Emart, Lotte Mart, Homeplus Reduce Supplier Sales Commission by 5%

[Asia Economy Reporter Lim Hye-seon] Company A supplies underwear worth 14 billion KRW annually to Emart. Due to the COVID-19 pandemic, sales have decreased by half compared to the previous year. However, during the Donghaeng Sale period, Emart plans to reduce sales commissions by 5% from the previous rate and make early payments for goods, which is expected to provide relief. The company anticipates that sales will increase by more than 40% compared to usual during the Donghaeng Sale period.

Company B, which sells travel bags, has supplied products mainly to large marts for 15 years. With consumer sentiment shrinking and the tourism and travel industry facing a crisis due to COVID-19, travel bag sales have plummeted by 80% compared to average years. Through support measures such as early payment of funds, the company has secured the capacity to prepare for the post-COVID era by prepaying manufacturers. Additionally, it expects sales to recover through marketing promotions during the Donghaeng Sale period.

Members of the Korea Chain Store Association, including Emart, Lotte Mart, and Homeplus, are taking the lead in revitalizing the economy through win-win promotional events to overcome the economic crisis.

According to the Korea Chain Store Association, member companies will actively participate in the "Korea Donghaeng Sale," held from the 26th to the 12th of next month, under the slogan "Cheer Up Korea," aiming to contribute to economic recovery through mutual cooperation. The association explained, "Increasing sales through promotional events will not only alleviate difficulties faced by suppliers but also contribute to consumer welfare by providing quality products at affordable prices."

In particular, major large marts such as Emart, Homeplus, and Lotte Mart have decided to strengthen cooperation with suppliers in line with the purpose of the "Korea Donghaeng Sale" event. First, large marts will reduce sales commissions by up to 5% from the current rate for fashion sector partner companies participating in the Donghaeng Sale. Payment for goods will also be made early, within 10 days after the monthly closing. Emart and Lotte Mart will pay in cash before the regular payment date.

In addition, major large marts have provided various win-win support measures to help suppliers overcome difficulties caused by the COVID-19 pandemic. They also plan to continue supporting struggling suppliers.

A representative of the Korea Chain Store Association stated, "As the number of customers visiting large marts has decreased due to the COVID-19 pandemic, resulting in a sharp drop in sales, it is necessary to further strengthen cooperation not only among large marts but also to help suppliers overcome management crises." He added, "Starting with this Donghaeng Sale event, both large marts and suppliers will take the lead in overcoming the economic crisis through mutual cooperation."