Electronics Mecca Fading

Electronics Mecca Fading


An increasing number of closed stores are eating up the corridors of Sunin Sanga, one of the biggest and oldest buildings of Yongsan Electronics Market. The economic downturn and emergence of online shopping sites have killed the vibrancy at the country’s largest electronics market.
/ Korea Times Photo
by Kim Tong-hyung
Yongsan in Hard Times Due to Slow Economy, Better Rivals

By Kim Tong-hyung
Staff Reporter

The three-month window from January to March is usually the busiest time of the year for retailers at Yongsan Electronics Market. However, the country's undisputed Tech Mecca isn't bustling like it used to.

Park Soon-mi, 51, has been selling keyboards, mice, Web-cameras and other computer accessories for nearly 20 years in a small shop she runs with her husband in Sunin Sanga, one of the market's biggest and oldest buildings.

Although she is hesitant about calling the recent months the worst time ever, as the memories of the late-1990s financial crisis are still painfully fresh, Park is tempted to when she sees a growing number of closed stores eating up the hallways.

``We seem to have fewer visitors everyday, and those who actually come here are extremely picky about opening their wallets,'' said Park, who says her sales have dropped by more than 20 percent since the first-half of 2008, before the current economic turmoil took hold.

``Some stores are more affected than us, as we sell smaller items. But the margins are much lower than before, as customers are looking only for the cheapest products and we have to compete with online shopping sites as well,'' she said.

It would have been difficult to imagine that Yongsan Electronics Market, a spiraling empire comprised of over 20 buildings and more than 5,000 stores, rivaled only by Tokyo's Akihabara as Asia's biggest electronics market, would struggle so much to remain relevant.

Established in the mid-1980s, the Yongsan market has since earned a reputation as the ultimate geek's paradise and the heartbeat of the country's expanding information technology (IT) industry and culture.

It has always boasted a dizzying diversity of products, with almost anything related to computers, software, hardware and appliances available.

Its thousands of stores and street vendors were packed with students and office workers on weekdays searching for the best deals on custom-made computers and laptops.

Weekends brought hoards of gadget lovers on pilgrimages for just about anything, from bootleg CDs to computer parts, game machines, digital cameras and cell phones.

However, the intensity and excitement that typified the past were strikingly absent on a recent visit, with the specter of a disappointing future hanging over dejected faces.

Yongsan retailers have struggled to compete with emerging online rivals in recent years, with sites such as Danawa (danawa.co.kr) replacing them as the reliable source for the cheapest products, not to mention saving customers from an overwhelming downtown trip.

And the recent collapse in consumer spending and the freefall of the local currency have simply been a kick in the teeth.

The Yongsan market is now faced with an awkward identity crisis, as it becomes less of a consumer hub and more of a tourist attraction. Visitors from Japan, China and Southeast Asia seemed to match the number of locals at Sunin Sanga and the nearby Electro Land shopping mall on Sunday, many of them bargaining deals in abbreviated Korean and broken English.

``It seems like more Koreans are buying their products online, while foreign tourists and expatriates, who don't have the same access to online deals, are the ones taking a harder look at the shelves,'' said Park, who says Web-cameras are among the popular items for her foreign customers, who use them for video chatting with friends and family members overseas.

Lee Cheon-mok, who co-owns a digital camera shop at Electro Land, says about 40 percent of his weekend customers are foreigners.

Although the sliding value of the Korean won has clearly upped the buying power of foreigners, their spiked spending doesn't come close to making up for eroding sales to local customers, Lee said.

``I get a lot of Japanese tourists who come here to buy digital cameras and gadgets like the Apple iPod media player, which happen to be cheaper here,'' said Lee.

``Right now is the traditional high-demand season, when schools start their new semesters and first-year employees start working. However, our shop's revenue dropped nearly 20 percent from a month earlier, and I can't see a logical reason to hope that things will pick up as we move toward the summer,'' he said.

Obviously, many have it worse than Lee, whose bright, neat shop is right next to the second-floor escalator. Shin Sung-yong, who sells digital cameras and other electronic devices in a corner of Terminal Sanga, which is connected to Yongsan Station ― a major train and railway station, says he hasn't sold a camera over the past two days.

``I earned just over 50,000 won today,'' he said.

Inevitable Becomes Reality

Perhaps the hard realities of Yongsan Electronics Market are best reflected in the aging walls of the unsighty Sunin Sanga, which used to house more than 1,300 stores but many have closed in recent months.

Most of the retailers at Sunin Sanga are dedicated to computer parts and custom-made computers, and are thusly more affected by the falling value of the local currency, which drives up the prices of CPUs, graphic cards and other components. The won tumbled to a three-month low last week, breaching the 1,500-won mark for the first time since last November, and the plummeting rate has consumers suspending plans to replace old computers. Danawa said computer part transactions on its Web site last month had dropped more than 20 percent compared to a year earlier.

The effect is more severe at Sunin Sanga, where orders are vanishing at a faster clip. The first floor of the building still manages to be modestly lively, but there's an almost disturbing quiet in the upper floors' corridors, where the number of empty shops has increased.

The northeast wing of the building, which has a heavy concentration of second-hand computer shops, is a rare area where business remains strong, as consumers continue to look for the cheap and cheaper.

Nonetheless, the overall lack of vibrancy is evident. Yongsan's famously aggressive salesmen, or ``yongpali,'' who once made Mark Twain's account of Egyptian merchants seem generous, no longer seem half as annoying as they used to.

``More retailers are giving up and their stores are back up for rent, but many of them remain empty as few want to do business here anymore,'' said an official from the Sunin Sanga retailers' committee.

``I do hope things get better as the economy rebounds, but it's doubtful that the Yongsan Electronics Market will be as glorious as it was in the past. The price competition triggered by online sites has shrunk margins and brought permanent changes in consumer habits, and the recent economic downturn is accelerating the transition,'' he said.

thkim@koreatimes.co.kr