Even Hongdae Hesitates... Cafe Sales Decline Due to COVID-19 and Gentrification
[Asia Economy Reporter Onyu Lim] The commercial district around Hongik University in Mapo-gu, Seoul, is shrinking due to gentrification and the impact of the novel coronavirus disease (COVID-19).
According to the Commercial Information Research Institute on the 23rd, the estimated average monthly sales of cafes in the Hongdae commercial district in February were 12.72 million KRW. This is a decrease of 3.28 million KRW compared to 16 million KRW in the previous month. The average monthly sales of Hongdae cafes have been steadily declining. Although seasonal factors such as Christmas should be considered, the figure for December last year was 19.8 million KRW.
This is analyzed to be due to the intensification of gentrification, a hollowing-out phenomenon caused by soaring rents, as well as the impact of the spread of COVID-19.
Researcher Hyuntaek Jo of the Commercial Information Research Institute explained, "The Hongdae commercial district has experienced gentrification, weakening the unique characteristics of the area compared to the past, but the atmosphere is still good as many young people visit. However, relatively high rents and key money are set, making it difficult for small-capital self-employed business owners to enter the market, and it is not hard to find stores that have closed due to a decrease in visitors caused by COVID-19."
Meanwhile, an analysis of the Hongdae commercial district by the Commercial Information Research Institute using SK Telecom's big data service platform GeoVision showed that the average daily floating population as of February was 244,045 people. This means that approximately 7.32 million people visit the Hongdae commercial district monthly.
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The age group with the highest visit proportion was people in their 20s, accounting for 26.9% of the total floating population. This was followed by ▲30s (22%) ▲40s (17.4%) ▲60 and older (15.4%) ▲50s (14.2%) ▲teens (4.1%) in order.
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