[2020 Nightmare of Self-Employment] Severe Impact on Densely Populated Commercial Areas... "Rent Support Needed by Industry and Target"

Few People Found Around Jonggak Station
More Lease Notices Than Lit Signs
Once Crowded Express Bus Terminal Shops
Customer Foot Traffic Drops, 'Clearance Sales' Everywhere

Capital Region and Major Cities Suffer Most
Social Distancing Tightened... Fixed Costs Burden
Experts Say "Government Should Establish Funds to Support Interest and Rent"

On the afternoon of the 22nd, a notice indicating availability for rent is posted on the building adjacent to Exit 12 of the Jonggak Station underground shopping center.

[Asia Economy reporters Yujin Cho, Minyoung Cha, Seungjin Lee] The area around Jonggak Station, once called the 'prime commercial district' and attracting nearby office workers and university students after the outbreak of COVID-19, has become so deserted that it is hard to find people. At the entrances of shops that have been temporarily closed for an unknown period, various flyers and utility bills were piled up, and on the streets, rental notices outnumbered lit signs, evoking the image of a slum.

One-third of shops between Jonggak Station and Jongno 3-ga closed

Along the roughly 700-meter stretch from Exit 12 of the Jonggak Station underground shopping center to Exit 14 of Jongno 3-ga Station, 11 stores were either empty or closed. There was even a building from basement level 1 to the 5th floor entirely up for rent. At a large Chinese restaurant, all 20 tables were empty. The restaurant owner, Jaeyeon Kim, said, "With fewer office workers holding gatherings, it was common to fill less than half the tables, but after the 9 p.m. curfew, it became difficult to fill even two or three tables," adding, "As a result, we reduced the staff from about 30 to 10, one-third of the original number."

Only nearby fast-food outlets are thriving. Elderly people, having lost their way in front of the closed Tapgol Park in Nakwon-dong, Jongno-gu, sat densely packed at tables with just a cup of coffee or cola and a single hamburger. Mr. Heungyeol Kim (pseudonym), in his 70s, sighed, "There are fewer and fewer places for older people to spend time, so apart from fast-food restaurants, there is nowhere else."

The decline of fashion and beauty street stores

The underground fashion mall at the Express Bus Terminal. It appears quiet and deserted as foot traffic has dwindled.

The underground shopping mall at Seoul Express Bus Terminal, lined with fashion and cosmetics stores, showed a similar scene. The GoTo Mall, home to 620 shops, was once so crowded that shoppers could barely see the person in front of them, but after COVID-19, customer visits dropped sharply. Signs saying 'temporarily closed' were posted here and there, and despite phrases like 'clearance sale' and 'discount event,' the mall was empty without a single customer.

Mr. Manho Lee (pseudonym), who runs a 12-pyeong (approx. 40 square meters) women's clothing store, has suffered losses exceeding 200 million KRW due to COVID-19. The monthly rent of 4 million KRW is unaffordable, and even the monthly maintenance fee (450,000 to 500,000 KRW) is difficult to manage. Lee said, "I can't cover expenses with store sales, so I am barely surviving by taking out bank loans." Ms. Hyeyoung Park (pseudonym), who runs a clothing store next door, said, "I've been selling clothes in this underground mall for over 20 years, but I've never experienced such a recession," adding, "I have so much debt that I can't sleep without sleeping pills."

COVID-19 self-employed business damage concentrated in the metropolitan area

According to the Ministry of the Interior and Safety, from February to September, Sejong City recorded the highest closure rate nationwide at 9.9%. Following were Gyeonggi Province at 7.6%, Seoul at 7.1%, and Incheon at 7%, indicating that damage was severe in large cities and densely populated areas. Particularly in the 'food' and 'culture' sectors, out of 1,672,004 businesses, 108,117 closed, resulting in a closure rate of 6.5%. The reason for the concentrated damage in the metropolitan area and large cities was that social distancing measures were raised early in densely populated areas, and fixed costs such as rent and labor costs were high.

The period from startup to closure has also been decreasing since COVID-19. According to the Ministry of the Interior and Safety, among businesses that closed in Seoul, 57.7% had been operating for less than three years. Even long-standing businesses that lasted over 10 years were helpless against COVID-19. Those operating less than 10 years accounted for 13.7%, less than 20 years for 12.3%, and those operating over 20 years but closed this year accounted for 5%.

Experts say "urgent rent support needed"

A restaurant on the youthful street of Jonggak. Although it should be bustling with customers during the usual dinner hours, the place is completely empty.

Experts have raised their voices that the government should implement support policies by industry. Professor Chunhan Jo of the Department of Business Administration at Gyeonggi Science and Technology University said, "Government intervention through banks seems to be the fastest method," adding, "The central government should prepare a certain fund to support interest, rent, etc., by industry and target groups that have been severely affected."

Rent was cited as the most urgent issue to be resolved at this point. Professor Ikseong Kim, honorary president of the Korea Distribution Science Association (Dongduk Women's University), said, "If store operations can continue and sales recover, re-employment of staff is possible, but if the rent burden causes complete closure, negative effects will inevitably follow," adding, "With mid- to long-term support, small business owners and self-employed people should be helped to overcome the impact of COVID-19, maintain the market, and create a virtuous cycle that leads back to employment."

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