84.5% of One-Person Creative Enterprises Struggle Due to COVID-19... "Pioneering New Sales Channels"

427,000 One-Person Creative Enterprises as of 2018
6.1% Increase from Previous Year...Average Sales 243 Million KRW
59.8% Direct Store Sales...7.8 Months Preparation for Startup

[Asia Economy Reporter Kim Bo-kyung] Among approximately 430,000 one-person creative enterprises in South Korea, 84.5% reported having experienced difficulties due to COVID-19. Most of these businesses responded to the crisis by seeking new sales channels or strengthening non-face-to-face services.

The Ministry of SMEs and Startups announced the results of the "2020 One-Person Creative Enterprise Survey" on the 8th. According to the One-Person Creative Enterprise Promotion Act, the ministry annually assesses the status of one-person creative enterprises to use as basic data for policy-making.

One-person creative enterprises are defined as businesses operated by a single individual without regular employees or by a joint business of fewer than five people, excluding 32 industries such as wholesale and retail, accommodation, food service, and pubs.

Previously, the survey used the National Business Survey list from Statistics Korea, which is based on business locations, but starting with this survey, it switched to the Enterprise Statistical Register (based on 2018), which is enterprise-based statistics like the Basic Statistics of SMEs, to improve accuracy.

As a result of changing the population base, the number of one-person creative enterprises was 427,367 as of 2018.

Previously, based on the National Business Survey, the number was 280,856 in 2017, but due to the change in the population base, time-series comparison is not possible. Instead, comparing with the same standard, the Enterprise Statistical Register, the number increased by 6.1% (24,755 enterprises) from 402,612 in 2017 to 427,367 in 2018.

By industry, most were engaged in manufacturing (40.9%), educational services (25%), personal and consumer goods repair (10.1%), and professional, scientific, and technical services (8.7%).

The survey on the status as of the end of 2019, targeting the 2018 population base, showed that the average sales per enterprise were 243 million KRW, an increase of about 1 million KRW compared to the previous year.

The average number of employees was 2.29. Compared to the 2018 average employment of 2.62, this is a decrease of 0.33. Even if employment occurs in a one-person creative enterprise, it is recognized as such for three years under special provisions.

Regarding the impact of COVID-19, 84.5% of enterprises responded that they had experienced difficulties due to the pandemic. As countermeasures, they answered new sales channel development (45%), strengthening non-face-to-face services (20%), and product/service changes (11.5%).

The average age of one-person creative enterprise representatives was 51.1 years, and the average business duration was 12 years. Direct sales through stores targeting consumers (55%) were high. Door-to-door sales accounted for 12.7%, sales through acquaintances 11.5%, and online sales 8.8%.

The main motivation for starting a one-person creative enterprise was "to utilize aptitude and ability," accounting for 60.3%. The preparation period for starting a business was 7.8 months, shortened for three consecutive years. The preparation period was 10.1 months in 2017 and 8.9 months in 2018.

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