The spate of tanghulu shop closures in South Korea is a foretold tragedy. (Image courtesy of Unsplash)
SEOUL, May 29 (Korea Bizwire) – The spate of tanghulu (Chinese candied fruit skewer) shop closures in South Korea is a foretold tragedy. An analysis shows that tanghulu sales peaked in September 2023, just six months after the trend took off, and have been rapidly declining since.
The fleeting nature of fad food businesses like Taiwanese castella cakes and brown sugar boba tea, which briefly ignite before fizzling out, has resulted in high closure rates among small business owners. This cycle imposes significant societal costs, prompting calls for fundamental solutions.
According to BC Card’s merchant sales data analysis, nationwide tanghulu sales surged from April 2023, reaching their zenith in September of that year. Within those six months, sales volumes soared 5.3-fold, while customer numbers grew 5.2 times.
However, from October onward, both sales and customer numbers began to plummet, a downward trend that persisted through April of this year. The months with the steepest declines were November and April, when sales dropped 28% and 27% respectively compared to the previous month. Contrary to expectations of a sales rebound with warm weather, none materialized.
While the number of tanghulu shops mushroomed, sales figures have now returned to early-trend levels. Government licensing data revealed that out of the 1,795 tanghulu shops nationwide as of May 27, a staggering 75% opened just last year.
Experts point out the recent surge in tanghulu shop closures was foreshadowed as early as eight months ago. Even after peak sales, new shops continued opening, intensifying competition. While only 72 tanghulu shops closed in 2023, 136 have already shuttered this year. Of the 73 shops that opened this year, 21 have already gone out of business.
Analysts warn the pattern of fad food businesses briefly igniting before fading is likely to continue. Unlike more versatile foods like coffee or malatang, tanghulu’s novelty wore off quickly as it lacked scalability to incorporate other items.
Some cite the excessive influx of prospective small business owners as a structural issue. As an increasing number of individuals retire prematurely without sufficient savings, many are enticed by the allure of get-rich-quick schemes. However, this trend leads to a cycle of frequent business openings and closures, imposing significant societal costs.
Ashley Song (ashley@koreabizwire.com)
