During the last several years, the global economy has seen an increase in the distribution and consumption of Korean entertainment and products. A key example is “Squid Game,” a Korean Netflix series that was released worldwide in 2021. It was instantly an international phenomenon and quickly became Netflix’s most-watched series. “Squid Game” followed the highly popular Korean movie “Parasite,” which came out in 2019 and was the first Korean film ever to win the Academy Award for Best Picture.
Korean entertainment has been expanding globally over the last few years and saw an upsurge during the COVID-19 pandemic as the world hunkered down and watched more streaming services than ever. However, consumption of K-content is hardly new. K-pop, Korean soap operas, and Korean beauty products have been consumed in large quantities by the U.S. and many other major economies for over a decade.
As the world watches Korean entertainment and consumes its products from afar, how does this translate to the country itself? In the last few years, the popularity of K-content has started to revitalize the retail market in Seoul and bring in a whole new type of consumer.
The rise and growth of K-content
“K-content” refers to the many types of Korean cultural elements and aspects of the Korean lifestyle being consumed by the rest of the world as they’re translated into entertainment and consumer goods. The spread of these elements is influencing the make-up of the Korean retail market, specifically in Seoul. Many products, services, and activities, ranging from media content to home goods, are transforming the size of products, what’s produced and available to buy, and the consumer profile for the Korean marketplace. Global consumption of K-content has expanded beyond music and TV to art, fashion, beauty, sports, food, retail, and leisure.
The K-content worldwide market continues to grow and perform well. The total size of the content market has experienced annual growth of 5%, and global sales of the content created in Korea have seen rapid annual growth of 22%. The industry has been successful thanks to the evolution of the information and communications technology (ICT) environment and online platform services, as well as online shopping.
Some of the key drivers of growth stem from the demands for instant content globally and the ability to interact with each other directly without intermediary challenges, making it possible for K-content to be available to people anywhere in the world. The content has come at a time when diversity and unique storytelling are important to many people. This is the era of platforms where on and offline borderless environments allow people to communicate in real time. There’s also been an increase in investment for foreign and domestic-produced content from major enterprises.
How has K-content affected the retail market?
Worldwide communication and distribution of K-content have made the lifestyle it projects desirable to retail clients in several ways. First, in the design and enhancement of the physical environment. Stories, key visual impacts, and related activities and products make spaces “Instagrammable” and drive property managers to create immersive environments that enhance the guest experience.
With these elements, the property gains the consumer’s attention and interest via social media, making the potential guest want to visit the property and become immersed in the environment, increasing the desire to visit and stay longer. And as guests stay longer, they spend more and interact more with the brands and content.
K-content as a catalyst of retail advancement
While the total population of Seoul is decreasing due to the development of suburban residential hubs and better urban transportation, the business market and its centers in the city are growing. One explanation for this is that the recent popularity of K-content has increased the number of foreign visitors to Seoul. Tourism peaked in 2019, right before the COVID-19 pandemic, at 13.4 million visitors. Experts predict that that number will recover by 2024 and gradually increase to 30 million by 2030. While most visitors are from Asia, tourism from the U.S. is over 20% of that total, with Europe trailing at about 12%. And these numbers are on the upswing.
The vacancy rate in Seoul for retail properties is the lowest among other regions in Korea, averaging about 9.5%. Now that properties are seeing an uptick in the length of the average consumer visit and main drivers are emerging, retail complexes have capitalized by fostering these drivers. Trends include going green for sustainability and to promote guests’ wellness in the environment and creating multi-sensory experiences in pursuit of “retail-tainment.” Another trend is the rise of pop-up stores in collaboration with artists.
Seoul has six major commercial areas, ranging from the more traditional Myeongdong to the newer area of Hongik University, an up-and-coming neighborhood known as the “hipster’s playground.” Both locations are currently flooded with “Squid Game” merchandise, exploiting the series’ success as tourists return to the city. Gangnam is Seoul’s well-known central business district, but it’s also rising as a retail location and, of course, was popularized by the international Billboard hit “Gangnam Style.” While commercial areas experienced a rapid increase in vacancies during the COVID-19 pandemic, this rate is steadily decreasing due to the recovery of the retail market. Specifically, department stores, integrated shopping complexes, neighborhood community shopping centers, and high street retailers have seen the biggest increases in value.
Wide expansion of K-content and lifestyle culture has enabled retail properties to evolve into hybrid business models and increase the value of retail spaces through unique concepts and storylines. Some examples of this are Lotte and Shinsegae Starfield, top players in the retail market with their own integrated shopping complexes in Seoul. They focus on enhancing the guest experience in combination with K-content and cultural features. Another example is the Hyundai Seoul, which pursues continuous changes as a retail-tainment therapy destination for consumers, employing a micro-segmentation strategy. Their flagship stores and pop-ups are themed experiences that spread into major retail areas.
Predictions for Seoul retail
Seoul retail will show continuous growth in value through innovative and experimental changes to the commercial environment and the creation of hybrid business models. Even though retail supply growth is expected to be stagnant, the value of the properties will continue to rise due to value enhancement via guests’ content experiences. This will result in Myeongdong returning to its pre-COVID status as a key destination for K-content tourism. Flagship stores, in collaboration with well-made content, will grow as brand interaction becomes a top consideration for retail.