Declining Dongdaemun Fashion Town... Vacancy Rate of Medium to Large Shopping Centers at 11%

[Asia Economy Reporter Onyu Lim] The 'Dongdaemun Fashion Town commercial district,' the largest fashion industrial complex in South Korea, is experiencing a downturn due to the increase in online shopping mall usage and the spread of the novel coronavirus disease (COVID-19).

On the 22nd, the Commercial Information Research Institute analyzed statistics from the Korea Real Estate Board and found that the vacancy rate of medium to large stores in the Dongdaemun commercial district in the second quarter of this year was 10.8%. This is 2.9 percentage points (p) higher than Seoul's average vacancy rate of 7.9%. Additionally, the vacancy rate in the Dongdaemun commercial district has been continuously rising since the second quarter of last year, when it was 6.7%.

However, it was found that many people still visit the Dongdaemun Fashion Town commercial district. According to SK Telecom's big data surface platform Geovision, as of August, the average daily floating population in the area was 276,006 people. This means that 8.28 million people visit the area monthly.

Nevertheless, sales are significantly lower compared to nearby commercial districts. The estimated average monthly sales of general clothing stores within the Dongdaemun Fashion Town commercial district were 5.02 million KRW as of August. Researcher Hyuntaek Cho from the Commercial Information Research Institute analyzed, "This is 47.73 million KRW lower than the estimated average monthly sales of 52.75 million KRW for general clothing stores in Jung-gu, where the commercial district is located."

The economic downturn in this area is largely due to the spread of COVID-19. Researcher Cho explained, "Currently, the Dongdaemun Fashion Town commercial district is showing signs reminiscent of its past atmosphere," adding, "This can be attributed to the increase in mobile-based shopping mall usage and the stagnation of the fashion market caused by COVID-19."

He continued, "As the commercial district's atmosphere worsens, vacancies inside large malls are increasing, and as a result, the number of visitors is also decreasing," adding, "To regain vitality, it seems necessary to invest in improving the commercial district's image and to devise content that will attract demand."