One Year of COVID-19, 6 out of 10 Seoul Alley Businesses Experience 'Sales Decline'... Total Sales Down 20%

Seoul City Analyzes Big Data on Sales Before and After COVID-19 in 1,009 Alleyway Commercial Districts

[Asia Economy Reporter Lim Cheol-young] Due to COVID-19, total sales in Seoul's neighborhood commercial districts decreased by nearly 20%, with 6 out of 10 districts experiencing a decline in sales.

On the 19th, Seoul City analyzed the impact of COVID-19 on neighborhood commercial districts through big data analysis. The total sales in these districts dropped from approximately 2 trillion KRW to 1.6 trillion KRW (-19.6%), and the average monthly sales per store decreased from 19 million KRW to 17 million KRW (-13.8%). Among the neighborhood commercial districts, 6 out of 10 (58.7%) saw a decline in sales, while 4 out of 10 (41.3%) either maintained or increased sales despite the pandemic. This analysis was conducted in collaboration with the Seoul Credit Guarantee Foundation's Small Business Policy Research Center, using monthly average sales big data from 1,009 neighborhood commercial districts in Seoul based on Shinhan Card sales data.

The closer the districts were to residential and living areas, the more likely they were to maintain or increase sales. In these districts, the retail sector, including used furniture, lighting, and food ingredients, accounted for the largest share at 41.5%. Conversely, districts closer to the city center experienced larger sales declines, with the dining sector comprising 65.3% of these areas. This is attributed to reduced dining out due to social distancing and increased time spent at home, which boosted demand for purchasing ingredients for home cooking or self-interior projects.

Seoul City plans to use the analysis of COVID-19's impact on neighborhood commercial districts and business types to identify the causes of differences among districts and to establish support policies for small business owners and self-employed individuals suffering from the pandemic.

Overall, sales in Seoul's neighborhood commercial districts declined after the onset of COVID-19. Monthly total sales decreased during the first wave of local spread from January to March last year but saw some rebound in April and May when disaster relief funds were distributed. Sales then declined again during subsequent local spread periods in the latter half of last year.

Among the districts, 417 locations (41.3%) either increased or maintained sales, while 592 locations (58.7%) experienced relatively large sales declines. The average sales in the better-performing districts rose by 8.2%, from about 19.28 million KRW (October 2019) to 20.86 million KRW (December 2020). In contrast, the average sales in districts with declining sales dropped by 24.5% during the same period.

Different patterns were observed across the 25 autonomous districts. Outer districts with dense residential areas such as Geumcheon, Eunpyeong, Dongdaemun, and Yangcheon saw many neighborhood commercial districts with increased sales. In contrast, central or adjacent districts like Mapo, Yongsan, Jongno, Gwangjin, and Jung experienced more districts with sales declines. For example, in Geumcheon-gu, 20 out of 29 districts saw sales increase or remain stable, whereas in Mapo-gu, 40 out of 49 districts experienced significant sales drops.

By business type, districts with increased sales had the highest proportion of retail at 41.5%, while those with decreased sales had the highest proportion of dining at 65.3%. The implementation of social distancing and voluntary reduction in outings led to a contraction in dining-centered consumption, especially impacting business districts in the city center and areas frequented by domestic and international tourists and office workers.

Han Jong-kwan, Chairman of the Seoul Credit Guarantee Foundation, stated, "Not only in the post-COVID era but also if any infectious disease spreads again in the future, if the government and self-employed businesses unite to prepare in advance and actively respond to crises, sustainable commercial districts can be achieved."

Lee Won-mok, Director of Seoul City's Smart City Policy Division, said, "This analysis shows that consumer movement and consumption patterns changed according to the spread of COVID-19, causing fluctuations among business types, which suggests the possibility of reevaluating neighborhood commercial districts based on these fluctuations. We will use these analysis results as basic data to establish effective measures to support small business owners and self-employed individuals suffering from COVID-19."

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