Korea’s dying markets

September 16th, 2012 |
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Korea’s traditional markets have seen a staggering decline within the last 20 years. As recently as 1993, most Korean housewives would head to a local market for fresh poultry, produce and groceries. When the first E-Mart opened in November that year, it introduced a whole new world of discount shopping to Korean consumers. Clean, modern facilities sprung up around the country, offering competitive pricing on almost anything one needed for a home. Instead of customers haggling for lower prices, economies of scale did it for them. 

It forever changed how Koreans shopped and brought on the decline of traditional markets. 

After E-Mart’s success, many have jumped into the market, driving competition up and prices even lower. Lotte Mart opened its first discount store in 1998 and now has 96 branches. Homeplus launched in 2000 and now has 130 locations. The aforementioned E-Mart is the market leader with 146 outlets. 

Korea’s markets are dying and there isn’t much anyone can do about it, but that doesn’t mean the government isn’t trying. 

On April 22, the government announced an ambitious plan to help struggling traditional markets and small businesses. What Korea calls “super supermarkets” (SSMs) and large discount stores all over Korea were forced to close their doors on the second and fourth Sunday of every month. The ordinance, known as the SSM Regulation, also limited their operating hours to 8 a.m. to midnight.  

But it’s not only large discount stores that threaten the existence of traditional markets. HomePlus Express and Emart Everyday are small enough that they can be opened in neighborhood side streets quickly and cheaply. They also have the backing of the conglomerates and are able to offer goods at lower prices than the traditional markets that are usually just around the corner. 

All of this prompted the passing of the SSM Regulation. It has been met with a mixed reaction, but it seems the tide has turned against the law. Most people either think it’s completely ineffective or illegal. Only a small percentage of people think it achieved its goal. 

The regulation itself, although passed by the national government, was set up as an ordinance that could be reviewed by each of the local governments in the country, such as the district offices in Seoul. As such, local governments around the country have been striking down the ordinance one after another. In total, 760 of the 1,463 (52 percent) affected stores were still not allowed to open on two Sundays a month, while 699 faced no limitations because their local government overturned the ordinance as of the first week of August. 

The ordinance’s days seem numbered. By the time all 1,463 stores are allowed to open whenever they want, the ordinance will have accomplished nothing. Markets will scramble to find ways to attract more customers. The government will search for another plan. 

Can Korea’s markets be saved? Groove Korea put that question to Seoul’s market vendors, and asked them for some solutions. Surprisingly, most of the people we talked to were optimistic. As for solutions, modernizations was touted by many as the way forward, with others suggesting improved customer service and even more parking spaces. 

Name: Ahn Jeong-bun 

Age: 57

Occupation in market: Owner, producer of side dishes

Market: Gubeundari Alley Market

Why did you open your market stall?

I love making food. People kept telling me to give it a go, so I started this store. It’s hard work, as we have to clean, cut and make everything ourselves. People like the kimchi, so many customers come here. 

After the SSM ruling was reversed in this area, have more or fewer people come to the market?

As long as we have big supermarkets, there will always be people who go there. People still come here, too. Well, people like me come here. 

Why do you think people prefer big supermarkets?

Well, I guess they’re just better. People don’t have time, and many don’t like to make food. Even when they do, it doesn’t taste very good. 

In your opinion, did the SSM ruling help?

Of course! If those places close for a day, people have to shop somewhere. People who need something urgently when the supermarket is closed will come here to get it. I think that’s great.

Name: Kim Jong-ho   

Age: 62

Occupation in market:  Vice president of market committee

Market: Gubeundari Alley Market

Do you think the regulation has helped?

Certainly. Especially in the first few months. We have 84 stalls at our market. We never used to have empty storefronts here, but lately more and more are closing. I hoped that the Seoul city government and Gangdong district would have enforced the regulation more strongly. 

Large companies control everything, and that is hard for us to compete with. 

For the short time the regulation was in effect here, did you notice that more people came to the market?

Yes. It wasn’t really apparent at first, but after two weeks, more people started to come. It was great. Sales increased significantly, but these days they are decreasing again. Especially on hot days like today. More will come in the evening, when it cools down a little. 

What do you think can be done to save traditional markets?

First of all, we need to modernize the market. Take the signs for example: they need changing. Even I don’t want to look at them. They look messy. We need all the stalls to have the same sign, and we have to replace these old awnings. 

Name: Choi Tae-ja

Age: 56

Occupation in market: 28 years operating a fish store

Market: Gubeundari Alley Market

Why do you think more and more people go to the big supermarkets?

The big supermarkets are convenient and simple. You can go there and get everything you need without worrying. 

Are there any other reasons people might not choose a market like this? 

Before the subway came through here, many people visited the market. But since that time, the number of people has been getting smaller and smaller.

Name: Son Kyeong-seok

Age: 28

Occupation in market: Runs fish stall with brother

Market: Dunchon-dong Market

Do you think that the SSM Ruling has helped?

For us, we don’t really feel its existence. It has not had a significant influence here. We didn’t notice anything. 

There are large supermarkets close by this market. Do you feel that they are affecting your business?

I didn’t notice it before, but these days I feel it a little. More people are going to those supermarkets now. 

Name: So Chang-u 

Age: 32

Occupation in market:  Butcher

Market: Dunchon-dong Market

Do you feel that the SSM Regulation has had much of an effect? 

If there has been an effect, the reason I don’t think it is significant is because people will go, or not go, where they want. Just because they made a law doesn’t mean people will automatically come here, or go to a big supermarket. We, as merchants, have to work hard at the markets to make sure the big supermarkets don’t take away our customers. Closing the big supermarkets for two days a month does not mean those people will come to our market. 

The media are saying that this regulation is bringing more people to traditional markets, but the truth is that it really isn’t. Even with that law, the SSMs are open more days than they are closed. On the days when they are open, we just have to work harder so they don’t take our customers. 

What can merchants at traditional markets do to bring back customers?

We have to change the way we think. We have to work hard for all our customers, not just our regular or big buyers. We have our regular customers. But others come, too. They don’t buy a lot, just a bit of this and that. We have to treat these customers the same. We shouldn’t only greet our big customers with a 90-degree bow, and then just send the smaller customers away. 

Name: Jeon Sang-hui 

Age: 45

Occupation in market: 

Dried seaweed wholesale and Retail

Market: Dunchon-dong Market

How long have you operated your store?

For seven years.

Did you notice any effect when the regulation was in place?

Our market is a little farther away from the SSMs, and so it didn’t really have any effect on us. 

Do you think that traditional markets are struggling because of SSMs?

Certainly. It’s not like they don’t have any effect on traditional markets.

What do you think makes your customers come to the traditional market?

There are quite a few reasons. People live close by, and maybe they like the markets. There are some who come to traditional markets, and those who go to department stores. There are those that find what they need in a traditional market, and those who don’t even know about the market. People go to the department stores for processed foods, but come here for fresh foods. Maybe that is the biggest reason. 

What do you think can be done to save traditional markets?

Rather than receiving help from outside, I think that we, as merchants, need to change. We need to make nicer displays, clean the place up a little bit, and be a little kinder. That’s probably the biggest thing. 

It doesn’t matter how much you beautify the market—people won’t come for that reason alone. We need to research, to find out what the customers want, but nobody is doing that. That’s the way I see it.