"No Weekday Customers at All"... The Decline of Myeongdong

Cosmetics Stores Close or Suspend Operations by 80% in One Year
Monthly Store Sales Lower Than a Single 'Labang' Broadcast
Industry Focuses on Strengthening Global and Online Markets

On the 17th, a banner announcing a temporary closure was hung at the Tony Moly store in Myeongdong, Jung-gu, Seoul.

[Asia Economy Reporter Seungjin Lee] On the afternoon of the 17th, Myeongdong in Jung-gu, Seoul. A street that had seen a sharp drop in shoppers due to COVID-19 suddenly became bustling for a moment. Work vehicles and workers were busily moving to demolish a cosmetics store located in the central street of the commercial district. This area, with about 20 various brand cosmetics stores gathered within a 200-meter straight line, was so crowded with foreign tourists before COVID-19 that there was hardly any space to move. However, one year after the outbreak of COVID-19, 80% of the 20 stores chose temporary closure or permanent shutdown.

Myeongdong Cosmetics Stores Closing One After Another

One of the industries most severely affected by COVID-19 in the Myeongdong commercial district is the cosmetics sales sector. Cosmetics stores in Myeongdong were a must-visit spot for foreign tourists before COVID-19. However, with foreign tourists decreasing by more than 90% due to COVID-19, store closures have continued.

According to the Small Enterprise and Market Service's commercial district analysis report, the number of retail and wholesale stores in Myeongdong decreased by 36%, from 611 in June 2019 to 395 in January this year. In contrast, the decrease rate for cosmetics stores was 53%, far exceeding the overall retail and wholesale decrease rate. The number of cosmetics stores dropped from 128 in June 2019 to 61 last January, more than halving. Pretty Skin, which operated eight stores within the Myeongdong commercial district, currently operates only one store, with the remaining seven temporarily closed.

An employee of a cosmetics store met that day explained, "On weekends, occasionally foreign tourists visit, but on weekdays, you can consider that there are no customers at all," adding, "Since people wear masks, even office workers around here have no reason to buy cosmetics; they just look at their phones after coming to work and then leave."

Monthly Store Sales Less Than One Live Broadcast

With the spread of non-face-to-face consumption due to COVID-19, the total sales of cosmetics stores in the Myeongdong commercial district have fallen to less than the sales generated by a single live broadcast. According to the Small Enterprise and Market Service's commercial district information, the estimated average monthly sales of cosmetics stores in Myeongdong is 1.78 million KRW. Considering that the monthly rent per unit area (㎡) in Myeongdong is 220,000 KRW, it is a situation where they cannot even pay rent, let alone labor costs.

Missha, a cosmetics brand of Able C&C, sold out 3,000 sets of 'Atelo Cream' during a Naver Shopping live broadcast, achieving sales of about 100 million KRW during the broadcast. In this situation, Able C&C has suspended operations of two out of four stores it operated in Myeongdong.

Currently, even when adding up the average monthly sales of 1.78 million KRW for the 61 cosmetics stores in Myeongdong, total sales amount to just about 100 million KRW. Meanwhile, live broadcast sales of brands like MAC and Amorepacific exceed hundreds of millions of KRW in a single day, clearly revealing the decline of the Myeongdong commercial district.

Cosmetics Industry Strengthens Overseas Business and Online Presence

After the collapse of the symbolic Myeongdong commercial district, the cosmetics industry is focusing on strengthening global markets and online channels.

Amorepacific aims to grow e-commerce sales by more than 30% by reinforcing organic collaboration with major domestic and international platforms. As of the last week of February, sales on the Amorepacific Mall increased by 33% compared to the same period last year. Amorepacific also plans to enhance digital marketing capabilities by expanding live commerce.

LG Household & Health Care, which laid the groundwork for entering the U.S. market by acquiring The Avon Company in August 2019, plans to showcase differentiated products overseas, including premium products like 'Whoo,' which surpassed 2 trillion KRW in annual sales.

An industry insider said, "Starting with Myeongdong, which was hit hard by COVID-19, offline sales have not recovered," adding, "Since COVID-19 is expected to continue, we plan to lead this year by increasing functional cosmetics instead of color cosmetics and targeting overseas markets."

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