hankyoreh

Lotte Department Store’s Myeongdong branch in Seoul reopens on Feb. 10 after closing for three days because of the novel coronavirus outbreak. (Yonhap News)

As the spread of COVID-19, the disease resulting from the novel coronavirus, slows down and more patients are pronounced fully recovered, fears concerning the virus’s impact on the real economy are deepening. Consumer sentiments are emerging from their deep slumber, with more people visiting department stores and other large retail outlets. Production facilities that previously encountered setbacks -- including domestic factories halted due to the suspended procurement of parts from China – are either resuming operations or preparing to do so. But observers are predicting more time will be needed for things to return to how they were before the COVID-19 outbreak.

As of Feb. 16, department stores and other major retail outlets were slowly emerging from the hard frost brought by on COVID-19. Over the period from Feb. 3 to 6, when COVID-19 appeared to be spreading, sales at Lotte Department Store in downtown Seoul’s Myeongdong area -- considered one of South Korea’s premier department stores -- were down by some 32% from the same period of the previous year. Consecutive closures for the three days from Feb. 7 to 9 were ostensibly intended for disease prevention -- but the measure was also a reflection of the sheer lack of customers. Over the three days after reopening (Feb. 10-12), sales were still down by 25% from the same period the previous year.

But the situation started to turn around in the second half of last week. Sales started to bounce back. On Feb. 13 and 14, they were down by 16% from the same period in 2019. In a telephone interview with the Hankyoreh, Moon Ho-ik, a senior manager at Lotte Shopping, said, “It’s going to take some time before sales normalize, but the number of customers visiting stores has begun rising again since the middle of last week.”

“At branches in places like Busan and Ulsan that weren’t considered risk regions for COVID-19, sales have been at the same level they were last year,” Moon noted.

Amid this change in consumer sentiment, Lotte Department Store launched its originally postponed weeklong Lotte Wedding Week event across all its branches as of Feb. 14. This stood in sharp contrast with the early stages of the COVID-19 outbreak, when one heavily attended event after another was being canceled. Other major retail businesses besides Lotte -- including Shinsegae and Hyundai Department Store -- are also proceeding with previously planned promotional events as of next week. Hyundai Department Store announced the same day that it would be holding a “spring living fair” event through Feb. 29 at its Apgujeong branch in Seoul and 14 other branches throughout the country.

While larger restaurants have remained quiet, smaller ones are showing signs of change. One pub in Seoul’s Mapo District was filled to capacity with no empty tables when visited on Feb. 13, despite it being after 10 pm.

“Just 10 days ago, we were pretty much empty after 9 pm. These days, people have started coming here again after work,” said an employee at the restaurant, which has eight tables and serves mung bean pancakes, aged sashimi, and alcoholic beverages.

Another high-end restaurant in Mapo District closed ahead of schedule on Feb. 14 after an unexpected rush of customers left it short of ingredients. An employee at one financial company in Seoul’s Yeouido neighborhood said, “A week ago, people were so panicked about spreading COVID-19 that they wouldn’t even shake hands. We’re still avoiding large dinner gatherings, but you’re seeing groups of coworkers getting together for drinks again after work.”

“Business dinners had been canceled before, but people are now starting to schedule them again,” the employee added.

Production facilities are also going through procedures to normalize their operations. Hyundai and Kia, which had temporarily halted operations as a suspension of factories in China led to a shortage of essential parts, are scheduled to resume full-scale factory operations on Feb. 17 and 18. Also resuming operations on Feb. 17 on two Hyundai Motor component affiliates -- Hyundai Mobis and Hyundai Wia -- and major partner companies such as Seoyon E-Hwa, Sungwoo Hitech, and Sejong.

“Our understanding is that our partner companies in China have also been equipping their factories with disease prevention systems, conducting final inspections of production facilities, and preparing to resume operations” a Hyundai Motor employee said.

“It doesn’t look like the suspension is going to go on for much longer,” the employee predicted.

As of Feb. 6, operations had already resumed at some of the Chinese factories whose closures forced South Korea’s finished car plants to shut down -- including Kyungshin, which produces wiring harnesses, and the Yura Corporation. LG Chem’s factory in Nanjing, its polarizing plate factory in Guangzhou, and its automobile material factory in Tianjin resumed operations as of Feb. 10 after an extended Spring Festival holiday closure. An SK Innovation factory in Changzhou also began operating again.

But observers are predicting more time will be needed for consumption and production to recover to their levels before the COVID-19 outbreak. As of Feb. 14, the overall operation rate at Hyundai Motor and Kia Motors was still at 60% after the reopening of the second production line at its first and fourth Ulsan factories and the second production line at its fifth factory on Feb. 13.

“We’re anticipating the operation rate will be back up to its previous levels by around the end of this month,” Hyundai-Kia said.

By Kim Kyung-rak, Hong Dae-sun, and Kim Eun-hyeong, staff reporters

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