T-Commerce Industry Expands Support for SMEs Affected by COVID-19

[Asia Economy Reporter Seungjin Lee] On the 7th, five member companies of the Korea T-Commerce Association announced that they will expand support measures for small and medium-sized enterprises (SMEs) struggling due to the novel coronavirus infection (COVID-19).

Since April until recently, the five member companies of the Korea T-Commerce Association?SK Stoa, K Shopping, Shinsegae TV Shopping, Shopping NT, and W Shopping?have been implementing various support measures such as expanding direct purchases, free broadcasts, reducing sales commissions, and advance payment of funds. Through this support, some SMEs in business relationships with the five member companies have been able to pay no sales commissions at all or only basic fixed costs such as card payment fees and delivery charges.

KTH, which operates K Shopping, recently signed a business agreement with local governments including Haenam County Office and launched the ‘Hajin's Matjip’ program to sell excellent local agricultural, marine, and specialty products as well as processed foods. In the second quarter, direct purchases of SME products increased by 54.3% compared to the same period last year.

TRN, which operates Shopping NT, runs a COVID-19 affected enterprise section called ‘Jige and Jaktagi,’ charging only 3-8% commission for these SMEs’ products and has advanced about 1 billion KRW in payments to partner companies facing difficulties. Additionally, it conducted direct purchases of SME products totaling about 3 billion KRW during April and May.

Shinsegae TV Shopping organized a total of 12 broadcasts for agricultural products through the ‘Gibumi’ program from April to June this year and donated the proceeds. It also shortened payment deadlines totaling over 93 billion KRW for about 770 partner companies struggling due to COVID-19. Direct purchases of SME products increased dramatically by 524% compared to the same period last year.

SK Stoa did not charge any sales commissions for 105 products from small-scale SMEs in the Daegu and Gyeongbuk regions during April and May. It also participated in an event delivering lunchboxes to 1,500 students facing difficulties due to COVID-19 in cooperation with SK Group. Furthermore, from May to June, it conducted the ‘live together’ promotion by directly purchasing social enterprise products and providing them as gifts to customers.

W Shopping selected local agricultural, marine, and livestock product companies and reduced their burden by charging low sales commissions of 1-5%. It promoted sales channel expansion by simultaneously conducting broadcasts and online sales. It continues to provide liquidity support through advance payments to partner companies experiencing financial difficulties.

In addition, the five member companies have been organizing special exhibitions for local SME products since last year. With active cooperation from the Ministry of Science and ICT, they plan to support more partner companies in line with future government policies to promote coexistence with SMEs struggling due to COVID-19 and expand sales channels.

Kim Hyung-wook, Chairman of the T-Commerce Association, said, “Data home shopping is the most SME-friendly distribution platform leading the distribution culture in the untact era brought about by COVID-19. We will continue to cooperate with the government and member companies to devise various measures and do our best to provide practical help to SMEs nationwide facing difficulties.”