[Report] "Disaster Relief Fund Effect? People in Their 20s and 30s Don't Come Here" Hongdae 'Empty'

Merchants in Hongdae Entertainment District, Mapo-gu, Seoul Say "Disaster Relief Fund Effect Is Limited"
Major Consumers Are in Their 20s and 30s... Disaster Relief Fund Consumption Patterns Miss the Mark
Nearby Merchants Sigh, "Signs of COVID-19 Recovery Still Far Away"

Afternoon of the 9th near a busy street in Hongdae. The pedestrian traffic is so sparse it can be counted on one hand. Local merchants nearby complained that their sales have dropped significantly due to the impact of COVID-19 and other factors. Photo by Heo Midam damdam@asiae.co.kr

[Asia Economy reporters Han Seung-gon and Heo Mi-dam] "Who uses the emergency relief funds here? Everyone just eats out and goes to the supermarket..."

On the afternoon of the 9th, merchants near Hongik University in Mapo-gu, Seoul, complained that they could hardly feel the effects of the emergency disaster relief funds recently implemented by the government. The commercial area around Hongdae is filled with clothing stores, accessory shops, and bars, making it unsuitable for spending the relief funds.

In this situation, the floating population that mainly visits this area consists of young people in their 20s and 30s, who are not the household heads eligible to use the relief funds, so merchants here say the actual effect of the funds is minimal.

Lee (58), who has been running a clothing store near Hongdae Entrance Station for six years, lamented, "Sales have dropped by more than 90% since COVID-19. This year is really the hardest." He added, "Some customers buy clothes with the emergency relief funds, but it’s not enough to recover sales."

Meanwhile, a woman in her 20s who has been working part-time for a year at a complex store selling accessories, clothing, and cosmetics said, "The number of customers has drastically decreased, and there are few customers spending with the relief funds." She added, "However, the crowd on the streets seems to have increased slightly since the relief funds were implemented."

Afternoon of the 9th, a busy area near Hongdae in Mapo-gu, Seoul. It shows a quiet scene due to the impact of the novel coronavirus and other factors. Photo by Seunggon Han hsg@asiae.co.kr

Kim (30s), a self-employed clothing store owner near a busy alley close to the entertainment district, said, "Some stores have gotten a bit better thanks to the emergency relief funds, but from what I hear, it’s just a temporary sales spike." He lamented, "The biggest problem is the impact of COVID-19. You can hardly see any people."

As merchants complain, sales in the commercial area near Hongdae have decreased due to the impact of the novel coronavirus (COVID-19).

According to Seoul City’s comparison of card sales from February 10 to last month’s 24th with the same period last year, sales in Seogyo-dong, Mapo-gu, dropped by 107.3 billion won. The sales change rate from May 18 to 24 showed -24.3%, -28.6%, and -22.6% compared to the same period last year.

Regardless of region, the industry with the largest sales decrease across Seoul was Korean food. From February 10 to May 24, sales dropped by 740 billion won compared to the same period last year. This was followed by department stores, other dining, academies, and clothing/apparel sectors. The largest decreases were in industries closely connected to ordinary people’s daily lives.

Busking performances commonly seen in Hongdae have been temporarily banned due to the impact of COVID-19. As a result, there were no visitors coming to Hongdae to watch these performances. Photo by Seunggon Han hsg@asiae.co.kr

This consumption pattern, combined with Hongdae’s unique commercial characteristics, results in minimal effects from the relief funds, merchants complain. The area is densely packed with entertainment facilities such as emotional pubs and coin karaoke rooms.

However, due to COVID-19, most entertainment facilities were ordered to close, leading to a decrease in foot traffic and making the streets quiet, which naturally reduced visits to nearby restaurants and shops.

In fact, since December last year, the average monthly sales of cafes in the Hongdae commercial area have been declining. According to an analysis by the Commercial Information Research Institute using SK Telecom’s big data service platform GeoVision, cafe sales in Hongdae were about 19.8 million won in December last year but dropped to about 16 million won in January this year, a decrease of approximately 3.8 million won.

In February, sales further decreased by 3.28 million won to 12.72 million won, totaling a decline of about 7.08 million won compared to December last year.

Afternoon of the 9th, a busy street near Hongdae. Photo by Seunggon Han hsg@asiae.co.kr

The mismatch between the consumption patterns of the relief funds and the nature of the Hongdae commercial area also deepens merchants’ sighs. According to the Ministry of the Interior and Safety, the most common use of the relief funds was for purchasing agricultural and food products (36.6%). This was followed by dining out and delivery (22.9%), manufactured goods (10.7%), medical expenses (10.9%), cultural activities (7.2%), education expenses (6.1%), and others (3.7%).

In summary, the commercial area that is distinctive and most frequented by people in their 20s and 30s has been bypassed by the impact of COVID-19 and the consumption patterns of the relief funds, increasing merchants’ frustrations.

Lee (58), who has been a street vendor at Hongdae Entrance Station?the area with the highest foot traffic?for 20 years, lamented, "Our store accepts card payments, but sales have drastically dropped. You could say customers have completely stopped coming." He added, "Since the emergency relief funds were implemented, there are more people on the streets, but it doesn’t translate into business for us."

Experts analyze that due to Hongdae’s unique commercial characteristics, the perceived sales decline caused by COVID-19 can feel even more severe. A commercial area analyst said, "Compared to other areas, relatively high rent and key money levels are set, so small-capital self-employed business owners inevitably have greater difficulties."

This content was produced with the assistance of AI translation services.