|A countdown clock for the Tokyo 2020 Olympic Games is seen reflected in a puddle of water in front of Tokyo Station, March 23. / Yonhap|
By Kim Jae-heun
The postponement of the Tokyo 2020 Olympic Games has taken a major toll on Korean firms hoping to expand their customer base with aggressive marketing during the summer sports extravaganza.
The International Olympic Committee announced the delay of the Games, which were scheduled to start in July, to next year, Wednesday, for the first time in the history of the modern Olympics.
The decision came amid the worldwide spread of the COVID-19 pandemic.
Korean firms had high hopes to market their latest products during the Games, which would have been the first held in Asia since the 2008 Beijing Olympics.
Tech giant Samsung Electronics, also an official sponsor of the Tokyo 2020 Olympic Games, will likely face a setback due to the postponement. The company had been preparing to showcase limited editions of its latest Galaxy S20 and Galaxy Z flip smartphones, but this has now been scrapped.
"We will have to wait and see if the delay, and the cancellation of the two Olympic Games limited editions, will impact our operations," a company official said.
The local home appliance sector is also facing a similar setback. Television makers had hoped to rebound from losses incurred from COVID-19 through the Olympics, but must now search for alternatives. The companies have been suffering major losses as they have had to temporarily close factories around the world due to the deadly virus.
Telecommunications firms were banking on promoting their 5G networks to the world, but the postponement could cause a lull in demand, which would impact the overall IT industry.
"The demand for 5G will be lessened and have a negative effect on the overall IT industry," an economic researcher said.
"Samsung Electronics was aiming to enter the Japanese 5G market through the Tokyo Olympics as the country was expected to seek to commercialize its 5G networks."
At the end of last year, Samsung was chosen as the main 5G supplier for KDDI, one of four major Japanese mobile carriers.
Japanese telecom companies, including KDDI, which plan to invest 17 trillion won over the next five years to solidify their 5G networks, were Samsung's potential customers.
Japan's leading telecom company NTT DOCOMO launched its 5G network Wednesday, while the other carriers are set to follow suit.
"Again, postponement of the Olympic Games does not mean Japanese mobile carriers will not adopt 5G. KDDI also launched its 5G network Thursday. The Olympic Games would have helped 5G to expand faster in Japan," a Samsung Electronics official said.
However, the postponement will inevitable set back Samsung's efforts to occupy over 20 percent of the 5G global telecommunication equipment market by 2025.
According to Dai-ichi Life Research institute, the ripple effect from the delay will hit the Japanese economy hard with estimated damage expected to reach nearly 36 trillion won ($29.34 billion).
Japan was expected to bring in additional 22 trillion won from the follow up to the Olympic Games
The Nikkei economic daily estimated total losses to be between 6.6 trillion won to 7.7 trillion won.