[비즈한국] The growth of self-photo studios, which fueled a startup boom for the past several years, appears to have cooled off. The secondary market is being flooded with "urgent sale" listings for photo kiosks as stores shut down. This is analyzed to be the result of market oversaturation, where too many brands opened in the same commercial districts during the startup frenzy.
Why "Urgent Sale" Listings for Used Photo Kiosks Are Increasing
One of the items frequently appearing on online second-hand trading sites recently is the "photo kiosk." These are the photo-taking machines used in self-photo studios, and products that have been in use for less than a year are flooding the second-hand market.
While a new photo kiosk costs well over 10 million won, they are traded for 2 million to 3 million won in the used market. Since many people are selling them as "urgent sales," the price can drop to the 1 million won range. Sellers are even lining up, offering conditions such as covering the costs of programs and one year of server rental fees to sell the machines.
One seller said, "I decided to sell the photo-taking machine as an urgent sale while closing my shop. Since I don't have a proper place to store the machine, I put it up at a low price to sell it quickly." Another seller also remarked, "I'm selling it cheaper than the market price due to business closure. Since it's not selling as well as I thought, I'm planning to include props, bill exchangers, and more."
The self-photo studio startup boom began in 2021. A self-photo studio is a store format equipped with multiple booths where users can take 4-8 frame sticker photos. Usually, it involves installing 2-3 photo kiosks in a space of about 10 pyeong. Recently, there has been an increase in photo booths that add fun, such as offering frames that make it look like the user took a photo with a popular celebrity, or placing cameras in unconventional spots like above or below the subject instead of head-on.
As an upgraded version of the sticker photos that were popular in the 1990s, self-photo studios became a form of play culture among the MZ generation, and related brands began to spring up everywhere. The industry estimates that there are over 50 self-photo studio brands.
As the number of brands increased, market competition became fierce. In commercial districts where the MZ generation gathers, the saying "there's a self-photo studio every other door" is no exaggeration. In Seongsu-dong, Seongdong-gu, Seoul, there are five self-photo studios within a 130-meter stretch. Near Hongik University Station, there are also five self-photo studios operating within a 130-meter radius.
With multiple brands opening stores in narrow commercial districts, franchise revenues have inevitably plummeted. Because of this, more franchisees are deciding to close their businesses. "A," who recently decided to close their self-photo studio, said, "More than 10 self-photo studios opened within a 1km radius. It's inevitable that sales would decrease, right?" and added, "Especially since sales dropped noticeably this year, I decided I couldn't hold on any longer and closed the shop."
Leading Brand 'Life Four Cuts' Sees Fewer Franchisees and Worsening Performance
The number of franchisees for "Life Four Cuts," considered a leading domestic self-photo studio brand, is on the decline. The total number of stores, which was 239 in 2021, increased to 401 in 2022, but dropped to 383 in 2023, and now the number has decreased further, with only about 330 remaining.
It is also notable that they have relaxed their franchise opening conditions due to the reduced demand for startups. Previously, Life Four Cuts required franchisees to purchase new photo kiosks to start a business, but they recently changed their internal policy to allow startups even if the franchisee already owns used equipment.
Regarding the decrease in franchisees, LK Ventures, which operates Life Four Cuts, stated, "It is the result of strategic adjustments for market reorganization and quality maintenance," and "In the process of expanding unmanned stores and introducing a new platform (Life Four Cuts+), we restructured some existing locations that had low profitability or operational stability."
Performance also dropped significantly last year. LK Ventures' revenue, which was 25.4 billion won in 2022, decreased to 22.5 billion won in 2023, and dropped to the 19 billion won range last year. Operating profit turned to a deficit. LK Ventures recorded an operating profit of 4.5 billion won in 2022 and 1.2 billion won in 2023, but recorded an operating loss of 4.7 billion won last year. The net loss for last year was tallied at 8 billion won.
An official from LK Ventures explained, "This is the result of proactive adjustments for mid- to long-term structural transformation. As the self-photo market quickly becomes a red ocean, we are pursuing a structural transition into a photo platform company that goes beyond simple shooting services to include fandom, content, commerce, and global business. In the process, short-term profitability declined as we significantly increased the proportion of strategic investments."
As competition in the domestic market intensified, the self-photo studio industry is turning its eyes to overseas markets. This is because demand for self-photos is growing significantly abroad, fueled by the Korean Wave, with frames that allow users to take photos with K-pop artists gaining popularity.
Seobook, which operates Photoism, began full-scale overseas expansion in 2023 and currently provides services in 18 countries, including Japan, the Philippines, and France. A Seobook official said, "We are currently operating about 270 overseas stores. We are aggressively expanding our overseas business."
LK Ventures has also put forward a strategy to attempt a transition into a global platform company by expanding its business beyond self-photo services. An LK Ventures official stated, "We are in the process of a full-scale transition into a 'photo life platform company' beyond the self-photo market. We will build a fandom-specialized app and expand our global network and strategic partnerships."