8 out of 10 SMEs Hit Hard by COVID-19 Crisis

As the novel coronavirus disease (COVID-19) resurges, increasing difficulties for small business owners, a merchant was organizing goods at the Goyang Furniture Complex in Gyeonggi Province on the 21st. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Moon Hyewon] Eight out of ten domestic small and medium-sized enterprises (SMEs) have been affected by the COVID-19 pandemic.

On the 27th, the Gyeongcheong Foundation commissioned the research firm Korea Gallup to conduct a survey targeting 1,000 SMEs nationwide with annual sales of over 100 million KRW. The results showed that since the outbreak of COVID-19 in Korea in February, 77.0% of SMEs reported a decrease in sales as of the end of last month compared to the same period last year. During the same period, 22.4% of companies reported no change in sales, while only 0.6% experienced an increase in sales.

The average sales decline was 39.2%, with the highest response rate (34.6%) indicating a decrease of between 50% and less than 70%. Those reporting a decrease of 30% to less than 50% accounted for 26.8%, 20% to less than 30% was 17.4%, and companies experiencing a sales drop of 70% or more made up 12.2%.

By industry, ‘Accommodation and Food Services’ saw a 95.2% decrease in sales, and ‘Educational Services’ experienced a 94.9% decline. Regionally, companies located in Daegu and Gyeongbuk suffered the most, with 89% reporting losses. Companies in the Gwangju and Jeolla regions also faced significant damage, with 80.5% reporting decreased sales.

When asked about the most needed support methods for affected SMEs, loan support accounted for the highest proportion at 31.1%. Tax reductions including national and local taxes (29.5%), employment stabilization fund support (17.8%), and guarantee support (6.1%) followed. Other responses included financial difficulty counseling (5.8%), rent reductions for government and local government-owned properties (4.5%), and various regulatory relaxations (4.4%).

Jang Taegwan, director of Gyeongcheong, said, “This survey allowed us to directly grasp the severity of the damage suffered by micro SMEs and small business owners who were hit hardest by the COVID-19 crisis. We hope that policy support tailored to the needs of SMEs facing another crisis due to the resurgence of COVID-19 will be provided.”

Meanwhile, the survey was conducted from June 15 to July 24 of this year. The sampling error is ±3.1 percentage points at a 95% confidence level.

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