More and more owners are trying to sell their internet café while no one wants to buy.In addition, facing the stronger regulations of the government, the whole industry itself is witnessing a crisis expanding.
The internet café business has been a good opportunity for those people who had been laid off during the financial crisis in 1998. Now, however, it is becoming another pressure on those people who feel job insecurity due to the economic downturn.
Selling attempts increased 4.5 times in a year A research conducted by JumpoLine, an online site for trading the ownership of internet café, clearly demonstrates the crisis facing the internet café business. Although the economic downturn smashed most of the self-employed, the internet café has shown the biggest increase in the number of items for sale.
The number of internet café for sale increased 4.5 times from 1,521 in 2007 to 6,858 in 2008.
Compared with restaurants for sale, directly affected by the economic conditions, increasing three times from 562 to 1,651 during the same period, it is not exaggerating that the internet café business is facing a crisis.
Kim Byung-seok, a realtor in Daehak-dong, Seoul, said, “The internet café for sale has increased dramatically in the second half. Still, no one shows up to buy.Compared with two years ago, the transactions decreased more than 30%.”
According to the National Statistics Office, Daehak-dong has the biggest number of internet café in Korea. There were 70 internet café within the area in the end of 2007. Realtors said that the number had surpassed 80 in 2006. Recently, however, it has shrunk to 50.
Noryangjin-dong is also showing the same trend. There were 60 internet café in the end of 2007. But, it has decreased by 20% since then.Possibility of massive cessation since March
Many experts say that the number of internet café will go down further. Among those internet café still running thanks to the seasonal peak, some will report the cessation of business as they lose users since March.
Cho Young-chul, director of Policy Bureau, the Korea Internet PC Association, an industry trade group, said, “Since the launch of registration system, the number of members has decreased.There were 27,000 internet café in Korea. But, recently, the number has reduced to 19,000 around the nation.”
The problem is that there is no solution. An industry insider said, “As more and more internet café are becoming larger for better service, small size café are inevitably losing their competitiveness.”Also, the boom of electronic casinos raising its ugly head again with the economic downturn is also affecting the industry.
Bureau Director Cho said, “As the electronic casinos are increasing, some people are raising their voices that the registration system should change to the license system.It is lamentable that the internet café which has contributed to Korea in becoming the world’s IT powerhouse is missing the government’s support.”