1. In an online community of more than 1.8 million small business owners, a user in Jeonju, North Jeolla Province, wrote on Friday: “Am I the only one whose business is falling apart?”
2. “The restaurant near my shop went out of business and has since been replaced by a rental space, and the walnut pastry store next to it also shut down,” the user continued. “This feels serious and unsettling.”
3. The post was soon flooded with sympathetic replies, including: “Business is so dead I can’t even think straight” and “I opened my chicken shop at 4 p.m. and only made 120,000 ($87) won by 8 p.m.”
4. These accounts from small business owners offer a vivid snapshot of the hardships many are enduring — struggles that are reflected in the data.
5. According to recent data from the National Tax Service, just over 1 million businesses — both individual and corporate — filed for closure last year, up by nearly 22,000 from the previous year. It was the first time the number surpassed 1 million since the government began tracking such statistics in 1995.
6. The surge in closures is widely attributed to prolonged business downturns following the COVID-19 pandemic, coupled with reduced consumer spending driven by high interest rates and inflation.
7. The most commonly cited reason was a downturn in business, with just over 500,000 owners attributing their closure to declining sales, accounting for 50.2 percent of all cases. It marked the first time on record that such closures exceeded 500,000, and the first time since 2010, in the wake of the global financial crisis, that business failure was the leading cause in more than half of all cases.
8. Other reasons for closure, in order of frequency, included: unspecified causes, business transfers, conversion to a corporation, administrative sanctions and mergers or dissolutions.
9. By industry, retail and restaurant businesses accounted for 45 percent of all closures. Retail alone saw the highest number, with nearly 300,000 closures, representing 29.7 percent of the total across 52 sectors.
10. Restaurants followed with 15.2 percent, followed by real estate at 11.1 percent and wholesale and trade brokerages at 7.1 percent.
11. The high rate of business closures has contributed to a rise in commercial vacancy. According to the Korea Real Estate Board, the nationwide vacancy rate for small retail spaces rose to 7.3 percent in the first quarter of this year, up 0.5 percentage points from the previous quarter.
SMALL BIZ OWNERS SEE NET PROFITS DROP 15% IN H1: POLL
1. South Korea's small businesses saw their net profits shrink significantly from a year earlier in the first half amid a slowing economy, a poll showed Thursday.
2. According to the survey of 500 self-employed small business owners, their net profits over the past six months fell 15.3 percent on-year.
3. Sales dropped at a similar rate of 15.2 percent from a year earlier.
4. The most cited challenge for businesses owners was shrinking consumer demand, followed by rising materials costs and increasing rent and taxes.
5. Meanwhile, respondents expressed a grim outlook for the next six months, with more than 60 percent saying they expect both sales and net profits to decline in the second half.
6. Of the respondents, 44 percent said they were considering closing their businesses in the next three years.
7. The survey was commissioned by the Federation of Korean Industries, and was conducted by local polling agency Mono Research from March 13 to 23. (Yonhap)
MAY 2025, SOUTH KOREA TO HELP SMALL, MEDIUM-SIZED FIRMS HIT BY TARIFFS
1. The measures include financing support worth 4.6 trillion won ($3.25 billion), subsidies to ease the burden of logistics costs, and other policies to help expand export markets.
2. While their exports accounted for 17% of South Korea's total exports in the first quarter, 81% of small and medium-sized enterprises considered themselves vulnerable to 25% tariffs introduced by the Trump administration in early April but later suspended for 90 days, the government said in a statement.
3. Earlier this month, South Korea approved an extra government budget of 13.8 trillion won, including spending plans for tariff responses, to bolster an economy grappling with weak domestic demand and the potential impact of U.S. tariffs.
($1 = 1,416.7000 won)
Source:
https://www.koreatimes.co.kr/southkorea/society/20250706/business-closures-in-south-korea-surpass-1-mil-for-first-time
https://www.koreaherald.com/article/10528465
http://reuters.com/world/asia-pacific/south-korea-help-small-medium-sized-firms-hit-by-tariffs-2025-05-14/
