Home&Shopping to Advance Payment of 15 Billion KRW to Small and Medium Partners Before Lunar New Year Holiday

In the spirit of mutual growth with small and medium-sized partners... Targeting approximately 1,300 small and medium-sized partners

[Asia Economy Reporter Kim Cheol-hyun] Home&Shopping (CEO Kim Ok-chan) announced on the 26th that it will make early payments of approximately 15 billion KRW in product payments to facilitate smooth cash flow for its partners ahead of the Lunar New Year.

Unlike other distribution channels, Home&Shopping’s early payment of sales proceeds is based on the partners’ expected sales. Normally, payments for sales from February 1 to February 10 would be made on the 18th, but this time, the estimated sales proceeds for that period will be paid on the 8th. Home&Shopping estimates that the scale of early payment for Lunar New Year sales will slightly increase from 13 billion KRW paid to about 1,200 small and medium-sized partners during last year’s Chuseok to around 15 billion KRW for approximately 1,300 partners this year.

In particular, due to the impact of the novel coronavirus disease (COVID-19), many small and medium-sized partners are experiencing difficulties in cash management. By prepaying the estimated settlement amount for the period before the Lunar New Year holiday, Home&Shopping expects this to help secure liquidity for small and medium-sized partners and support their business operations during the holiday season.

Home&Shopping has also been operating with shortened payment periods for product sales proceeds. Since its official launch in 2012, the payment period has been continuously shortened from an initial average of 32.5 days to an average of 9 days, reducing the period by more than three weeks. Sales proceeds are settled three times a month in 10-day units and paid within 4 business days from the closing date. This is evaluated to be helpful for small and medium-sized partners who face difficulties in cash management due to large-volume sales in home shopping transactions over a short period.

A Home&Shopping official said, "There are quite a few small and medium-sized partners for whom even a day or two is critical due to cash management reasons. We hope this will help reduce their financial burden and prepare for Lunar New Year sales." He added, "We will continue to do our best to establish and operate practical policies for the stable financial management of our partners."