Fewer babies, aging population cause many business owners to pivot

A wedding hall in the southwestern city of Gwangju [YONHAP]

Low birth rates and the aging population are changing the topography of self-employed businesses. Sectors that target relatively young populations are declining while those targeting older populations are on the rise.

There were 750 wedding halls in Korea last year, according to statistics by the National Tax Service on Thursday. This is 33, or 4.2 percent, fewer wedding halls than 2021 and 140, or 15.7 percent, fewer than 2019. The downward trend stems from fewer marriages, with 191,697 couples getting married last year, down 41.4 percent from a decade ago.

“The number of weddings dropped in general, and the profit from the buffet [in the wedding hall] is down by half because fewer people attend the events,” said Jung, a 59-year-old who runs a wedding hall in Seoul. Jung used to run three such wedding halls in the past.

Businesses such as PC bang (internet cafes), study cafes and noraebang (singing rooms) that target young customers are also going out of business.

There were 8,485 PC bang in December, down 780 on year and 200 fewer than November.

“Around half of all PC bang in the neighborhood went out of business,” said a 42-year-old surnamed Kim, who runs a PC bang in Dobong District, northern Seoul. “I can almost feel less and less customers visiting every day.”

The number of study cafes decreased by 1,171 over the same period, and noraebang by 513. The drop rate for study cafes, at 12.6 percent, was the highest among the top 100 business sectors.

In contrast, more gyms and screen golf centers or simulated indoor golf ranges opened. At the end of last year, there were 1,707 more gyms, up 17 percent, and 1,343 more screen golf centers, up 21.1 percent, as more people became keen on improving their health.

Funeral halls are booming as well. There were two times more funeral halls in 2021 than in 2002, according to the Korea Funeral Association.

“It’s usually difficult for funeral halls to grow in number because there are many hurdles to overcome, like gaining the residents’ consent,” said Choi Min-ho, the association’s secretary general. “Funeral and crematory facilities are especially high in demand in highly populated areas like Seoul, Busan and Gyeonggi.”

Last year, 249,031 babies were born, reaching an all-time low according to Statistics Korea. The number of deaths hit an all-time high at 372,826, leading to an overall drop of 123,795 in the population — more than double the decrease of 57,118 the previous year.

Other industries are also impacted by plummeting birth rates and the aging trend.

According to Kyung Hee University’s gerontology research lab New Aging Center, Maeil Dairies switched some of its powdered milk production lines to produce health products for adults. KB Insurance entered the nursing business in 2019, establishing a nursing home company KB Golden Life Care, and so-called “senior beauty” targeting the prevention of skin aging is a hit in the cosmetics industry.

The center estimates that the “silver economy” — the market for the elderly — grew from 27.4 trillion won ($21.1 billion) in 2012 to 72.8 trillion in 2020 and will be 168 trillion in 2030.

“Many daycare centers are seeking consulting on changing into nursing homes because the two are similar in character, taking care of those [who need assistance],” Kim Young-sun, a gerontology professor at Kyung Hee University Graduate School of East-West Medical Science, said.

Kim added that as demographics change, traditional consumer industries will shrink, and industries that are closely related to the aging population like health, finance and leisure will grow.

BY JEONG JIN-HO [sohn.dongjoo@joongang.co.kr]