Early Cup Exit Has Economic Impact

Immediately after Korea lost the World Cup match with Switzerland with a 0-2 score on June 24 that could have led to the round of 16, a TV ad for KTF showed a scene with the national football players leaving the stadium with defeated looks was accompanied by the words “We are sorry. We cannot hold our heads up.”

Then a scene of the Red Devils clapping was accompanied by the words, “That’s all right. You are still our champions, and will be.”

If the team had won the match, the words would have been changed to the following.

“Who had called our offense weak. Who had called our defense weak. We are 48 million voices united.”

KTF had pre-produced two advertisements according to the two different possible scenarios. Kim Tae-hae, director of advertisement planning department at Cheil Communications, said, “It would have been nicer to air the jubilant version. I’m sorry to see that the ad effect will be reduced dramatically.”

The ad industry profited immensely by changing ads or introducing a variety whenever Korea advanced from match to match.

As the World Cup heat that had captured the nation for more than half a month ended in the national team’s defeat, industries that had been involved in the World Cup marketing have been affected accordingly.

Distribution industry in a dilemma-

Having enjoyed unprecedented windfalls, the distribution industry was vastly disappointed.

The 24-hour convenience stores at Seoul Plaza in front of Seoul City Hall and the Gwanghwamun area that had enjoyed unprecedented profits from the large-scale all-night street cheers is very disappointed. GS-25 estimated the average sales of 46 of its chain stores in the district where large numbers of supporters gathered during the matches to be five times the normal sales.

The Deoksu branch near Seoul Plaza recorded 25 million won in sales in a single day on June 13 (match with Togo), and 33 million won on June 24 (match with Switzerland), more than 10 times the normal sales.

Home-shopping industries were also disappointed. Ordinarily, broadcast sales from 2:00-5:00 a.m. are only 30 million won per hour, but on the nights of the Korean team’s matches, sales jumped ten-fold.

The clothing businesses producing the Red Devils t-shirts are wondering how to get rid of their stock on hand. Seo Young-jin, who is in charge of marketing at Basic House, said, “We are thinking about whether to donate the remaining t-shirts to welfare organizations, or sell them at a cheaper price.”

Happier Tourism and Culture Industries-

On the other hand, the tourism and culture industries will fare better. The tourism industry had to bear the brunt of the World Cup fever. A tourist agency employee said that “because of the World Cup, the number of international visitors was reduced 20 to 40 percent,” and added that “because the Asian countries were all eliminated, we are projecting that more tourists will visit Korea.”

The moribund culture industry is also starting to revive. The performance industry is relieved that Korea failed to make it into the next round. The online company that sells performance tickets, Ticketlink, estimated that the booking rates for musicals and plays were reduced 20-30 percent after the World Cup commenced. With the reduced number of audiences, some theaters that changed their purpose for indoor cheering areas have also returned. A source from CGV, a multiplex chain, said “Some movies actually put off their opening because of the World Cup,” and projected that “With the turn of the World Cup heat, and with vacations ticket booking rates will return to its normal rate.” The film industry saw ticket sales reduction of 40 percent during the Korea-Japan World Cup in 2002, but estimated that the hit was less severe this year, with only a 10 percent loss in number of audience. Publishing companies that reduced the number of new publications due to the World Cup will also return back to normal.

Estimated Economic Effects Upon Advancing to the Round of 16-

The Hyundai Research Institute and Korea Economic Research Institute projected that with Korea advancing to the round of 16 would have come an economic effect of approximately 16 trillion won.

The projection comes from anticipated effects of a surge of brand recognition of official World Cup sponsors and participating companies, recognition of major companies such as Samsung and LG, reduction of corporate marketing fees, increase in exports, and enhanced national image. Park Jae-hang, head of the brand marketing institute of Cheil Communications, said that “for domestic companies that have not advanced into Europe, the World Cup in Germany was a good opportunity to promote their brand image, which is why we are disappointed.”