Historical disputes continue to weigh on the activities of Japanese groups in South Korea. The latest victim, the inexpensive clothing brand Uniqlo announced, Monday, December 14, the closure of its main store in Seoul. Conveniently located at the entrance to the tourist district of Myeongdong, the outlet, which was making 2 billion won (1.5 million euros) in sales per day when it opened in 2011, will close at the end of January. 2021.
The message “Thank you for your support” now adorns the glass facade, illustrating the difficulties of the sign in a country ranked third among Japan’s trading partners, behind China and the United States.
Uniqlo suffers from the boycott of Japanese products, launched in the summer of 2019 in response to Tokyo’s interruption of exports to South Korea of certain materials for microprocessors. Officially, the decision was taken for security reasons. Unofficially, it was in retaliation for the convictions of several Japanese industrialists, including the steelmaker Nippon Steel, to compensate Koreans who were victims of forced labor during the colonial period (1910-1945).
Emptied of their local customers, Uniqlo stores were then emptied of tourists due to the Covid-19 crisis. Fast Retailing, its parent company, recorded a loss of 88.3 billion won in South Korea in the fiscal year ended at the end of August.
Other sectors have suffered the shock of the boycott. Brewers like Asahi have seen their beers disappear from supermarket shelves. Japanese car sales collapsed. Nissan has even withdrawn from the market.
Of course, the boycott tends to run out of steam and meets limits, especially when it comes to unique products. The Tamagotchi from toy maker Bandai “Broke the all-time record for toy orders in South Korea”, thus boasted the local branch of the company. Sony also no longer has a PlayStation 5 available. The release, in the spring, of the new opus ofAnimal Crossing, Nintendo, had resulted in long queues in front of stores. More generally, online sales would have somewhat offset the negative impact of the boycott and Covid-19.
Notwithstanding, the future remains bleak. Tokyo would refuse to participate in the trilateral China-Japan-South Korea summit originally scheduled for 2020 in South Korea and finally postponed to 2021. A sign of the ongoing blockages, the court in Pohang (south-eastern Korea) has dismissed, Friday, December 11, an appeal by Nippon Steel, which challenged the seizure of part of its assets in South Korea, in this case 194,794 shares, valued at approximately 973 million won, in PNR , a joint venture created with the South Korean steelmaker Posco, to finance the compensation.