A Starbucks branch in Seoul. (Yonhap)
Weekly payment volume at Starbucks fell by over 8 billion won in South Korea over the week since the eruption of a controversy over a promotional campaign perceived as disparaging the May 1980 uprising and massacre in Gwangju.On Wednesday, the mobile index of the data platform IGAWorks showed Starbucks recording transactions of 23.69 billion won over the week from May 18 to 24. This came after a controversy emerged over the company’s “Tank Day” promotional campaign on May 18.The number was down by around 8.47 billion won, or 26.3%, from the 32.16 billion won in transactions recorded the week earlier (May 11 to 17).During the first week of the month (May 4 to 10), transactions at Starbucks stood at 31.47 billion won. The total increased by roughly 2.2% during the second week but ended up plummeting by more than 8.4 billion won in the third week after the controversy erupted.Recent mobile app statistics also suggest Starbucks is facing a decline in new downloads. Between May 18 and 24, there were 36,994 new downloads of the Starbucks app, representing a drop of 11,447 (23.6%) from 48,441 a week earlier. This means the statistics point to declines in both transactions and app downloads.During a press conference held at the Josun Palace hotel in Seoul’s Gangnam District on Tuesday to apologize to the South Korean public for the furor over the marketing campaign, Jeon Sang-jin, the Shinsegae Group’s executive vice president, said, “While this is not the time to talk about sales, there has been quite a large sales decline.”The controversy erupted over a promotional event by Starbucks Korea on May 18, the anniversary of the May 1980 Democratization Movement in Gwangju. The “Tank Day” campaign in question referenced the date “May 18” and used a phrase about slamming its “Tank” tumblers on a desk. The company continues to face criticism for what was widely seen as mocking the democratization movement with apparent references to the tanks used by the martial law forces to suppress, as well as activist Park Jong-cheol’s death by torture in 1987.Shinsegae Group Chairperson Chung Yong-jin responded with a written apology to the South Korean public on May 19, followed by a public apology on May 26 in which he stated, “I sincerely apologize and ask for your forgiveness.”By Seo Hye-mi, staff reporterPlease direct questions or comments to [english@hani.co.kr]
