Expectations for Business Stability of Small-Scale Entrepreneurs over 5 Years
The bookstore business and LPG fuel retail business have been re-designated as livelihood-suitable industries.
On the 14th, the Ministry of SMEs and Startups announced that it held a Livelihood-Suitable Industry Deliberation Committee composed of private members and decided to re-designate the "retail sale of books, newspapers, and magazines (hereinafter referred to as bookstore business)" and "LPG fuel retail business" as livelihood-suitable industries.
The committee resolved to re-designate the two industries by considering the small business owners' vulnerability and the need for stable protection, while also reviewing the balance of industrial competitiveness and the impact on consumers. It also examined the self-help efforts made by small business owners during the previous designation period to secure their self-sustainability.
The livelihood-suitable industry system, established under the "Special Act on the Designation of Livelihood-Suitable Industries for Small Business Owners" enacted in 2018, aims to guarantee the survival rights of small business owners. Under this system, large corporations are, in principle, prohibited from acquiring, starting, or expanding businesses related to livelihood-suitable industries for five years.
So far, 11 industries have been designated as livelihood-suitable industries. Starting with the bookstore business and LPG fuel retail business, deliberations will be conducted sequentially for industries whose expiration dates are approaching.
In the case of the bookstore business, while online bookstores centered on large corporations have grown since 2019, offline bookstores have a high proportion of small business owners and increasing vulnerability, leading to a consensus that protection of small business owners is necessary even for large corporations.
Looking at the average annual sales growth rate of the bookstore business from 2019 to 2022, online sales grew by 11.7%, whereas offline sales only grew by 3.3%. Meanwhile, the proportion of small business owner establishments increased from 90.1% in 2019 to 93.7% in 2022, and the average sales amount decreased by 20 million KRW during the same period.
The committee decided to maintain the restriction period on the sale of elementary, middle, and high school study guides at newly opened large corporation stores to protect small business owners who mainly sell study guides, while allowing flexible new store openings within the total quota and easing the conditions for relocating stores to support the free business activities of large corporations.
The LPG fuel retail business is a community-based labor-intensive business with a high proportion of small business owners and has been facing difficulties due to decreased demand caused by the spread of city gas supply. Considering that there have been cases of large corporations entering this market in the past, the committee resolved to re-designate it for preventive protection.
The LPG fuel retail business involves selling containers of LPG fuel weighing 50 kg or less, and protection is limited to household and commercial (such as food service) uses.
The designation period for the bookstore business as a livelihood-suitable industry is from the 18th to October 17, 2029. For the LPG fuel retail business, it is from November 20 to November 19, 2029.
Won Young-jun, Director of the Small Business Policy Office at the Ministry of SMEs and Startups, stated, “The livelihood-suitable industry system is designed to ensure the management stability and survival rights of small business owners. We respect the resolution of the deliberation committee and will continue to strive to operate the system based on agreements between large corporations and small business owners.”
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
