Business Community Reflects on 'Win-Win Management' Ahead of Chuseok

Samsung, LG, and Hyundai Motor Group to Advance Payment of Supplier Invoices Ahead of Chuseok

[Asia Economy Reporter Suyeon Woo] Ahead of Chuseok, the major traditional Korean holiday, domestic companies are expanding their efforts in win-win management. This is with the intention of supporting local neighbors in various ways, such as early payment of partner company fees and purchasing agricultural and marine products as holiday gifts to share the concerns of farmers.

According to the business community on the 11th, major domestic conglomerates such as Samsung, LG, and Hyundai Motor Group have decided to pay partner companies' delivery fees earlier than scheduled for this year's Chuseok. This measure considers the temporary concentration of partner companies' fund usage, such as bonuses, before the holiday.

Samsung Group's 12 affiliates will pay a total of 800 billion KRW in partner company goods fees more than a week earlier, before the Chuseok holiday. Since 2005, Samsung Electronics has been the first in Korea to pay the full transaction amount in cash to support coexistence with partner companies, and since 2011, it has increased the payment cycle from twice a month to four times a month to support partner companies' fund management.

Additionally, Samsung is running a 'Good Consumption to Help Farmers' campaign, allowing employees to purchase some agricultural products, whose prices have plummeted due to COVID-19, at discounted prices. Samsung Electronics, its affiliates, Samsung C&T, and Samsung financial affiliates have created a separate site with NongHyup on an employee online marketplace to help farmers. When employees purchase agricultural products on the site, Samsung supports sales expansion by adding 50% of the purchase amount. This campaign will continue until the total purchase amount reaches 3 billion KRW.

Samsung Electronics employees are selecting Korean agricultural products at the employee online marketplace. Photo by Samsung

LG Group will also pay 620 billion KRW worth of delivery fees early to help partner companies struggling due to the prolonged COVID-19 pandemic manage their funds smoothly. Eight affiliates, including LG Electronics, LG Chem, and LG Uplus, plan to pay all fees before the Chuseok holiday, up to about 10 days earlier than the scheduled payment date.

In particular, LG plans to encourage first-tier partner companies to pay delivery fees early to second- and third-tier partner companies as well, so they do not face fund shortages during Chuseok. The amount paid by LG Electronics' first-tier partner companies to second-tier and below partner companies through the win-win payment system last year was 531.7 billion KRW, the largest scale among domestic companies.

Hyundai Motor Group will also pay 1.2354 trillion KRW in delivery fees earlier than originally scheduled before the Chuseok holiday to ease partner companies' financial burdens. This early payment targets about 3,000 partner companies supplying parts, raw materials, and consumables to Hyundai Motor Group affiliates such as Hyundai Motor, Kia, Hyundai Mobis, Hyundai Construction, and Hyundai Glovis.

Hyundai Motor Group has been prepaying delivery fees before holidays such as Seollal and Chuseok every year to alleviate partner companies' financial difficulties. Last Chuseok and this Seollal, they executed early payments of 1.1087 trillion KRW and 1.8767 trillion KRW, respectively.

Furthermore, Hyundai Motor Group plans to purchase approximately 21.6 billion KRW worth of Onnuri gift certificates to revitalize traditional markets and boost domestic consumption, distributing them to group employees, affiliated facilities, and marginalized neighbors. They also operate an employee online shopping mall where domestic agricultural products can be purchased to support farmers' income.

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