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Unintentional Self-Parody in Retail: Coffee and Cell Phones, Together at Last

Jamsil Cell Phone Stores

Apologies for the blurred artifacts in the middle of this photo. I took it with my phone’s “panorama” feature while my hands shook with excitement.

In the ancient Korean conception of the universe, the Earth was flat and sat atop a coffee shop at one end, and a cell phone store at the other. These in turn rested on more coffee shops and more cell phone stores.

One medieval scholar, asked by a student what was at the bottom, quipped over his rice cakes, “It’s coffee shops and cell phone stores all the way down.”

Okay, I lied. That’s actually the belief system of contemporary Korea. Or so one would be tempted to believe after walking around Seoul.

Consider the outlandishness depicted above. A store that sells phones with contracts for the three major Korean carrier companies will open less than 20 feet away from another store that sells phones with contracts for the three major Korean carrier companies.

The new phone store will be attached to a major coffee franchise. Unseen in the photo, the new coffee shop is around the corner from an independent coffee shop and across the street from a failed independent coffee shop. It is literally next door to a Paris Baguette store, which also serves coffee. It’s also a block away from the famed purveyor of coffee drinks, Dunkin’ Donuts.

Two coffee shops in Jamsil

Two coffee shops next to each other in Jamsil.

How much demand exists for these products? I have a cup of coffee several times a week at Paris Baguette. Sometimes it’s busy and sometimes it’s dead, but I’ve never had more than one person ahead of me in line.

What about phones? I’m skeptical. Even the manufacturers fear not much. That’s because the phone market is nearly saturated. There’s not much room for growth when even some 8-year-old children I taught in Bundang had phones better than my basic model. If you’re Korean and don’t own a smartphone by now, your flip phone is probably going to the grave with you.

One analysis even says there will be negative growth in Korea’s smartphone market by 2016. And yet, here it is, a phone store next to a phone store and less than 200 meters from another phone store. We’re talking about stores selling the exact same products at the exact same prices.

Worse, someone thought it was a good idea to invest in a month-long interior renovation to build a store combining cell phones and coffee. That’s right — they will sell phone contracts inside the coffee shop. It’s like all the jokes I ever make about Korea are slowly becoming real-life scenarios. (Hagwon teachers might want to take cover, since I also have joked that instead of killing themselves, disgruntled students will eventually figure out that terrorism is a far better method for venting their angst.)

I could be wrong, though. Seoulites seem eager to blow money on overpriced fru-fru coffees. But according to this academic paper citing government sources, Seoul had more than 12 thousand coffee shops in 2011, a 54 percent increase over the previous year. How many more lattes can the deeply indebted public afford to keep this bubble inflated?

I’m not the only one who suspects it’s a bubble. The Korea Times reported last year about the “cutthroat” nature of the Seoul coffee scene.

In a bubble, everyone invests without considering the downsides because there is no perceived downside. By the time clueless people have heard about a trend and decided to throw money at it, it’s already inflated most of the way.

Speaking of clueless people, here’s a hilarious quote from the Times story. Just keep in mind that clueless people can also staff giant corporations.

“We’ve decided to open a coffee shop because we thought it would be a relatively easy business to run,” said Kim, one of the two young owners of a small coffee shop along the street. “But it turns out it isn’t.”

Physical labor is the hardest part of the job, she said.

Maybe Coffine Gurunaru, Cafe Bene, et. al will take a page from the Poonglim playbook and start forcing their employees to buy unsold coffee inventory with their own wages when off the clock.

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