BUSINESS

S. Korea’s credit card spending on Japanese brands halves amid boycott

By Jung Min-kyung
  • Published : Aug 15, 2019 - 14:27
  • Updated : Aug 15, 2019 - 14:27

South Korean consumers cut back their credit card spending on products sold by Japanese brands here by nearly 50 percent as of end-July, a report by the nation’s financial watchdog showed Thursday.

According to the report released by an opposition lawmaker, the combined card spending plummeted to 4.9 billion won ($4 million) in the fourth week of July, from 10.2 billion won in the last week of June.

On-year, the combined credit card spending on Japanese products sold in Korea, fell 48 percent in the fourth week of July.
 
A Uniqlo store in Seoul (Yonhap)

The report analyzed the spending pattern of subscribers of eight major credit card issuers -- KB Kookmin, Lotte, Samsung, Shinhan, Woori, Hyundai, BC and Hana.

The Japanese brands included casual clothing chain Uniqlo, footwear retailer ABC Mart and houseware brand Muji.

Among the brands, Uniqlo saw the steepest decline of 70.1 percent, with the combined spending falling to 1.8 billion won in the fourth week of July from 5.9 billion won in the last week of June.

In the same period, Muji and ABC Mart saw a 58.7 percent and 19.1 percent decline, respectively.

The combined credit card usage by Koreans in Japan also declined, with the spending in four most popular destinations -- Tokyo, Osaka, Fukuoka, Okinawa -- down 19 percent in the five-week period. It fell from 16.4 billion won to 13.3 billion won in the period.

Osaka was the hardest hit with a 31.6 percent decline, from 4.3 billion won to 2.9 billion won. Tokyo, meanwhile, saw the smallest decline of 12.4 percent, from 8.7 billion won to 7.6 billion won.

The report comes amid a nationwide boycott of Japanese goods in Korea, which was sparked by Tokyo’s decision last month to tighten controls on exports of materials needed for manufacturing semiconductors and smartphone displays.

Meanwhile, Korean credit card firms posted a 0.9 percent on-year decline in net profit in the first-half of the year, pressured by decreased commissions, separate data showed.

The combined net profit of the eight card issuers from January to June, came at 957.8 billion won, down from 966.9 billion won a year earlier.

The drop in the combined net profit comes after the financial authorities lowered the credit card commission rate for small businesses earlier this year.

By Jung Min-kyung (mkjung@heraldcorp.com)


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