The upside of hunkering down

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The upside of hunkering down

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A Baedal Minjok delivery worker places products in the box of a motorcycle on Wednesday at the unit’s delivery center in Gangnam District, southern Seoul. [NEWS1]

Park Jin-ah, a 30-year-old woman living in Mapo District, western Seoul, has recently adopted a new way of living as the Wuhan coronavirus threatens Korea: cocooning at home.

“I arrange my daily schedule to minimize human contact and head straight to my house from work, which I think is the shell of safety in times like this,” said Park, who works as an elementary school teacher.

“I stored up masks, hand sanitizers, groceries and all other basic necessities from online malls and use delivery services if I have urgent things to buy or for food,” she said.

Park is one of many in Korea adopting an insulated lifestyle to minimize the risk of possible infection.

The trend directly impacts a wide range of industries, helping e-commerce players, logistics companies and even paper makers, which make packaging boxes. At the same time, the tendency to stay at home deals a huge blow to retail shops, restaurants, cinemas and cosmetic surgery hospitals catering to Chinese tourists.

Food delivery service operators are experiencing a boom in the number of orders as more people are disinclined to dine out.

Baedal Minjok, Korea’s biggest food delivery app, said on Wednesday that the number of orders rose 11.3 percent to 4.93 million between Jan. 31 and Feb. 2, from 4.43 million a month earlier when no infection case existed in Korea.

Yogiyo, the second-largest food ordering app, reported an 18 percent increase during the same period.

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The records don’t show a significant difference on the weekdays, but on the weekends, the growth in the number of orders is more obvious, according to Baedal Minjok.

Major e-commerce operators, including Coupang and WeMakePrice, reported surges in sales, declaring states of emergency to deal with the increasing orders.

WeMakePrice said that the transactions of its daily necessaries category jumped more than three times between Jan. 31 and Feb. 3 compared to the same period last year.

The number of orders for Coupang’s “rocket delivery” hit 3.3 million on Jan. 28, an all-time high and double the volume compared to the same day a year earlier.

“The outbreak has triggered the rise in sales in the e-commerce sector,” said Oh Rin-a, an analyst at eBest Investment & Securities.

“Brick-and-mortar retail shops have faced a decline in sales and number of customers,” she continued, “With the rise of online and mobile shopping, logistics companies like CJ Logistics will enjoy higher demand for their parcel services.”

The stock price of CJ Logistics, Korea’s largest logistics company, gained 1.06 percent on Wednesday. Producers of parcel boxes and papers - Tailim Paper and Moorim Paper - advanced more than 1 percent.

The Kospi rose 0.36 percent on Wednesday.

Cho Yong-sun, an analyst at SK Securities, noted that the Wuhan outbreak wiped out 1.3 trillion won ($1 billion) of equity value for Kospi retail stocks since the beginning of the year.

“In the recent month, the stock prices of Hotel Shilla dropped 5.3 percent, with Shinsegae falling 8 percent and Hyundai Department Store losing 8.6 percent,” Cho said.

Duty-free shops were hit hard by the outbreak of the virus originating from central China as duty-free sales are heavily dependent on Chinese tourists.

Shilla Duty Free and Lotte Duty Free shut down some of their stores starting Feb. 2 but plan to reopen on Friday.

“As the duty-free industry is closely linked with Chinese visitors, a short-term impact on sales is inevitable,” said Joo Young-hoon, an analyst at Eugene Investment & Securities.

“About 70 percent of sales at local duty-free shops come from Chinese tourists and merchants,” the analyst said.

The number of surgeries at cosmetic clinics has fallen.

As many of the clinics are dependent on Chinese tourists on medical tours to Korea, their incomes are starting to decline as they did during the Middle East respiratory syndrome outbreak.

One cosmetic surgery clinic near Gangnam Station in southern Seoul said half of its scheduled surgeries for February were canceled due to fewer Chinese tourists flying to Korea.

“For those of us who depended a lot on highly-priced surgeries usually scheduled by Chinese customers, the outbreak is disrupting our schedules,” a head surgeon of the cosmetic surgery clinic said.

“We can’t even hope to fill our schedule with customers from other countries, as tourism itself is losing steam.”

Some cosmetic clinic sources added that the decline may continue for months, as it takes quite a while for the demand for medical tourism to recover.

Korean consumers are less inclined to undergo expensive surgeries.

BY PARK EUN-JEE, KO JUN-TAE [park.eunjee@joongang.co.kr]

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