Mobile phone stores sit empty at an electronics shopping mall in Seoul in this undated photo. Korea Times file
Offline mobile phone retailers are fading as more consumers buy unlocked smartphones online, use price-comparison platforms to find transparent deals and sign up for low-cost mobile plans without visiting a store, underscoring a structural shift in the country’s smartphone distribution market.
According to data from the National Tax Service, the number of registered mobile phone stores in Seoul fell to 2,965 as of April, down 5.8 percent from 3,149 at the end of 2021. The figure has declined steadily from 3,091 in 2022 and 2,966 in 2023.
The effective number of operating stores is likely lower than official counts, as dormant and temporarily closed outlets are still counted in the statistics, with some owners keeping their business registrations active while effectively shutting down amid loan repayment pressures and weak customer traffic.
The decline comes as consumers increasingly favor transparent pricing over the traditional practice of negotiating discounts with individual dealers, whose subsidies and contract terms often vary from store to store.
An owner of a mobile phone shop in Jongno District, Seoul, surnamed Lee, said last year’s removal of the cap on handset subsidies has done little to revive offline sales despite allowing retailers to offer larger incentives.
He said demand remained weak, especially as phone buyers have become more cautious about purchasing new phones.
“Additional subsidies have increased since the law banning the handset subsidy was revised, but weaker consumer sentiment has not translated into meaningful gains in either profits or customer traffic,” Lee said.
“People are less inclined to upgrade their phones lately, and more of them seem to keep using their devices even when they have minor issues.”
Cautious buyers are instead turning to manufacturers’ online stores, e-commerce platforms and price-comparison services, where they can compare handset prices and mobile plans before purchasing unlocked devices.
The trend has accelerated alongside the rapid growth of budget mobile virtual network operators (MVNOs), which offer discounted mobile plans, often at around half the price of major carriers’ and, in some cases, as little as one-tenth.
The MVNO market has expanded rapidly as consumers seek lower monthly bills. The number of MVNO subscribers reached 10.48 million in April, continuing its growth after surpassing the 10 million mark last year, according to the Ministry of Science and ICT.
“More people are buying only the device through the unlocked phone market and activating it with budget mobile carriers, so the budget carrier market is the one that keeps expanding,” Lee said.
Online mobile phone platform Moyo’s website / Screenshot from Moyo website
The shift reflects broader changes in consumer behavior. Rather than relying on sales staff, shoppers increasingly research devices themselves.
According to a survey by market researcher Consumer Insight, 51.3 percent of 6,141 respondents who had purchased a smartphone or switched carriers within the past six months said they used generative artificial intelligence (AI) during the decision-making process.
Online platforms such as Moyo and Ajungdang have also gained traction, allowing users to compare device prices and tariff structures across carriers, and, in some cases, buy phones and activate service online instead of visiting a store.
A consumer, surnamed Kim, who recently purchased a smartphone from Ajungdang, said transparency was a major reason for avoiding physical stores.
“I mainly use online mobile retailers when buying a phone,” he said. “I don’t really trust physical shops, but I still want a discount. At online agencies, I can just buy based on the listed price and contract terms, whereas when I go in person, I hear a lot at once, get confused and start to wonder if they are trying to rip me off.”
Rising smartphone prices are also encouraging consumers to postpone replacing their devices.
As higher component costs, particularly for memory chips and other semiconductors, push up handset prices, more buyers are keeping their existing phones longer or opting for secondhand devices, further weighing on demand at offline mobile retailers.
