{"id":2203974,"date":"2024-02-27T19:12:11","date_gmt":"2024-02-27T10:12:11","guid":{"rendered":"https:\/\/koreapro.org\/?p=2203974"},"modified":"2024-02-28T17:04:57","modified_gmt":"2024-02-28T08:04:57","slug":"why-south-koreans-pursue-convenience-store-dreams-in-an-oversaturated-market","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/02\/why-south-koreans-pursue-convenience-store-dreams-in-an-oversaturated-market\/","title":{"rendered":"Why South Koreans pursue convenience store dreams in an oversaturated market"},"content":{"rendered":"
As of Aug. 2023, South Korea is home to <\/span>more than 55,000 convenience stores<\/span><\/a>, surpassing even the number of restaurants that <\/span>McDonald\u2019s operates<\/span><\/a> around the world. This extraordinary density of convenience stores leads to significant challenges, notably fierce competition in urban areas due to market saturation.\u00a0<\/span><\/p>\n Many of these establishments find it difficult to sustain their operations as a result, with a significant number going out of business within their first year. Despite this, the cycle continues unabated, as new franchisees are always ready to step in and replace those that have closed.<\/span><\/p>\n This perverse dynamic points to deeper problems in the South Korean economy that drive people to seek out opportunities in an already crowded sector, one in which small-business owners inevitably find that the odds are stacked against them.<\/span><\/p>\n SELF-EMPLOYMENT<\/b><\/p>\n Part of the reason that the convenience store sector in South Korea continues to grow is the challenging job market.<\/span><\/p>\n In South Korea, about <\/span>20%<\/span><\/a> of the workforce is self-employed, and many of them opt to start their own businesses. Of those, the number of self-employed South Koreans over the age of 60 <\/span>surpassed 2 million<\/span><\/a> for the first time last year.<\/span><\/p>\n The journey toward self-employment for many South Koreans begins with the harsh realities of the job market. According to a <\/span>May 2023 survey<\/span><\/a> conducted by Statistics Korea, the average retirement age is 49 years old, with many leaving the workforce for various reasons such as business downturns, deteriorating health and family obligations.<\/span><\/p>\n When individuals leave the workforce, they often face limited opportunities for re-employment that match their previous salary or status, which compels them to seek alternative avenues for income.<\/span><\/p>\n This shift toward self-employment is particularly visible in sectors such as convenience stores, coffee shops and fried chicken restaurants. These businesses offer a path for those looking to reinvent their professional lives, primarily due to their lower barriers to entry.<\/span><\/p>\n For instance, starting a convenience store does not require specialized knowledge or skills, making it an attractive option for individuals seeking to leverage their general business acumen and customer service experience.<\/span><\/p>\n Moreover, the initial financial investment required to open such establishments is relatively modest, with franchise contracts for popular brands available for as little as $15,000 (<\/span>20 million won<\/span><\/a>), with the remaining initial costs borne by the franchisor.<\/span><\/p>\n The choice of franchising, especially with well-known convenience store chains, offers additional advantages, including brand recognition and an established customer base. This brand appeal is crucial in a market where independent, unbranded stores struggle to compete against the pervasive influence of larger businesses.<\/span><\/p>\n By aligning with a recognized franchise, new entrepreneurs can mitigate some of the risks associated with starting a new business from scratch.<\/span><\/p>\n