As the number of foreign visitors to South Korea rises, the country's foreign card sales are rapidly increasing. However, a significant portion of this spending is concentrated in specific sectors, such as dermatology and Olive Young, indicating that the benefits of foreign consumer spending are not evenly distributed across traditional markets and local businesses.
On August 24, Korea Credit Data (KCD) analyzed approximately 328,000 merchants linked to Cashnote with foreign card payment histories. The data revealed that foreign card sales in June 2023 increased 9.6 times compared to January 2023. The share of foreign card sales in total card sales also grew sixfold during the same period, from 0.2% to 1.2%.
The benefits of increased foreign spending are concentrated among a small number of merchants. The top 1% of merchants accounted for 66.9% of total foreign card sales. When expanding the scope to the top 10%, their share reached 90%. In contrast, the bottom 90% of merchants received only 10% of the total foreign card sales.
Foreign spending is particularly focused on the beauty, medical, dining, and retail sectors. Further analysis of the top 1% of foreign card merchants by KCD showed that the service industry represented the largest share at 53.8%. Dining followed at 28.3%, and retail accounted for 14.8%. Within the service sector, dermatology made up 46.0%, while plastic surgery represented 15.7%.
The high average spending in the beauty and medical sectors has contributed to the increased sales for certain merchants. The average foreign customer spending in the service sector was 166,000 won, which is 3.5 times higher than the 47,000 won spent by domestic customers. In the health and medical sector, the average spending by foreigners was approximately eight times that of locals.
In retail, foreign spending is concentrated in specific stores like Olive Young and Daiso, located in major tourist areas such as Myeongdong and Hongdae. Among Seoul's key commercial districts, the highest foreign card sales were recorded in Myeongdong, Namdaemun, and the area around Sinnonhyeon Station, followed by Gangnam Station, Hongdae, Yeonnam-dong, and Itaewon.
On August 19, a reporter observed that 100 customers entered the Olive Young Myeongdong Town and 107 entered the Daiso Myeongdong flagship store within 10 minutes. Both stores were bustling with foreign tourists. An Olive Young representative noted that some Chinese tourists spend up to 2 million won in a single transaction.
However, the benefits of foreign spending have not sufficiently reached traditional markets and local businesses. While foreign card sales accounted for 13.9% of total sales in tourist special zones, they only represented 2.5% in traditional markets and 1.4% in local business districts.
Experts suggest that to expand foreign consumer spending into traditional markets and local areas, improvements in multilingual guidance and overseas payment infrastructure are necessary. Shin Hak-seung, a professor of tourism at Hanyang University, stated, “One of the main motivations for foreign tourists visiting Korea is their interest in Korean pop culture and lifestyle formed through K-culture. To spread foreign tourist spending to traditional markets and local areas, it is essential to enhance awareness of these areas and improve service reliability, as well as the convenience of payment methods like foreign cards and mobile payments.”
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.