'Next stop: Amorepacific' as Seoul Metro sells station naming rights

Industry

Published: 25 Jan. 2022, 13:08 Updated: 25 Jan. 2022, 22:34

'Next stop: Amorepacific' as Seoul Metro sells station naming rights

Partial naming rights for Guro Digital Complex station (line No. 2) have been sold to Wonkwang Digital University. [JOONGANG PHOTO]

“This stop is Euljiro 3-ga, Shinhan Card.”

This reworded announcement may well be what you hear on lines No. 2 and 3 subway trains pulling into Euljiro 3-ga Station from March, after Seoul Metro sold partial naming rights to credit card company Shinhan Card.

Euljiro 3-ga isn't the only station getting a rebrand, with Sinyongsan Station on line No. 4 also going to cosmetics company Amorepacific.

Seoul Metro announced on Jan. 12 that it has signed contracts with the two companies to add their names next to the existing station names using parenthesis like this: Euljiro 3-ga (Shinhan Card) and Sinyongsan (Amorepacific). The new names will be used on platform signage, announcements, entrances and exits, and even on the subway maps.

Seoul Metro is receiving 874 million won ($729,000) from Shinhan Card, the largest amount of money it has received from a business to date, while it will get 380 million won from Amorepacific. The subway company is in the process of adding the names and is expected to finish in March.

According to Seoul Metro, selling partial naming rights to subway companies allows it to “make some profits to make up for the growing losses.”

In order to purchase subway naming rights, companies, universities and hospitals must be located within 1 kilometer (0.62 miles) of the station. The contract runs for three years, and companies can only extend it once.

Seoul Metro first started the business in 2016, but stopped signing new contracts after a year after being criticized for misusing public assets. It resumed the business last year due to the subway system's continuous net losses and financial difficulties, the company said.

Last year, the subway company accepted bids for eight stations including Euljiro 4-ga (lines No. 2 and 5), Nowon (lines No. 4 and 7), Naebang (line No. 7) and Yeoksam (line No. 2). As a result, Euljiro 4-ga is now Euljiro 4-ga (BC Card), Yeoksam is now Yeoksam (Centerfield) and Naebang is now Naebang (uJung Art Center).

Seoul Metro said it is likely to make some 2.5 billion won annually from the business. Though the profit is not that dramatic, the company says it is “desperate to make some profit,” as its “net losses have been widening constantly, especially since the Covid-19 outbreak that made passengers more reluctant to go out.”

Seoul Metro generated 1.114 trillion won in net losses in 2020, almost doubling its 586.5 billion won losses the previous year. It is expected to report about a 1.8 trillion won net loss in 2021.

The company also blames fare-dodgers and the subway fee, which has been frozen for seven years, for the mounting losses. Of around 780.7 billion won of net losses in January to October last year, around 29 percent came from fare-dodgers, it said.

“It’s our attempt to make profits when we are reporting continuous losses,” a spokesperson for Seoul Metro told the Korea JoongAng Daily. “Demand is high. Of the 27 companies we made contracts with since in 2016 and 2017, 24 have extended their contracts.”

Banking institutions are especially enthusiastic about the project. The Industrial Bank of Korea in 2016 paid 381 billion won to add its name to Euljiro 1-ga Station. The company extended the contract in 2019 by paying another 430 million won.

In 2017, Standard Chartered Bank Korea spent 295 billion won to add its name to Jonggak Station. The contract was due to expire in 2020, but the company extended it to until July 2023.

“The brand awareness increased by thee percentage points during the two years since we started putting our name on Jonggak Station,” a spokesperson for Standard Chartered Bank Korea said.

A total of 27 subway stations in Seoul now carry business names, with Euljiro 3-ga Station and Sinyongsan Station to be added in March.

Seoul residents have mixed opinions about the rebranded names.

“During rush hour, especially in the morning, the subway is so crowded with commuters and sometimes it is very difficult to hear the announcement that tells each stop,” Mrs. Bae, 27, told the Korea JoongAng Daily. “I work near Sinyongsan Station and the longer station name will help me hear it. It’s not like the name will be replaced completely, so I think it's a pretty good way to cover the one-trillion-plus loss.”

However, 51-year-old Lee Moon-hui, a resident of Jung District, central Seoul, says it is a misuse of public assets.

“Euljiro 3-ga Station has a long history for me, since I’ve been living this area since I was young,” Lee said. “I’m surprised that it has been sold for less than 900 million won.”

“I'm concerned this kind of project will just turn subway stations into tools for corporate promotion.”