'I go there twice a month': 70% of Korea's spending now happens in Seoul

Passengers at Wonju Bus Terminal in Gangwon wait to board a bus to Seoul at 11 a.m. on March 1. [JEONG JIN-HO]

 
A long line of passengers waiting to take the bus to Seoul snaked around Wonju Bus Terminal in Gangwon on March 1. Seoul-bound buses left every five to 10 minutes, but all seats were booked in the morning that Saturday.
 
Twenty-year-old university student Jin Hyeong-kwon was part of the crowd waiting to take an express bus, to visit an exhibition at the Leeum Museum of Art in Yongsan District, central Seoul.
 
“I like exhibitions but they’re all held in Seoul so I go there at least twice each month,” Jin said.
 

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The competition to purchase bus tickets to Seoul on weekend mornings is fierce at most terminals outside of the greater Seoul area. The express bus mobile app on March 1 showed that Seoul-bound buses leaving from Jeonju and Gunsan, North Jeolla; Chungju, North Chungcheong; Gongju and Dangjin in South Chungcheong; and Sejong, all marking journeys of two hours or more, were all sold out.
 

The express bus mobile app on March 1 shows that Seoul-bound buses leaving from Jeonju and Gunsan, North Jeolla; Chungju, North Chungcheong; Gongju and Dangjin in South Chungcheong; and Sejong, all marking journeys of two hours or more, are all sold out.[SCREEN CAPTURE]

 
Cultural institutions, such as concert halls and exhibition halls, as well as hot spots for spending, like department stores and shopping malls, are all concentrated in Seoul, prompting even people who live outside of the capital city to spend their money there too. Almost half, or 45.2 percent, of all sales by credit and debit card took place in Seoul last year, according to a BC Card report on regional spending commissioned by the JoongAng Ilbo.
 
A further 21.1 percent of card sales occurred in Gyeonggi, bringing up the total value of card transactions in Seoul and Gyeonggi alone to account for 66.3 percent of the whole country's. Adding the 3.7 percent represented by Incheon and the greater Seoul area proportion brings the total to 70 percent.
 
Spending is increasingly concentrated on Seoul. All of Korea's municipalities but Seoul, Daejeon and North Gyeongsang had the same or less card spending in 2024 than they did the previous year. Notable cases include Daegu, which accounted for 3.3 percent of nationwide card transactions in 2024 and 3.8 percent in 2023; North Chungcheong, which claimed 1.7 percent in 2024 and 1.9 percent in 2023; and North Jeolla, which held 1.5 percent in 2024 and 1.9 percent in 2023. Seoul, on the other hand, gained 2.8 percentage points over the period, from making up 42.4 percent in 2023 to 45.2 percent last year.
 

 
A total of 14.317 million people were working in the capital city or its surrounding Gyeonggi and Incheon as of January, making up 51.6 percent of the nation’s 27.743 million active workers.
 
More than half of Korea’s population lives in greater Seoul, explaining the large amount of money spent in Seoul, but spending is becoming concentrated in the area at the cost of other regions.
 
Cultural, medical and shopping infrastructure are all concentrated in Seoul, sucking in spenders from Gyeonggi, Incheon and even from outside of greater Seoul. There were 82,160 performances held in Seoul last year, making up 65.6 percent of all events held nationwide, according to the Ministry of Culture, Sports and Tourism. The capital city also has the most doctors and cultural facilities per capita compared to other regions.
 
Regional economies collapse first
 
This, doubled with the recession, has devastated regional economies.
 
Last year, out of all municipalities, Incheon had the highest service production index — a measure of output in the service industry used to determine how well mom-and-pop stores are doing — of 126, compared to 100 in 2020. Seoul came second with 123.3.
 
Greater Seoul’s service production index has continuously climbed every year since 2020, in stark contrast to Sejong, South Gyeongsang, North Gyeongsang, North Jeolla, South Chungcheong, South Jeolla, North Chungcheong and Gangwon, whose indexes fell on year by 3.1, 2.7, 1.1, 1.1, 1.1, 0.8, 0.5 and 0.5, respectively.
 
The widening gap in domestic demand in Greater Seoul and the regions outside it can also be seen through the commercial vacancy rate. Seoul, Gyeonggi and Incheon’s commercial vacancy rates were, respectively, 8.9 percent, 10 percent and 12.7 percent in the fourth quarter of last year, all lower than the nationwide average of 13 percent, according to the Korea Real Estate Board.
 
On the other hand, Sejong, North Chungcheong, North Jeolla and North Gyeongsang had much higher vacancy rates, more than double those of Seoul’s, with 24.1 percent, 19.5 percent, 18.9 percent and 17.8 percent, respectively.
 
“There are a lot of places that only require maintenance charges or have cut down monthly rent to 500,000 won [$350] from 2 million won,” a worker at a real estate agency in Daepyeong-dong, Sejong, said.
 
“The perceived vacancy rate is over 40 percent,” the insider said, adding that this was due to “more small businesses closing down after times got tough.”
 

A vacant shopping center in Eojin-dong, Sejong, pictured on March 6, is shuttered down. A sign directing potential business owners interested in renting space is hung up in the window. [IM SOUNG-BIN]

 
The need for jobs outside of the greater Seoul area
 
Self-employed people make up a larger portion of workers in regions outside of the greater Seoul area, where corporate jobs are few. Last year’s self-employment rate in Seoul, 15.5 percent, was lower than the nation’s average of 19.7 percent; in South Jeolla and North Gyeongsang, the dependence on self-employed businesses was higher at 30.8 percent and 28.9 percent, respectively.
 
This leads to concerns that sluggish demand will reduce self-employed businesses’ income, leading to less capacity for consumption in the region.
 
Some experts are calling for more salaried jobs in locations outside of greater Seoul. At a time when people are even going on trips to Seoul just to spend their money, the absence of jobs could lead to a vicious cycle of dropping population numbers and less revenue for self-employed workers. Experts say incentives must expand for businesses to move outside of greater Seoul or to launch new enterprises.
 
“Measures that will help companies relocate out of greater Seoul, such as relaxing regulations or tax cuts, should be implemented,” said Chung-Ang University economics professor Lee Jung-hee.
 
“It is only jobs that will bring people in and spur spending,” Lee said.
 
“Self-employed businesses are currently the main economic pillar of regions outside of greater Seoul, so sluggish domestic demand has crippled their entire economies,” he added.

BY JEONG JIN-HO, IM SOUNG-BIN [kim.juyeon2@joongang.co.kr]