"Nobody's Here" Empty Market... Merchants Missing the Chuseok Peak Due to COVID-19 'Worried Faces' [Report]

Namdaemun Market Quiet One Week Before Chuseok
Merchants Say "No Customers, Hard to Expect Big Sales" with Sad Faces
Ministry of SMEs to Distribute 'Small Business New Hope Fund' Starting 25th

On the 23rd at 2 PM, citizens are coming and going around Namdaemun Market, one week ahead of the Chuseok holiday. Photo by Yeonju Kim, intern reporter yeonju1853@asiae.co.kr

[Asia Economy reporters Seunggon Han, Yeonju Kim, and Yeongeun Kim] "We're in the middle of preparing for Chuseok... but there are no people coming to the market," "Sales have dropped by more than half compared to last Chuseok. It's really tough."

As the COVID-19 pandemic enters a prolonged phase, economic damages among self-employed individuals and small business owners are mounting. Merchants who had hoped to recover sales are growing increasingly worried as social distancing measures continue through the Chuseok holiday period.

Self-employed and small business owners have started to endure by reducing business hours and labor costs, but with more households simplifying their holiday preparations, they are facing severe financial difficulties.

At around 2 p.m. on the 23rd, Namdaemun Market, despite being in the peak period for Chuseok preparations, had a quiet atmosphere. Although each store displayed Chuseok gift sets, there were no customers seeking them. Merchants came out of their empty shops to solicit customers or sat on chairs, only looking at their phones.

A merchant in his 50s, Mr. Park, whom we met at the market that day, sighed, "Usually, the market is bustling around Chuseok, but this year there really are no people," adding, "Sales are only enough to cover management fees, not even rent."

He continued, "Over 90% of visitors to Namdaemun Market are elderly. But since they are a vulnerable group to COVID-19, no one is coming out. On top of that, social distancing is being maintained through Chuseok, which is really hard. We all know everyone is struggling, but it feels miserable," he lamented.

Mr. Park, in his 60s, who runs a fruit and vegetable store, said, "Sales keep dropping, so living is not really living," expressing, "Since fruits and vegetables are perishable, if they don't sell, the losses are huge, so I'm debating whether to order more stock or not."

He added, "Fruit vendors rely on holiday sales to make a living, but since the COVID-19 situation hasn't ended, there is no big sales season. Last year, people bought a lot, but this year there is no sign of that, and people are not coming around much," sharing his frustration.

On the afternoon of the 23rd, a store in Namdaemun Market was seen ceasing operations. Photo by Young-eun Kim, intern reporter youngeun928@asiae.co.k

Given this situation, cases of business closures due to inability to withstand the recession have become frequent.

According to an analysis of data from the Small Enterprise and Market Service released by Real Estate 114, the number of commercial establishments in Seoul in the second quarter of this year was 370,321, a decrease of 21,178 from the first quarter (391,499). About 20,000 stores in Seoul alone closed within three months.

Mr. Kim, a merchant in his 60s who has run a general store for 40 years, said, "I've been in business for 40 years, but this year is the worst of the worst," lamenting, "Sales have dropped by more than 90%, so I can't even afford rent and barely pay management fees, barely surviving with loans."

He added, "There are many days when I open the store all day but sell nothing. I couldn't even open today," he complained. "I plan to operate only until the building contract expires and am even considering closing the business afterward."

There are also concerns that the situation will worsen entering the winter season after Chuseok. Mr. Kim, a merchant in his 60s who sells groceries, said, "Due to COVID-19, the economy has slumped, and sales have dropped by more than half," expressing concern, "Especially for Chuseok gift sets, if they are not sold during the holiday period, it results in a loss, so we are only stocking the minimum quantity to endure. If we can't do well during Chuseok sales, it will be even harder to get through the winter."

On the afternoon of the 23rd, Chuseok gift sets displayed at a grocery store in Namdaemun Market. Photo by Yeonju Kim, intern reporter yeonju1853@asiae.co.kr

In fact, many merchants share Mr. Kim's concerns about declining sales in the second half of the year. According to the '4th Supplementary Budget and Small Business Management Status Survey' conducted by the Korea Federation of SMEs from the 14th to the 18th among 500 small business owners in wholesale, retail, food service, and lodging industries, 80% of respondents said their business conditions would worsen after the third quarter.

Mr. Kim said, "Because this vicious cycle repeats, small-scale merchants like us who can't even pay rent immediately are getting into increasingly difficult situations," adding, "There is no clear prospect of improvement, and there are no specific policies to reduce rent, so markets and merchants are going bankrupt."

Experts have suggested the need for measures to address the damages suffered by small-scale merchants due to COVID-19. They also revealed that a system is being promoted to revitalize the economy by introducing a kind of 'mobile market' where customers can purchase market goods via smartphones.

Mr. Pyeon Jeong-su, president of the Seoul Market Merchants Association, said, "Traditional market merchants are repeatedly suffering economic damage due to the prolonged COVID-19 situation," emphasizing, "They are going through great difficulties, and measures must be prepared so that they can overcome these hard times."

President Pyeon explained, "The association is currently working on building a smart platform that allows ordering and delivery of products within the market via mobile," adding, "We are also diligently conducting market disinfection and promoting systems to revitalize the market economy."

Meanwhile, the Ministry of SMEs and Startups announced that from the 25th, 'Small Business New Hope Fund' ranging from 1 million to 2 million KRW will be paid sequentially.

Minister Park Young-sun of the Ministry of SMEs and Startups said at a briefing on the 4th supplementary budget at the Government Seoul Office, "From the 24th, applications for the Small Business New Hope Fund, a special support fund exclusively for small business owners, will begin."

The New Hope Fund support targets are divided into general industries and specially affected industries. General industries include small business owners with annual sales of 400 million KRW or less last year and whose average monthly sales in the first half of this year decreased compared to last year. The payment amount is 1 million KRW.

Specially affected industries include small business owners who have been subject to gathering bans or business restrictions due to strengthened social distancing measures by the Central Disaster and Safety Countermeasures Headquarters since the 16th of last month. These industries receive support regardless of annual sales size or sales decline. The Ministry plans to provide 2 million KRW to gathering-ban industries and 1.5 million KRW to business-restricted industries.

Applications for the Small Business New Hope Fund will be accepted from the 24th, with payments starting on the 25th.