Three out of 10 online shopping malls close in one year: Report

Three out of 10 online shopping malls close in one year: Report

최초입력 2025.04.30 14:41:00

Three out of 10 online shopping mall startups in South Korea shut down in just one year of operations, data showed on Tuesday.
According to a report released by the National Tax Service, the telecommunication sales industry had the lowest survival rate at 69.8 percent among the 20 most common lifestyle business sectors in the country as of 2023.
This category includes online shopping malls, home shopping, and other non-face-to-face sales of goods and services.
The three-year survival rate for telecommunication sales businesses stood at 45.7 percent and the five-year rate was just 33.6 percent during the cited period.
The report noted that the industry’s low entry barriers and minimal initial capital requirements appear to have led many aspirants to enter the market without sufficient preparation.
The overheated competition fueled by a surge in new entrepreneurs was also cited as a major factor.
The ultra-low-price strategies from Chinese e-commerce platforms such as AliExpress, Temu, and Shein further impacted the industry.
“The period of rapid growth for online shopping malls is over, and the market is now saturated,” said Lee Eun-hee, a professor of consumer and child studies at Inha University. “It will be difficult to compete with Chinese collaborative commerce (C-commerce) players in a market where prices are contested down to the last 100 won ($0.07).”
In January 2025, singer-turned-entrepreneur Kim Jun-hee announced the closure of her fashion shopping mall, which once generated 10 billion won in annual sales.
She cited rising material and labor costs and squeezed margins due to efforts to maintain pricing.
Despite the difficulty of survival, the low barrier to entry continues to attract new entrepreneurs.
There were 211,275 new entrants into the telecommunication sales industry as of 2023 -more than any other lifestyle business category.
This sector has ranked first in new business registrations for the past five years.
It also had the most number of businesses, with 640,603 as of February, according to the Korean Statistical Information Service (KOSIS).
Meanwhile, the business types with the highest one-year survival rates were hair salons (91.1 percent), pensions/guesthouses (90.8 percent), and convenience stores (90.3 percent) as of 2023, while the lowest were telecommunication sales, followed by cosmetics shops (74.2 percent) and grocery stores (77.3 percent).
When expanding the scope beyond the top 20 to the top 100 lifestyle business sectors, the average first-year survival rate showed a gradual increase from 2019 to 2022 but dipped in 2023.
According to the National Tax Service, the one-year survival rate rose from 77.8 percent in 2019 to 79.8 percent in 2022 but fell to 77.9 percent in 2023.
The number of businesses that filed for closure in 2023 reached 986,487, the highest since records began in 2006.
This is believed to reflect the increased operational burden due to high interest rates and inflation.
Although the figure includes corporate businesses, the report noted that it largely reflects deteriorating conditions for self-employed individuals.
There is also a negative outlook on the number of business closures reported for 2024, which is set to be announced in June 2025.
According to Statistics Korea, the number of self-employed people fell by 32,000 to 5.66 million in 2024 - the first decline since 2021.
With under 1 percent growth projected in 2025, business operations are expected to remain difficult, sources said.
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Three out of 10 online shopping malls close in one year: Report

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