Latecomers Challenging Golfzon's Dominance... After Kakao, Shinsegae Also Enters the Race

"Golf Industry Peak Passed" Despite Evaluation, Screen Golf Still 'Booming'
Kakao VX Aggressively Pursues Sales... Shinsegae Also to Open 'TGX' Within the Year

[Asia Economy Reporter Seohee Lee] Although the golf industry, which had been rapidly growing due to COVID-19, is showing signs of instability, the screen golf market is an exception. While concerns about an economic downturn are spreading and golf participation is declining, the number of screen golf franchise stores continues to increase. In particular, KakaoVX, a latecomer, is aggressively expanding its business to challenge the dominance of 'Golfzon,' which controls 60% of the domestic screen golf market. Recently, Shinsegae Group also announced plans to enter the market, intensifying competition among companies.

Why Is Screen Golf Thriving Despite Warning Signs in the Golf Market?

Indicators related to the golf industry are not looking good. On the used goods trading platform Junggonara, the number of driver sale posts surged from 2,218 in January to 6,179 in September. This is analyzed as a result of the golf craze, which had spread like a trend among the 20s and 30s generation, cooling down and causing a sharp increase in used items.

Golf membership prices, which had been soaring, are also rapidly declining. According to Ace Golf, a membership trading site, the 'membership index' was 1,344 in June but dropped about 9% to 1,217 this month. The membership index is a price index based on membership prices as of January 1, 2005 (1000). Over the past six months, prices have fallen across all tiers: ultra-high (over 800 million KRW), high (350 million to 800 million KRW), mid (150 million to 350 million KRW), and low (under 150 million KRW).

However, despite this trend, the screen golf market continues to thrive alone. Golfzon, which holds 60% of the domestic screen golf market, recorded cumulative sales of 476.2 billion KRW and operating profit of 141.2 billion KRW through the third quarter this year. These figures represent increases of 45.1% and 47.7% respectively compared to the previous year.

The industry attributes this sales growth to the unprecedented boom of 'Golfzon Park,' the screen golf franchise. According to Golfzon, the number of Golfzon Park franchise stores reached 2,133 in the third quarter of this year, a 25% increase compared to the same period last year. The number of game rounds also rose about 12% year-on-year to 22.76 million.

Experts point to the steady influx of the '5060 generation' who enjoyed golf even before COVID-19 as the growth driver of the screen golf market. Despite the mass departure of so-called 'golf beginners,' middle-aged and older generations continue to gather at screen golf venues rather than on the field, sustaining the historic boom.

Seocheon Beom, director of the Korea Leisure Industry Research Institute, said, "Screen golf was not a culture that suddenly emerged after COVID-19 but has been regarded as a nightlife culture among middle-aged and older people even before the pandemic," adding, "It seems that the middle-aged generation, burdened by high green fees, is heading to screen golf venues instead of the field."

KakaoVX Chasing Industry Leader Golfzon

Competition among companies is also heating up. KakaoVX, the industry's second-largest player, is rapidly expanding its base among younger generations by continuously releasing products featuring 'Kakao Friends' characters.

According to KakaoVX, the number of stores of its screen golf brand 'Friends Screen' reached about 4,300 in October this year (including overseas), a 25% increase compared to the same period last year. Although the gap is still large, the pace of narrowing it is fast.

KakaoVX plans to differentiate itself from Golfzon by leveraging integration with existing Kakao services such as Kakao Mobility and Kakao Navi, as well as its familiar public image.

A KakaoVX representative said, "The concept of all businesses conducted by KakaoVX is 'Digital Transformation,' aiming to lower the entry barrier to golf and create an enjoyable golf market by combining technology, sports, and fun."

Shinsegae Joins with Premium Screen Golf Venues, Creating a Three-Way Competition

Recently, Shinsegae Group launched the screen golf brand 'TGX,' drawing attention to potential changes in the market landscape.

Shinsegae Construction, a Shinsegae Group affiliate, registered trademarks last month for golf instruction, game center provision, stadium facility leasing, golf practice range services, golf facility operation, and golf equipment rental, and launched the TGX brand.

TGX stands for 'Total Golf Experience.' However, it is also interpreted as 'Trinity,' the VVIP grade given only to the top 999 customers at Shinsegae Department Store, leading to speculation that TGX will be a premium screen golf venue for a select few.

News that TGX plans to operate not only screen golf venues but also golf lessons and golf wear businesses to create synergy has led to analysis that the domestic screen golf market will evolve into a 'three-way competition.' Currently, Shinsegae Construction has also registered retail businesses for golf pants, golf shirts, golf bags, and golf shoes, keeping the possibility of a golf wear business open.

A Shinsegae Group official said, "We are preparing to open the first TGX store within this year at Starfield COEX Mall," adding, "After the first store opens, we plan to continue expanding the number of stores."