Department Store, Mart, and E-commerce Leaders Gather... "Win-Win Agreement is a Promise of Hope"

April 4 'Distribution and Supply Win-Win Agreement Ceremony to Overcome the COVID-19 Crisis'
Support for SMEs during 'Donghaeng Sale' starting on the 26th
Marketing Support, Early Payment, and Fee Reduction

On the afternoon of the 4th, attendees are taking a commemorative photo after signing the agreement at the "Distribution-Supply Industry Win-Win Agreement Ceremony for Overcoming the COVID-19 Crisis" held at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul. From the third person on the left in the front row: Hwang Beom-seok, President of the Korea Department Store Association; Cho Sung-wook, Chairman of the Fair Trade Commission; Han Jun-seok, President of the Korea Fashion Industry Association.
[Photo by Yonhap News]

[Asia Economy Reporter Cha Min-young] "The win-win agreement signed today is a promise of hope for survival together."

Representatives of Korea's distribution industry, from department stores to large marts and e-commerce, gathered in one place to promote win-win cooperation with suppliers facing difficulties due to the COVID-19 pandemic. In particular, various support measures for small and medium-sized partner companies will be prepared in line with the government-led 'Together Sale' event, which will be held for two weeks from the 26th to July 12.

The Korea Fair Trade Commission held the 'Distribution-Supplier Win-Win Agreement Ceremony to Overcome the COVID-19 Crisis' on the afternoon of the 4th at the Korea Chamber of Commerce and Industry, presided over by Chairman Cho Sung-wook of the Fair Trade Commission.

Hwang Beom-seok, CEO of Lotte Department Store and chairman of the Korea Department Store Association, said after signing the win-win agreement, "The distribution industry has grown through mutual cooperation between the supplier industry and the distribution industry. The win-win agreement signed today is also a promise of hope for survival together, and the member companies of the Department Store Association will remember today's promise and do their best for the development of the distribution industry."

Jang Ho-jin, CEO of Hyundai Department Store, said, "The department store industry has sought opportunities even in difficult situations and has provided support to help various small and medium-sized partner companies according to each company's circumstances. However, we hear that to normalize management, an increase in sales through boosting consumer sentiment is necessary. We are grateful for the planning of the Together Sale to overcome the difficult environment and for the Fair Trade Commission's timely relaxation of the promotional cost-sharing guidelines."

Moon Young-pyo, CEO of Lotte Mart and chairman of the Chain Store Association, said, "The large mart industry is going through a difficult period due to internal and external environments. To stimulate domestic demand, we will contribute to revitalizing domestic consumption through commission fee reductions and promotion activation, as well as complying with guidelines centered on the Chain Store Association."

Kang Hee-seok, CEO of E-Mart, said, "Due to COVID-19, the number of visitors has decreased and sales have declined, causing sales to drop for small and medium-sized partner companies as well. It is expected that all distribution companies, including E-Mart, have made similar efforts, and continued government support and assistance will be of great help. We will sincerely engage in win-win cooperation for other discount store companies and partner companies."

Im Il-soon, CEO of Homeplus, said, "Although we are going through an unprecedented time, thanks to the government, companies, and medical staff, we have been able to feel pride. I believe that the absence of panic buying was due not only to the distribution industry but also to various social actors." He added, "We remember that there is a larger ecosystem composed of many people engaged in agriculture and fisheries and various small and medium-sized partner companies, and Homeplus will do its best to overcome the crisis."

Chairman Jo Sung-wook of the Korea Fair Trade Commission (right) and Hwang Beom-seok, President of the Korea Department Store Association, signing the agreement.
[Image source=Yonhap News]

Byun Kwang-yoon, CEO of eBay Korea and president of the Online Shopping Association, explained, "Although COVID-19 has entered a calming phase due to the government's quick response, the domestic distribution industry is facing difficulties due to concerns about re-spreading and consumption contraction. E-commerce has also joined the win-win agreement to overcome the difficult situation of small and medium-sized partner companies."

Choi Woo-jung, CEO of SSG.com, said, "Recently, anxiety has continued due to COVID-19, and the entire nation is experiencing difficulties. In the distribution market, the non-face-to-face (untact) culture is rapidly progressing, and the online industry is making efforts to cooperate with local small merchants and will promote SSG Delivery to ensure that local agricultural products sell well even after the event ends."

Park Dae-joon, CEO of Coupang, also said, "At the beginning of COVID-19, we worked hard to quickly supply daily necessities to consumers and created a support program worth 80 billion KRW to help small local producers. As everyone knows, we feel the pain of COVID-19 and understand well that it is difficult to overcome alone," expressing empathy and a will for win-win cooperation.

Department stores will provide benefits worth about 18.3 billion KRW by lowering sales commissions and reducing rent and management fees for leased stores to 2,500 suppliers participating in the Together Sale. In addition, they will pay 221 billion KRW in product payments early and support interest-free or low-interest loans through member companies' financial support programs such as the Win-Win Growth Fund and Win-Win Growth Fund. They will also support expanding sales channels to help small and medium-sized suppliers reduce inventory through specialized small business halls like 'Dream Plaza' and overseas market development teams. Minimum guaranteed commissions will also be waived for suppliers during the sale period.

Large marts will, for the first time, reduce sales commissions for the sale event by up to 5 percentage points and pay payments early. Lotte Mart will pay the day after the monthly closing, and E-Mart will settle and pay sales proceeds up to the application date immediately. In addition, minimum guaranteed commissions will be waived for suppliers during the sale event.

E-commerce companies are also participating. Commonly, they will support promotional marketing by providing main page and banner advertising costs and creating event pages. Coupang will reduce sales commissions by up to 60% for new entrants, providing support worth 5 billion KRW. Musinsa, an online select shop company, will prepay production payments six months before delivery, worth 50 billion KRW annually. SSG.com will support about 2.8 billion KRW in double coupons such as 'Together Coupons.'

The Fair Trade Commission is also lending support by temporarily relaxing the promotional cost-sharing guidelines. If suppliers voluntarily and publicly participate in events and decide the discounted items and discount rates themselves, large-scale retailers will be exempted from the obligation to share 50% of promotional costs.

Meanwhile, representatives from five department stores (Lotte, Shinsegae, Hyundai, Galleria, AK Plaza), three large marts (E-Mart, Homeplus, Lotte Mart), and five online shopping companies (Coupang, SSG.com, Interpark, Market Kurly, Musinsa) attended the ceremony. Representatives from nine fashion-related organizations, including the Korea Fashion Industry Association, Korea Fashion Designers Federation, and fashion companies (Samsung C&T Fashion Division, E-Land World Fashion Division, Hansung F&I, Weebis, Demu, Mill & I, Lin S&J), also participated.

This content was produced with the assistance of AI translation services.