Major retailers present plans for joint growth under Moon government
[THE INVESTOR] Major retailers are touting and presenting as their main goals joint growth with small business owners, in line with the new liberal Moon Jae-in administration.
Shinsegae’s E-mart has been leading the pack, signing on June 8 a deal with the city of Anseong, Gyeonggi Province, to open a No Brand joint growth store in Anseong Machum Market to attract customers to the traditional market.
To protect sales of surrounding vendors, the No Brand store will not sell fresh food, Korean brands of liquor and cigarettes, according to the company. No Brand is E-mart’s discount warehouse chain.
The company will also launch its first collaborative product called Peacock Ogada Tea under its home meal replacement brand Peacock. The product was developed as part of E-mart’s Made in Korea Project launched last year, which seeks out best-selling products manufactured by small and medium businesses to be distributed under the Peacock name.
“Selected products are not only brought into E-mart stores, but will also have access to E-mart’s affiliates and receive support for exports,” said Chung Dong-hyuck, who heads E-mart’s corporate social responsibility.
On May 30, E-mart also reached an agreement with Small and Medium Business Corp. to raise the proportion of its products manufactured by small and medium businesses to 70 percent, from 60 percent last year.
Hyundai Department Store also opened a joint growth outlet mall in eastern Seoul in May, which gives a percentage of its sales to surrounding vendors as rent. Under the agreement, existing vendors in the Garden 5 complex benefit from growing sales at Hyundai’s City Mall and enjoy greater foot traffic due to shoppers drawn to City Mall.
These policies have faced criticism that they are window dressing for the new administration, which campaigned on a platform of joint growth. While on the campaign trail, Moon advocated for changes in the corporate culture of Korea including the transition of irregular workers to permanent positions and greater regulation of retailers to protect smaller vendors.
However, others see large retailers’ efforts as significant steps to finding a solution for joint growth.
“Simply putting restrictions on large retailers does nothing to solve the fundamental issue,” said Seol Do-won, vice chairman of the Korea Chain Store Association. “It is important for small business owners to keep an open mind and try to work out practical solutions to grow together with the larger retailers.”
By Won Ho-jung/The Korea Herald (email@example.com)