Increase in Online and Contactless Startups and Real Estate Base Effect... 730,000 New Startups

Trends in Startup Companies in the First Half of 2021
Increase in Wholesale and Retail Businesses Centered on E-commerce
Growth in Delivery and Takeout Restaurants
Decline in New Startups in Manufacturing, Travel, and Leisure Industries

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] As online and contactless startups increase, the number of new startups in the first half of this year reached approximately 730,000. Excluding the real estate sector, which surged due to the mandatory registration of rental income earners last year, it increased by 10.2% compared to the same period last year.

According to the startup trend report announced by the Ministry of SMEs and Startups on the 31st, the number of new startups from January to June this year was 730,260, down 9.8% (79,339) from the same period last year.

The decrease in the number of new startups in the first half of this year compared to last year is largely due to a 45.1% decline in real estate startups. This is because real estate startups surged last year following the mandatory business registration for housing rental income earners earning less than 20 million won in the first half of last year. Excluding the real estate sector from the comparison, the number increased by 10.2% (52,798) compared to the first half of last year.

By industry, wholesale and retail trade reached 220,921, increasing by 18.3%, centered on e-commerce, thanks to the activation of online shopping. People in their 40s and youth (under 39), who are familiar with e-commerce, mainly led wholesale and retail startups. Corporate startups in wholesale and retail trade decreased by 3.5%, while individual startups increased by 20.5%.

With the increase in delivery services and platform-based transportation, startups in transportation and warehousing, such as small cargo transport and taxi transport, also increased by 10.4% to 33,955 compared to the previous year. Transportation and warehousing startups notably increased among those under 30 and over 60, and startups among middle-aged groups in their 40s and 50s were also active.

Accommodation and food service businesses (84,041) and personal service businesses (29,966), which had decreased last year due to social distancing and refraining from going out, increased by 1.8% and 9.1%, respectively.

In the case of accommodation and food service businesses, the increase was influenced by the rise in delivery (takeout) demand and strengthened reporting of rural lodging businesses. Notably, pubs and non-alcoholic beverage shops decreased, while coffee shops with takeout options, pizza, hamburger, and sandwich restaurants increased.

Technology-based startups, combining manufacturing and knowledge-based service industries, surpassed 120,000 for the first time in the first half of the year. Technology startups numbered 122,444, an increase of 5.3% (164) compared to the same period last year.

In particular, professional, scientific, and technical services (22.1%) and information and communication industries (29.3%) led the growth in technology startups. The information and communication industry saw active startups in ICT-based software development and supply, and information services. The professional, scientific, and technical services sector was mainly influenced by the growth of online advertising due to digital transformation and the expansion of the consulting market.

However, new manufacturing startups decreased by 1.7% to 24,974. The decline slowed somewhat as uncertainties in the business environment related to COVID-19 were partially resolved.

Among manufacturing, food and beverages, automobiles and trailers, medical, precision, and optical instruments, and rubber and plastics increased, but textiles, metal processing products, commercial machinery repair, and machinery and equipment decreased.

Due to sluggishness in travel agencies, event agencies, and call centers, business facility management also decreased by 14.6% to 21,113. Arts, sports, and leisure-related industries decreased by 5.5% to 13,227, and education services decreased by 1.7% to 20,910.

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