[2020 National Audit] No Place to Sell 'SME Products'... 72% of Dedicated Stores Closed

25 Exclusive Sales Stores Closing One After Another... Only 7 Currently Operating
"Active Response Needed to Changes in Consumer and Distribution Environment Such as Non-Face-to-Face Sales"

I'm Shopping, a dedicated sales area for small and medium-sized enterprises installed at Incheon Airport Duty Free Shop. Photo by Korea Small and Medium Business Distribution Center

[Asia Economy Reporter Kim Heeyoon] As dedicated sales outlets for small and medium-sized enterprise (SME) products continue to close one after another, it has been revealed that the sales channels for SMEs are shrinking, leading to a decrease in sales.

On the 19th, an analysis of data submitted by the SME Distribution Center to Shin Jeonghoon, a member of the National Assembly's Industry, Trade, Energy, SMEs and Startups Committee from the Democratic Party, showed that a total of 25 dedicated sales outlets for SME products were opened this year in department stores, large supermarkets, highway rest areas, and other locations. However, as of September 2020, only 7 locations remained in operation, resulting in a closure rate of a staggering 72%. The annual closure status was confirmed as 2 locations in 2015, 8 in 2016, 2 in 2017, 2 in 2019, and 4 in 2020.

Since 2012 until July of this year, the total annual sales of dedicated sales outlets amounted to 76.77 billion KRW, and the budget support from the Distribution Center was 22.098 billion KRW. This year’s sales, affected by the novel coronavirus disease (COVID-19), amounted to only 3.118 billion KRW as of July, sharply declining compared to 11.947 billion KRW last year.

Representative Shin stated, “Dedicated sales outlets for SME products primarily rely on offline sales methods, so during rapid external environmental changes such as COVID-19, significant sales fluctuations are inevitable,” adding, “It is urgent to induce stable sales growth for tenant companies by combining non-face-to-face sales, and active responses are needed to the untact transition in consumer and distribution environments.”

He continued, “Entering department stores, duty-free shops, and large supermarkets individually is truly like reaching for the stars, so for SMEs, dedicated sales outlets are inevitably a great opportunity,” emphasizing, “Since contract periods vary for each dedicated sales outlet, efforts should be made to establish long-term operating contracts whenever possible, and active negotiations should be conducted to secure contract renewals before expiration to prevent the shrinkage of sales channels for SMEs.”

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