The business of going out of business booms in South Korea

You Young-sik has tried his luck running businesses, but after his convenience store, a sausage factory and a second-hand furniture shop all failed, he realised he had found a niche, one that he understood well: helping people go out of business.

You says he is now busier than ever due to the resurgence of the coronavirus, tearing down sign boards and removing cash registers from shuttered hair salons, barbecue buffets and other enterprises whose business model was based around human contact.

“This is my busiest year so far, having done this for 10 years. Inquiries are about four to five times higher,” said the 54-year-old liquidation specialist, who added that his business started taking off about two years ago as a street-level economic downturn began.

“I can’t do them all but I still take about twice the work I used to, which is why I need to head out at 4 or 5 in the morning,” said You in the city of Suwon, south of Seoul, as he answers telephone calls and tightens ropes around tables and chairs on his truck.

Tough social distancing rules to curb a second wave of coronavirus have markedly slowed retail traffic and emptied cafes across Seoul since mid-August.

The tables and chairs that You collects from closing businesses will end up in recycled kitchenware shops, such as Dajoobang in a run-down part of Seoul’s Hwanghakdong area.

“Our 600-pyeong (21,350 square feet, 1,984 square metre) storage warehouse has been completely full for about two months,” said Cho Gye-su, a 53-year-old manager at Dajoobang.

“Second-hand goods have been piling up and we have nowhere to sell them to, so the coronavirus has been really bad for us,” said Cho, pointing to used fridges, rice cookers and waffle makers all cleaned up and displayed in glass racks.

Family retailers battered

The inventory glut at recycled kitchenware stores and booming liquidation businesses points to battered family retailers in every corner of the country.

While policymakers brag that retail sales returned to growth in June and per-day exports recorded the slowest decline in seven months in August, small businesses are failing at a rate not seen since the global financial crisis, data from Statistics Korea shows.

The hardest-hit sectors in Asia’s fourth-largest economy include hospitality, retail and restaurants, which are traditionally small, family-run businesses.

South Korea has among the world’s highest proportion of self-employed people, comprising about 25 percent of the job market, leaving many of its citizens vulnerable to downturns. A 2017 Bank of Korea study showed only 38 percent of the self-employed businesses survive three years.

 

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