The encyclopedia · Strategy & Leadership · Operational decision · 2014–2024
KOREAMART's Korean goods retail was crushed by the Japan boycott and then COVID
An Okinawa-based Korean food and cosmetics retailer that peaked at ¥200M was bankrupted by the 2019 boycott of Korean products and then COVID.
ZEN Co., Ltd. · 2024-01-17
What happened
ZEN Co., Ltd. was an Okinawa-based retailer and restaurateur, operating two KOREAMART stores selling Korean food, cosmetics, and imported goods, a Korean BBQ restaurant Zen Ikebukuro in Tokyo, and a Korean home-cooking restaurant in Okinawa. Founded in October 2014 with ¥10 million in capital.
The company rode the Korean Wave (K-boom) in Japan, with revenue growing to approximately ¥200 million by the fiscal year ending July 2021. However, the business was hit by a one-two punch. In 2019, a political dispute between Japan and South Korea triggered a consumer boycott of Korean products across Japan, directly hitting KOREAMART's core merchandise. Just as the boycott's effects began to ease, COVID-19 arrived in 2020, collapsing both retail foot traffic and restaurant customers.
Sales stagnated, losses continued, and by 2023 cash flow had dried up entirely. With approximately ¥150 million in debt and no recovery in sight, ZEN Co., Ltd. was ordered into bankruptcy proceedings on January 17, 2024.
Why it happened
- The 2019 Japan-Korea trade dispute triggered a consumer boycott of Korean products — KOREAMART's entire inventory was suddenly politically toxic.
- COVID-19 collapsed retail foot traffic and restaurant customers in 2020 — the business was hit by two external shocks in two consecutive years.
- Revenue peaked at ¥200 million but the company had no differentiation beyond Korean products — when Korean goods became undesirable, there was nothing else to sell.
- The business model depended on the Korean Wave cultural trend — a trend that reversed direction due to geopolitics, which no business strategy could control.
- Founded in Okinawa, the company was geographically distant from its supply chain and trend sources — the K-boom brought customers, but the boycott cut them off with no buffer.
The lesson
A retailer built on a cultural trend from another country faces geopolitical risk nothing in business can mitigate — when diplomatic relations sour, the trend reverses overnight.
Aftermath
ZEN Co., Ltd. was ordered into bankruptcy proceedings on January 17, 2024, with approximately ¥150 million in liabilities. Founded October 2014 in Okinawa with ¥10 million capital, the company operated KOREAMART retail stores selling Korean food and cosmetics, a Korean BBQ restaurant in Tokyo, and a Korean home-cooking restaurant in Okinawa. Peak revenue of ¥200 million (FY July 2021) could not survive the 2019 Japan-Korea boycott of Korean products and the COVID-19 pandemic.
Sources
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