Even Baek Jong-won's Stores Halved... Dining Industry Faces Mass Closures Due to COVID-19

Due to lockdown measures, customer numbers declined
Significant decrease in overseas stores last year
China 271 and US 108 stores closed

[Asia Economy Reporter Lim Hye-seon] The magic of ‘Home-cooked Meals by Baek Seon-saeng’ could not overcome COVID-19. Despite the global craze for Korean food such as Korean ramen and dumplings, domestic dining companies’ overseas stores have suffered consecutive defeats. Due to worldwide lockdowns, customer visits sharply declined, resulting in nearly 10% of stores disappearing.

Number of Overseas Stores of Dining Companies Decreased by 10%

According to the ‘2020 Survey on Overseas Expansion of Dining Companies’ released on the 26th by the Ministry of Agriculture, Food and Rural Affairs and the Korea Agro-Fisheries & Food Trade Corporation, the number of overseas stores of 2,243 domestic dining companies registered with the Fair Trade Commission was 3,945 last year, down 374 from 4,319 the previous year. The main regions of decline were China and the United States. The number of stores in China decreased by 271, from 1,919 to 1,648. The number of brands also dropped by four from the previous year, totaling 87. In the U.S., stores decreased by 108, from 547 to 439.

Baek Jong-won, who dreamed of globalizing ‘K-dining,’ reduced the number of stores of his Korean food brand Bon Ga in China from 42 to 22, cutting it in half, and closed the stores he operated in Cambodia. Korean food specialty restaurants Bon Ga Kitchen and Seoul Kitchen withdrew from China and Japan, respectively. Uraeok, a Pyongyang cold noodle specialty restaurant that promoted ‘the taste of Korea’ in the U.S., also closed its doors with a heavy heart.

Chicken and Bakery Also Suffered Due to COVID-19

Korean chicken and bakery companies that ventured into overseas markets also bowed their heads. Genesis BBQ, a chicken specialty store that gained popularity in China along with the rise of K-dramas, withdrew all but one store. Instead, they increased stores in the U.S. and Taiwan, but the total number of overseas stores decreased from 129 to 93.

CJ Foodville’s bakery chain Tous Les Jours also closed 72 stores, dropping from 344 to 272. Tteumsae Ramen, famous for its spicy ramen, expanded into China, Taiwan, and Malaysia but closed all stores. The number of brands that went out of business overseas reached 11. Overseas sales of dining companies also declined. The proportion of stores with annual sales between 1 billion and 3 billion KRW decreased from 15.6% to 11.3%, and those with sales between 300 million and 1 billion KRW dropped from 24% to 19.7%.

The Ministry of Agriculture’s survey revealed that about half of dining companies are reconsidering their overseas expansion strategies due to COVID-19, signaling a red light for the global expansion of ‘K-dining.’ Among all respondents, 68% reported a downward trend in overseas sales.

Mixed Fortunes in Food and Dining Industries

The crisis for dining companies is largely due to COVID-19. According to the international statistics site Worldometer, as of 10 a.m. on the 25th, the cumulative number of COVID-19 cases worldwide reached 113.07 million. Avoiding face-to-face facilities, overseas store sales of dining companies fell by 20.3% compared to the previous year. Meanwhile, food companies manufacturing and selling convenience foods such as ramen, dumplings, and kimchi achieved record-high performance in overseas markets. CJ CheilJedang’s overseas business operating profit increased by 49.1% from the previous year, surpassing 1 trillion KRW in annual operating profit. Nongshim and Orion also achieved record growth overseas.

A dining company official explained, "Instead of increasing the number of countries entered, we are focusing on pinpoint investments," adding, "We are monitoring the situation until vaccination rates expand and daily life returns."

Experts advise proactive responses to paradigm shifts. Professor Seo Yong-gu of Sookmyung Women’s University said, "Due to COVID-19, the dining market has shifted its focus to non-face-to-face services, causing overseas companies to struggle," adding, "To survive overseas, companies must create new customer value through collaboration across different industries."

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