Hana Financial Research Institute’s “SOHO Industry Check-up” Report
Divergent Industry Changes Amid Demand Contraction, Supply Overheating
50s Emerging as Key Consumer Base, 20s Fad-driven Decline
Social Role of SOHO Expanding into the ‘Care Economy’
In the recent SOHO (small office, home office) market, certain industries are experiencing price increases or growth despite demand contraction, but there’s a trend of declining sales per store. Postpartum care centers and pet supply stores are representative industries. [Created using ChatGPT]
[Herald Economy by Kim Byori] Over the past three years, the annual average number of franchisees in postpartum care centers has decreased, but the approved amount per transaction has increased. In contrast, during the same period, the rapid concentration of supply due to the proliferation of the ‘pet economy’ has led to an increase in the total sales of pet supply stores, but the sales per store have decreased.
It is interpreted that the rapidly changing population structure such as low birth rates and the overheating of specific industries due to new consumption trends have had a direct impact on the domestic SOHO (small businesses, sole proprietors) management environment.
According to the “SOHO Industry Check-up in Response to Consumption Environment Changes” report by Hana Financial Research Institute on the 23rd, due to demand contraction from low birth rates, the number of postpartum care center franchisees decreased by an annual average of 4.0% from 2022 to 2024, while the approved amount per transaction increased by 23.6%. Price increases to compensate for revenue in a demand contraction scenario also appear.
Kim Moon-tae, a research fellow at Hana Financial Research Institute, analyzed, “A cycle of decreasing number of births, business reductions, price increases, decreased store accessibility, rising childcare costs, and increased childcare burden continues due to market contraction and price increases.”
In the case of pet supply stores, a representative industry with excessive supply due to the pet economy proliferation, the total sales increased by an annual average of 1.4% from 2022 to 2024, but with a 4.2% increase in franchisees, the sales per store decreased by 2.7%.
Additionally, while demand for restaurants has contracted due to a decrease in evening gatherings and preference for home meals, demand has been fragmented into businesses with uniqueness (gourmet restaurants, fine dining) and those emphasizing price rationality (low-cost buffets).
Examining consumer behavior by generation, consumers in their 50s are emerging as a key consumer base in the recent SOHO market. In the case of cram schools, the sales share of those in their 50s increased from 18.7% in 2019 to 26.9% in 2024. The demand for reemployment post-retirement is rising, and the sales share of those in their 50s at technical and professional training institutes also increased from 26.5% in 2019 to 32.6% in 2024. They are also spending more on self-care and leisure, with the sales share at skin and body care centers increasing from 17.6% in 2019 to 22% in 2024 and travel agencies from 21.8% in 2022 to 25.5% in 2024.
The characteristic of consumers in their 20s is rapid trend changes. While they infuse new energy into the SOHO market, their consumption quickly dwindles once popularity wanes, making the stability of SOHO businesses relatively low. The popularity of self-photo studios like “Life Four Cuts” led to an average annual growth of 6.6% in the photography industry over the past two years, but the share of those in their 20s decreased, slowing the growth rate. Video and record shops, as well as karaoke, also saw a decline or slowdown in growth starting in 2022 as the share of those in their 20s decreased.
Hana Financial Research Institute also analyzed that the social role of SOHO is expanding, particularly centered around the caregiving sector. The increase in 1-2 person households and dual-income families makes it difficult to care for children solely at home, expanding the care economy in childcare, elder care, pet care, and self-care (caring for one’s own mind and body).
Researcher Kim evaluated, “While the social role of SOHO was previously concentrated on areas difficult to perform within the home, it is now extending to caregiving tasks replacing household chores.”