MZ Entrepreneurs Only Looking for Upper Floors... Building Owners Frustrated with Empty Ground Floors

[Financial News] "I regret opening a store on the ground floor just because of the pedestrian traffic at the crosswalk intersection. In the end, I only lost the money I earned, and now I'm working as an employee at a nearby store again."
On the 2nd, I met employee A at a phone case store near Exit 9 of Hongdae Entrance Station. Until last year, A ran their own store on this street. Despite starting a business with hopes for the ground floor store, they struggled with deteriorating profitability for years and eventually closed down. A said, "I tried SNS promotion too late, but it was useless," adding, "I realized too late that marketing strategy is more important than location."
■'If it's on the ground floor, it will sell' is an old saying
Even in the Hongdae Entrance Station area, known as 'the largest commercial district in Korea', the 'ground floor store success formula' is breaking. In the past, merchants insisted on ground floor stores for pedestrian traffic and visibility, but now it's different. More and more young merchants in their 30s and 40s are avoiding the expensive ground floor and choosing upper floors.
A real estate agent in Yeonnam-dong said, "If conditions are similar, of course, people prefer the ground floor, but now many are looking for upper floors considering appropriate rent and space utilization," adding, "For businesses based on SNS promotion or reservation systems, the ground floor is often unnecessary." In fact, small restaurants, cafes, bars, beauty shops, etc., have long been established on upper floors.
Recently, MZ generation entrepreneurs entering the startup market are leading this trend. Many open small dessert shops or cafes based on self-interior design, focusing on viral video production or experiential content promotion using TikTok, Instagram Reels, and YouTube. They have a clear tendency to prioritize 'cost-effective spaces' where brand concept implementation is possible over building location and age.
According to Naver real estate listings as of today, 45.85% of the monthly rent listings near Seoul Subway Line 2, Gyeongui-Jungang Line, and Airport Railroad passing through Hongdae Entrance Station were on the ground floor. Small ground floor stores on the main road (79㎡ exclusive) require a deposit of 50 million won and monthly rent of over 5 million won, while those on side streets require a deposit of 20-30 million won and monthly rent of around 3 million won. A real estate agent said, "Large ground floor stores on the main road are difficult to handle unless they are corporate franchises, hospitals, or pharmacies."
Real estate agencies are still emphasizing the advantages of ground floor stores in their promotions, but merchants' positions were different. They have witnessed countless cases of businesses closing within months due to the inability to bear the rent burden or changing industries every year. Additionally, the premium for small ground floor stores, which is at least 10-30 million won, is also a burden.

■Target Customers, Marketing Strategy is More Important
However, stores with foreigners as their main customer base still preferred the ground floor. Merchant B, who runs a clothing store in the back alley of Hongdae's main street, said, "I considered closing during the COVID-19 period, but since foreigners are the main customers, it's hard to leave this spot," adding, "The rent keeps rising, which is burdensome, but since I'm not doing separate SNS marketing, there's no alternative," he sighed.
From the clothing store run by B, it's a 100-meter walk to the main gate of Hongik University, but the pedestrian traffic itself has significantly decreased compared to the past. This shows that vacancies are becoming prolonged from the main gate to the entire street extending to Sangsu and Hapjeong Stations. Medium-sized building stores from Hongdae's main gate to the right towards Sangsu Station are in a state of vacancy for more than five buildings, creating a desolate street landscape.
C, who runs a nail shop near Sangsu Station, said, "Originally, I opened a store on the ground floor of a side street, but after two years, I moved to a cheaper and larger third-floor store," adding, "With reservation-based operations and SNS promotion, sales have actually increased."
For building owners, 'ground floor vacancy' is a troublesome issue. A building owner of a four-story building located on a side street near Hapjeong Station said, "I've been offering the first and second floors for a long time, but only recently did a tenant move into the second floor," adding, "In the past, the first floor would have been rented out first, but it's hard to lower the price, and leaving it vacant causes significant financial loss, so it's a big concern."
A restaurant owner who has been operating in the Hongdae Entrance Station intersection for over 20 years said, "Real estate agencies make money from commissions when stores change frequently, but merchants dream of doing business in one place for a long time," adding, "Before starting a business recklessly, you should first think about whether you have a brand concept and marketing strategy."
en1302@fnnews.com Jang Inseo Reporter