[Report] "It Will Get Better" vs "We Have to Wait and See" With Corona... Will Self-Employed Businesses Breathe Easier?

"Thank you for everything," "Lease inquiries," "Temporary closure"... High vacancy rate and business closures in Myeongdong
"If many people gather, it will regain vitality," "Won't group orders come in?" Expectations
"No meaning without normalization," "No change expected," also cynical responses

A closure notice is posted on a store in Myeongdong that ceased operations last August. Photo by So-Young Kim sozero815@asiae.co.kr

[Asia Economy Reporter Kim Soyoung] "I hope it goes well, it’s really been so hard..."

The government announced that it will transition the COVID-19 quarantine system to a 'step-by-step return to daily life' (With Corona) system starting early next month. This comes about 1 year and 9 months after the first COVID-19 patient was reported in Korea on January 20 last year. With Corona means focusing on managing COVID-19 patients while gradually easing social distancing measures to return to pre-COVID-19 daily life. The process of returning to normal life is expected to begin as early as the 1st of next month.

On the afternoon of the 18th, self-employed business owners met in Myeongdong, Jung-gu, Seoul, expressed mixed feelings of anticipation, concern, and hope against despair upon hearing this news. Myeongdong is one of the urban commercial districts hit hardest by COVID-19. Signs such as 'For Lease' and 'Closing Down' are still visible throughout the streets, showing the pain of self-employed people who could not endure the drop in sales. Not only in Myeongdong but some self-employed individuals have been in such severe financial distress that some have even taken their own lives, continuing a pessimistic situation.

A restaurant franchise owner, Mr. Kang (57), whom we met in Myeongdong and who said he is in the process of closing his business, shared that the last day of operation for his restaurant, which he has run for 18 years, is approaching.

He sighed, saying, "First of all, with the suspension of flight routes, special commercial districts like Myeongdong are extremely difficult. We endured and endured but decided to close, and now we only operate during lunchtime."

Regarding the possibility that Myeongdong streets might revive with With Corona, he lamented, "I think it might be harder than we expect. Unless things return to normal as before, I wonder if small relaxations have much meaning. Some might benefit from the easing, but honestly, I think it’s just false hope. Places like Hongdae gather many people, but there’s no guarantee that it won’t explode again."

A store in Myeongdong with a temporary closure notice. Photo by So-Young Kim sozero815@asiae.co.kr

Mr. Yoon (45), who runs a specialty lens sales business, said, "Sales have been very poor these days. After being hit so hard, I realized that a large proportion of our customers were foreigners." When asked about the possibility of the streets reopening, he replied, "I’m a bit cynical and have no expectations. I don’t think even a brief easing will bring any noticeable change."

He explained, "With With Corona, I hope many foreigners come, but even if not foreigners, I hope many Koreans also visit. As you can see, people don’t come out much, and it seems especially severe compared to other neighborhoods. While restaurants with more vaccinated customers might do well, we have been hitting rock bottom steadily since March last year."

Signs such as 'For Lease' and 'Closing Down' were posted throughout Myeongdong streets, reflecting the complaints of self-employed people. Citizens who saw these signs also expressed their sympathy.

A citizen met on the street sighed, saying, "Three restaurants I was looking for in Myeongdong, which I visited after a long time, have all closed." Mr. Kang, in his 40s, who said he used to work in the travel industry, said, "Although things are gradually improving, it will take quite a long time for Myeongdong to regain its vitality. Since With Corona has started anyway, I hope it is pushed through wholeheartedly until the end."

Another citizen, Mr. Kim in his 60s, raised his voice, saying, "Honestly, I still don’t understand the restrictions on the number of people and operating hours. Isn’t it just playing with numbers? It’s just number games." He also pointed out, "The With Corona period is much delayed."

A street in Myeongdong on the 18th. Photo by So-Young Kim sozero815@asiae.co.kr

While small business owners continue to express worries and concerns that the damage caused by COVID-19 and the gradual recovery may still be difficult to repair, some showed a small sense of hope.

Mr. Miyake (57), a Japanese national who worked for four years at a toast shop in Myeongdong, said, "Before, many foreign tourists came and lined up here. These days, it’s about one-tenth of that. Because there are so few people, my working hours have also decreased." However, he added, "In the past, we received many group orders, and I think those will come back once people start gathering again."

Mr. Kim (34), an office worker who said he works at an IT company, said, "Usually, we eat separately, but today we came out together for the first time in a while. I’m happy that opportunities for company dinners and gatherings might increase again, but I’m also worried," smiling. Indeed, groups of office workers were noticeable on Myeongdong streets during lunchtime that day. In front of a famous restaurant, customers were seen waiting in a long line.

Reactions from other industries not subject to restrictions on cafes or restaurants varied. Mr. Choi (57), who has worked for 30 years at a record store in Myeongdong that has been around for 45 years, described the situation in Myeongdong after COVID-19 as "the worst." He complained, "It was suffocating, like I couldn’t breathe. We almost reached the brink of closure but just gritted our teeth and endured."

Mr. Choi emphasized, "Tenants in Myeongdong have lost all their deposits and are forced to close when they can’t endure anymore. But some stores can’t close because of the cost of restoring the premises after closure. The situation is the worst, the worst." He added, "This place needs many tourists to be revitalized, so we are hoping for that. About 10% to 15% of our customers were domestic, and the rest were all foreigners."

A shop in Myeongdong with its door closed. Photo by So-Young Kim sozero815@asiae.co.kr

Regarding the eased social distancing adjustment, he said, "It’s a good thing. It gives hope. Or rather, we try to have hope. There is a will to live because we can’t die. When people gather for meetings, the floating population increases," expressing a positive outlook.

Meanwhile, expectations among self-employed business owners for the step-by-step return to daily life are rising. According to a survey conducted on the 12th by the part-time job platform 'Albamon' targeting 323 self-employed people about the transition to With Corona, 86.7% responded positively.

However, merchants in Myeongdong, whose main customers are foreign tourists, expect it will take time to return to the previous state. According to the 'Q2 (April-June) Commercial Real Estate Lease Trend Survey' this year, the vacancy rate of small-scale stores in Myeongdong rose to 43.3%, up 5 percentage points from 38.3% in Q1. This is the highest figure since related statistics began in 2017.

The government urged social attention to self-employed people who are suffering extreme hardship. Minister Kwon Chil-seung of the Ministry of SMEs and Startups said on his Facebook regarding the two-week extension of social distancing that day, "Social distancing has been extended for two weeks. Although restrictions on the number of private gatherings have been partially eased, operating hour restrictions for restaurants in the metropolitan area remain unchanged. It is very disappointing." He emphasized, "Social attention and shared pain are urgently needed for those who have made special sacrifices due to COVID-19."