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Bad economy adds to Jongno’s tale of woe
December 01, 2003
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| Gold Town, a two-story building with wholesale jewelry shops on its first floor, stands on a narrow, dirty and dark alley next to Jongmyo Park in Jongno, Seoul. Inside the building, nearly half of the shops are empty and the silence is stifling. Clerks and shop owners are reading newspapers or chatting with each other. Phones seldom ring and customers are notable by their absence. The once-glittering emporium of Jongno, with its hundreds of tiny shops, has fallen on hard times because of a combination of economic woes, too many sellers chasing too few buyers and its own dilapidated image. And the old gold market is facing strong competition from fancier shops south of the Han River. Pushed to the wall, some jewelers talk of giving up. “Since late last year, the number of customers has decreased, and if the current situation continues longer I will have to close the shop,” said Lee Kang-whei, the owner of one of the shops. “This building had 40 jewelry shops two years ago, and we hustled and bustled to greet customers and answer phone calls with orders.” In Jongno, starting at Yeji-dong in Jongno 4 to Jonggak, there are thousands of wholesale and retail jewelry shops and hundreds of jewelry manufacturing shops. The jewelry market was begun in Yeji-dong in the mid-1980s. At that time, the market was of a modest size; after the 1997-98 financial crisis, the number of shops there soared because many stores in residential areas and in smaller cities closed during the financial crisis. Those that did not close completely moved to Jongno to huddle together for mutual support. The market then enlarged into Bongik-dong. According to an official at the Korea Federation of Jewelry Manufacturers’ Cooperatives, the number of jewelry shops in Jongno increased by 50 percent after the financial crisis; because of the great number of jewelry shops there, the Jongno District Office designated the district as a “jewelry shopping area” in 2000. But the mecca of the jewelry industry of Korea is now tarnished. About 100 manufacturers closed last summer, according to the Korean Jewelry Manufacturers’ Association. Sales at jewelry shops in Jongno plunged by about a third, some industry-watchers estimated. They said it was not easy to be precise about sales because there are no reliable statistics on the market, and there are many under-the-table deals. But you need no statistics to see that the Jongno jewelry market is struggling; clerks and storeowners have lots of horror stories. Ms. Lee began to lay off workers at her factory and shops late last year. She had 30 employees in 1999 when she started the business, but now only seven are left: four in the factory and three in the shops. The factory, which was producing jewelry for more than 15 hours a day in 2001 now has work enough to fill only six or seven hours, Ms. Lee complained. A clerk said that he greeted only about 10 customers a day; most of them, he added, want to sell jewelry to pay off bills rather than buying new pieces. That is reminiscent of the gold rush of 1998, when patriotic Koreans donated their gold jewelry to help the country overcome the financial crisis. This time, though, the sales are motivated by personal debts, not patriotism. That, the clerk said, is a sign of how depressed the domestic economy is. Most shop owners blame the economic slump for the sales decrease, but some complain that there are too many shops in one area. “Jongno is already saturated, and some of the shop owners regretted that they had moved into Jongno after the financial crisis,” said one official at the Korea Jewelry Association. “They moved into Jongno with a hope of synergy, but the competition was too much.” And new jewelry clusters with a relatively small number of shops are appearing. In Banpo, next to the Gangnam Express Bus Terminal, about 30 jewelry shops have recently opened in a nine-story building, Reborn City. That building reopened in August after remodeling, and about 120 new shops are expected to move in soon, a building manager said, adding that jewelry would be the focus of the first and second floors of the building. Before the renovation, the jewelry market in Banpo was not much different from the rundown district in Jongno. Although the Banpo market was located closer to transportation links, the building was old and very dirty and the shops were small. “We thought we could not survive if we remained that way, and decided to renovate the building to improve our image,” said Min Han-sik, the vice president of the association of jewelry shops there. The new building could not be more different from the market buildings in Jongno, and the shops are spread out rather than being crammed next to each other. “We also have a factory with four workers in this building so that we can make and mend pieces quickly,” Mr. Min said. Reflecting the general nervousness about the new wave of ethics in Korean business, he also emphasized that the jewelry market operations should be transparent, citing the recent money-laundering investigations of Jongno jewelers. Wary of the new competitor, the Jongno District Office wants to polish the image of its jewelry shopping area, starting with eliminating the “dirty and dim” image. Kim Choong-yong, the chief of the district office, admitted that Jongno looks like an anthill where customers have to wend their way through narrow alleys and paths. He said that many of the present buildings were designed and built for temporary occupancy. “So, we’re planning to clean up the area and to make it a luxurious jewelry shopping area,” he said. But there are some snags in the plans. “For example, we may have to rent land and buildings near Jongno owned by the Seoul Metropolitan government, and move the existing jewelry shops there during the redevelopment,” he continued. Like many of the shop owners, Mr. Kim is waiting for an economic recovery to boost the fortunes of the jewelers there, and he wants to have the renovations in place before then. “If we redevelop Jongno now,” he said, “the jewelry market will attract more customers when the time comes.” by Park Sung-ha |
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