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Home > Economy


BUSINESS OPENINGS BY 20S, 60S UP DURING PANDEMIC, WITH HIGH DELIVERY APP
RELIANCE

2022.03.14 11:24:38 | 2022.03.14 15:43:31
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BUSINESS OPENINGS BY 20S, 60S UP DURING PANDEMIC, WITH HIGH DELIVERY APP
RELIANCE

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[Photo by MK DB]

Since Covid-19 hit the world in 2020, new business openings by Koreans in their
20s and 60s have increased more than those by other age groups in South Korea
while delivery apps have played a key role in sustaining and improving sales for
small businesses.

According to a joint study recently conducted by Maeil Business Newspaper and
Shinhan Card on 90 million revenue data of the credit card company’s merchant
members, the number of business openings fell from 424,000 in 2019 to 401,000 in
2020 then to 393,000 in 2021.

However, more people in their 20s and 60s have opened their own businesses than
other age groups did during the period.

Those in their 20s accounted for 14.2 percent of those who started a business in
2021, up from 12.5 percent in 2019 and 13.3 percent in 2020, based on Shinhan
Card’s new merchant membership data. The proportion of small business owners in
their 60s also expanded to 11.4 percent, from 10 percent in 2019 and 11.2
percent in 2020.

Small business owners in their 20s and 60s, however, are suspected to have been
forced to start a business after they struggled to land a job or make a living
during the Covid-19 crisis.

A total of 359,000 small businesses closed down in 2019. The number surged to
536,000 in 2020 and then retreated to 272,000 in 2021, suggesting that business
condition for small merchants had deteriorated rapidly when the pandemic started
in 2020 while some were even unable to close down their business due to related
cost, such as loan repayment, in 2021 when the government stopped giving away
subsidies to cover business shutdown costs.

While Covid-19 crisis and subsequent social-distancing restrictions has taken a
big toll on most of small businesses, especially restaurants and bars, those who
have actively incorporated their collaboration with food delivery apps thrived.


이미지 확대

[Graphics by Song Ji-yoon]

In-depth study into 440,000 stores out of Shihan Card’s 3 million merchant
members across Korea, 66.5 percent of small businesses that were in the top
10-percent group based on sales during the recent two years maintained their
leading position, mainly thanks to delivery apps, which take orders via mobile
applications from customers and deliver ordered items to their doorstep.

Looking into the top 10-percent small businesses in October-December 2021, 76.7
percent of them were able to make the group even only with sales earned via
delivery app.

Of some 120,000 small businesses that recorded sales growth versus 2019, 36
percent of their sales came from orders received via delivery apps. Of other
180,000 stores that saw sales drop generated only 5.8 percent from delivery
app-linked sales.

Such a trend was more apparent when studying the sales rank data by use of
delivery app. Of the top 20-percent stores based on sales, delivery app was
responsible for 21.7 percent. But the bottom 20 percent group generated only 5.6
percent of their sales from app-based delivery services.

By Shin Chan-ok and Cho Jeehyun

Read in Korean

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]


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