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First Store is Touch Stone of Commercial District Popularity

First Store is Touch Stone of Commercial District Popularity

Posted October. 12, 2007 06:48,   


In the late 1970s and 1980s, Jongno and Myeong-dong in Gangbuk (meaning north of the Han River) were popular commercial districts; in the 1990s, Gangnam (meaning south of the Han River) was popular and in the 2000s, the neighborhoods of Ewha Womans University and Hongik University, and Shinchon are considered chic.

The above paragraph shows that the opening of first brand chain stores, domestic and foreign, is a touchstone of the popularity of commercial districts.

The preferred location for first brand chain stores differs depending on the line of business; cosmetics brands prefer the neighborhoods of Ewha Womans University and Myeong-dong, family restaurants favor Gangseo-gu, and coffee shops choose Gangnam commercial district.

On October 11, this newspaper, along with Venture Valley, analyzed 50 different domestic (33) and foreign (17) brand chains’ first store opening. There are 14 such stores in Jongno and Myeong-dong, Seoul, 13 in Gangnam (Gangnam-gu, Seocho-gu and Songpa-gu), and nine in the vicinity of Ewha Womans University and Hongik University, and Shinchon. The number of first stores in Incheon and Gyeonggi-Do totaled four.

Preferred commercial districts change with time-

According to experts on opening business and chain stores, the late 1970s saw the advent of brand chain stores that controlled and managed menus and branches.

Fast-food chain restaurant Lotteria opened its first store in Sogong-dong, Seoul, in October of 1979, followed by Burger King and KFC restaurants in Jongno in 1984.

As such, in the 1970s and 1980s, Myeong-dong and Jongno experienced the first openings of such stores. Six of the 11 other burgeoning chain stores studied opened their first stores in Myeong-dong and Jongno. And emerging new commercial district Gangnam attracted two stores (McDonald’s’ and Kisoya), with Yongsan-gu, Gwanak-gu and Mapo-gu each attracting one.

In the 1990s, the commercial area in Gangnam took off. Of the 18 different brands which opened stores during the period, six, including T.G.I. Fridays, opened their first store in Gangnam. Myeong-dong and Jongno attracted only four.

In the 2000s, with Gangnam district still remaining strong, new commercial areas emerged, such as the neighborhoods of Ewha Womans University, Hongik University and Shinchon. Niche markets also appeared on the outskirts of Seoul.

Of the 21 first chain stores opened during the 2000s, five opened in the vicinity Ewha Womans University, Hongik University and Shinchon, and five in Gangnam. During the same period, the first stores opened in Bundang, Gyeonggi-Do, Suwon and Incheon.

Director Lee Sang-heon of Venture Valley explained, “Starting in 2000, small and medium chain stores, on top of large chain stores, cropped up in Jongno and Gangnam, saturating the area. Small and medium chains couldn’t open in the hottest commercial areas, where rent is exorbitantly high. For this reason, commercial districts are divided into several groups.”

Favored commercial districts differ depending on the line of business-

Three family restaurant chains opened their first store in Gangseo-gu. VIPS, which opened its first store in Deungchon-dong, Gangseo-gu, said “Our main customers are families. So what was important in deciding the location was the existence of large scale apartment complexes, such as Mok-dong, in the neighborhood.”

Family restaurants that require large store space do not need to go into major commercial areas, paying high rent.

Chain stores, whose main customers are females, such cosmetics brands such as Missha and the Face Shop, and other ice cream and donut brands, opened their first stores near Ewha Womans University and Myeong-dong.

A Missha official said, “Our company started to grow after we began Internet sales, which lead to subsequent word of mouth promotion among women in their 20s. Ewha Womans University neighborhood is packed with the most 20-something females.”

Because of this, experts on starting a business even say that if you are successful near Ewha Womans University, you can thrive anywhere. Since female college students are very picky customers and are sensitive to latest fashion, companies use the area as a proving ground for their new products.

Coffee chain stores, except for Starbucks that opened its first store in Myeong-dong in 1999, tend to open their first stores in Gangnam. The Coffee Bean and Tea Leaf opened its first store Cheongdam-dong, Gangnam-gu, Holly’s Coffee and Tom&Toms launched their first stores in Gangnam.

The reason why Lotteria, Burger King and KFC launched their first stores in Jongno is that it has a large floating population due to the high concentration of private academies in the area.

Some analyses have it that some foreign chain stores such as Dunkin Donuts and Pizza Hut chose Itaewon-dong to make inroads into the Korean market as Itaewon has a large floating foreign population.

larosa@donga.com parky@donga.com