PSPD in English Socio-Economic 2010-08-23   1509

A Press Conference on the Denunciation of the Shinsegae E-MART’s on the Entry to of a Wholesale DistributionTrade


A Press Conference on the Denunciation of the Shinsegae E-MART’s Entry to Wholesale Distribution


Denunciation of the Shinsegae’s Wholesale Business Operations and Urgency of Amending SSM Law

O In front of the Seoul Myungdong Shinsegae Main Building at 1 PM on Friday, July 9, 2010



The representative of Shinsegae E-mart, Byung-Ryeol Choi, appeared at a press interview on 29th and announced that ‘E-mart Mall’ will be expanded and open its doors starting 5th of the next month and will achieve 1 trillion won on sales by the year 2012. The E-mart Mall is going to expand the business operations by supplying products directly to small businesses different than the existing online shopping mall.


‘The Nationwide Coalition of Distribution Merchants’ strongly requested Shinsegae E-mart, which superficially puts forward a win-win discourse yet threatens viability of other wholesale distributors to forego its planned entry to the wholesale trade business. The coalition held the following press conference and suggested to have a serious discussion with the vice-president of Shinsegae Inc., Yong-Jin Cheong, regarding the win-win approach for large, middle, and small distribution companies.



<Press Conference>


◎ Host : Nationwide Coalition of Distribution Merchants, Nationwide Network for the Living of Middle and Small Business Merchants, Nationwide Seating Committee on Business Mediation for Requested Regions – Chair : Jae-Sik Cheong, Head of the Center

– Opening speech : Hwui-Ung Lee, Joint President
– Argument Against: Tae-Yeon In, Joint Chair (Union of Electorates for the Living of 
   Middle and Small Business Merchants)
– Argument Against: Committee of Stopping Songpa SSM
– Argument For: Gyu-Cheol Shin, Acting Director (Nationwide Network for the Living of
   Middle and Small Business Merchants)
– Reading the press statement : Jeong-Sik Lee, Joint President
– Submitting a request to meet the vice-president of Shinsegae Inc., Yong-Jin Cheong,





<Press Conference Transcription>


E-mart must cease its operation to enter the wholesale market, which kills all the small wholesale distributors!

– SMBA (Small & Medium Business Administration) should withdraw the win-win agreement, which justifies the entrance of E-mart into the wholesale market!
– Yong-Jin Cheong, the Vice-President of Shinsegae Inc. must respond to the cry of the 200,000 people in small wholesale business!



1. On May 26, SMBA, Shinsegae Inc., KOSAMART, ThankQ, and SBDC (Small Business Distribution Center) signed on the ‘Agreement between Large, Medium, and Small Wholesale Companies for Mutual Living and Cooperation’ regarding the collective purchase by proxy, permission to use distribution centers, etc.  However, E-mart registered the Information Disclosure Report of ‘Everyday 365’ to the KFTC (Korea Fair Trade Commission). Upon this registration, it becomes possible for E-mart to recruit a franchise at any time. Everyday 365 is conveniently designed for the franchisor by utilizing the voluntary chain method, in which Everyday 365 provides goods to local convenience stores but does not get involved in sales. There is no franchise fee and it only takes 42 million won for the warranty of merchandises.


2. And from this month, it provides an ‘Online Corporate Mall’ which provides services for only sole proprietors like local convenience store owners. It is a strategy to bring in small to medium sized retail distribution merchants by strengthening the B2B model. Also a large quantity products sales corner, which is frequented by restaurant owners, began its operations.


3. As evident from these operations, Shinsegae waits an order to execute after finishing all the preparation with detailed planning and strategy to expand its business in wholesales. There are 89,000 local convenience stores and traditional markets, and 40,000 small wholesalers delivering goods to restaurants, and 200,000 workers nationwide. Now the lives of small wholesalers are being threatened by two forces, reduction of the middle and small retailers due to large SSM corporations’ entrance to the marketplace and the direct entering of Shinsegae into the wholesale distribution sector. In spite of these conditions, Shinsegae gives a sweet-talk that it is a win-win strategy between large, medium, and small wholesalers. The nature of this talk is merely a trick over deaths of other wholesale distributors. The lie was revealed just as the Shinsegae employees visited local stores directly for franchise recruitment purposes.


4. The SMBA, being played by the plot of large enterprises, should immediately withdraw the agreement which justified the entrance of E-mart to the wholesale market and  was initially promoted for a political reason, the June 2 regional election. Letting large enterprises enter the market to help the living of middle and small business owners is to trust a cat with a fish. In order to revive the middle and small business owners, it would be a right policy to strengthen the competitiveness of coexisting middle and small wholesalers. In January last year, Seok-Woo Hong, former administrator of the SMBA, officially announced in a press conference that delivery wholesalers will be incorporated in planning a policy of activating middle and small distribution. However, the new administrator, Dong Sun Kim, abandoned the promise of a former administrator like an old shoe, and pushed a policy of pro-corporation. Kim postponed today’s schedule, a meeting with the Nationwide Coalition of Distribution Merchants by making an excuse that he has another meeting. In sum his willingness to talk is doubtful. We will strongly oppose the SMBA’s policy of anti-small business, and we are ready to fight for the cause.


5. Today, we, middle and small wholesalers and retailers will unite and fight against Shinsegae, which failed to live up to its corporate responsibility. The 21st century is the era that only “a respectful company” can be sustained and prosper. Those who step on the weak to establish a bloody regime will perish because of its greed.We strongly request once again the Vice-President of Shinsegae Inc., Yong-Jin Cheong, to cease its expansion into the wholesale and show his sincerity by responding to our request to talk, if he truly intends to coexist with the small and middle businesses.
 


July 9, 2010

Nationwide Coalition of Distribution Merchants
Nationwide Network on the Living of Middle and Small Business Merchants
Nationwide Seating Committee on Business Mediation for Requested Regions

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