become more difficult, many people have chosen to become licensed practitioners in the search for a stable income and job security. According to government statistics, the total number of unemployed stood at a little over 1.22 million in January, up 204,000 from a year ago and the highest reading after 1.23 million in 2000. The number of certified labor consultants increased by 82.8 percent, followed by 35.3 percent for lawyers, 31.6 percent for engineers and 31.3 percent for architects.
“Shifts in social trends like the low birthrate are changing consumption patterns, affecting many business areas,” said Jung Yeon-sung, vice president of the Korea Distribution Association and a business administration professor at Dankook University.
“As more and more young people look for more unique and meaningful ways to spend their money and start driving the overall consumption trend, the changes we see today are projected to intensify and broaden.”
BY SOHN HAE-YOUNG, KO JUN-TAE [email@example.com]