South Korea: The Super-Supermarkets Twitter shootout

As mega-markets arrive to devour small businesses, serious discussions have been rekindled in Korea in both online and offline venues. On the night of October 28, while a serious debate on the SSM (Super SuperMarket) issue was taking place on a major TV network program, two formidable opponents, one representing big corporations and the other standing for the small business owners, engaged in a battle on in Twitter.

Chung and Moon are two prominent figures standing on diametrically opposite sides of the SSM debate. Chung Yong-jin is the vice president of Shinsegye Group, owners of E-mart, a Korean version of Walmart, and grandson of the founder of Samsung. His challenger, Moon Yong-sik, is a controversial figure. While most of the public would call Moon a left-leaning maverick, those on his side praise him as a warrior who fights bravely against the government. Moon is the representative of Nowcom, owners of Africa.TV, an online broadcasting service which became widely known to public after its live broadcast of the 2008 mass protest which led to Moon's imprisonment for copyright violations.

The crossfire started with Moon's out-of-context provocation regarding a comment by Chung on his workers’ welfare. Chung, shocked at Moon's sudden attack, initially thought the tweet had somehow been mistyped. Moon addressed social issues in two or three tweets, and among them was criticism of E-mart's sale of pizza, which caused the closure of local pizza parlors. The small fire turned into a conflagration as Chung brought up Moon's prison record and almost called Moon a “left-winger”. Below is a summary of the Twitter shootout:

정용진(@yjchung68) : 지난 19일 신문에 게재된 저희 회사 임직원 복지혜택 확대관련 내용입니다.직원들이 사랑하는 회사가 될수 있도록 앞으로도 계속 전진^^
문용식(@green-mun) : 수퍼개점해서 구멍가게 울리는 짓이나 하지말기를..그게 대기업이 할일이니?”
정용진 : 나우콤 문용식 대표님이 저에게 보내신 트윗입니다 마지막 반말하신건 오타겠죠?
문용식 : 오타는 아니구여.중소기업 입장에서 순간 화가나서 한말이지여. 피자팔아 동네피자가게 망하게하는 것이 대기업이 할일이냐구여? 주변상권은 다 붕괴시키면서 회사직원복지만 챙기면 되는거냐구여?
정용진 : 이분 분노가 참 많으시네요 반말도 의도적으로 하셨다네요 네이버에 이분 검색해보니 그럴만도 하세요
문용식 : 분노없이 지금 이 사회를 어찌 살겠어요? 정부회장도 좀더 안목을 키우시길. 달을 가리키면 달을 봐야지, 손가락끝만 쳐다보면 되나여? 대기업의 바람직한 상생의자세를 살펴봐야지, 반말들은것만 가슴에 담아두나여? 쯪쯪. […]
정용진 : 결국 이분 수퍼마켓과 피자얘기에서 불법상속 비자금얘기 까지 하시네요. 그래도 말투는 맘에 듭니다 ^^

Chung (@yjchung68): “This part is from an article published on the 19th of last month about what our company did to extend the welfare of our employees. To become a company that endears itself to its members, we will keep progressing forward :)”
Moon (@green_mun): “You stop making those small supermarkets cry by opening a gigantic market…Is that what you big corporations are here for?”
Chung (Retweeting Moon's tweet): “This is what Rep. Moon of Nowcom tweeted me. You must have mistyped, Rep.Moon, the last word-the crude language.”
Moon: “No. It wasn't at all a mistake. I used those words because I lost my temper while standing up for small business owners. Selling pizza in your place [referring to E-mart] drives small local pizza places to bankruptcy. Is what you big corporations do? Does it make sense to take care of your own people's welfare, while destroying all the small markets around you?”
Chung: “You are filled with anger. You even intentionally used crude words [Note: This rarely happens between business men in their forties and fifties, let alone between two well-known figures]. Based on what's profile says about you, it's hard not to (for you to speak rude).”
Moon: “How we live in such society without anger. Vice president Chung, you must have better perspectives on the society. When a finger points to the moon, you should be looking at moon, not at the finger pointing the moon. I told you to have the concept of co-existence as a big corporation, but you, instead of listening to the content of my words, only took in the crude language. Tut-tut.” […]
Chung: “So you brought all the huge issues like the illicit inheritance and the corporate's slush fund when we actually started off from the pizza and the supermarket. I kinda like your style, though.”

Moon later thanked Chung—sarcastically—for retweeting his aggressively worded tweet to his tens of thousands of followers and for mentioning the prison record Moon acquired by breaking rules regarding the coverage of protests, as those actions helped Moon gain new 200 followers overnight. Twitter users and bloggers expressed great excitement at having witnessed a live public battle, especially regarding one of hottest issues in Korea.

Image of Homeplus in Korea

Both multinational and home-grown SSMs are present in every district of Korea's smallest cities. E-mart, Lotte Super, GS Supermarket (which spun off from LG Groups) and Homeplus (a mega-mart run by Samsung-Tesco) are the major SSMs dominating cities and towns. Local vendors and small business owners face increasingly tough competition from these retailers, who can offer lower prices, larger stores and more services.

Action to Revive Small Business Owner (Sajangnim240 Cafe), is one interest group fighting for small merchants. One netizen reported on the group's web site that a mega mart in his vicinity had opened so discreetly that few in the area noticed until the establishment's grand opening day. People presumed the mega mart had done this to give potential complaints less time to build momentum and cause permission to build the SSM in the local commercial area to be revoked.

Even though there are guidelines that place restrictions where SSMs’ can be located, and make it compulsory for companies to issue notifications prior to building SSMs at provincial level, a strong bill that could block or limit the establishment of SSMs is in its preliminary stages. As the bill is delayed in the National Assembly, more people are expressing concerns. A survey done by the Korea Small Business Institute in August 2010 (posted on the Sajangnim240 site) shows that there has been a significant decrease in sales by small businesses due to the mushrooming SSMs. (The report below had uses the word ‘SSM’ to refer the global mega markets. The term ‘mega marts’ has been adopted to indicate home-grown mega market chains)

대형마트 및 SSM 진출전 3년과 진출 당해년을 포함한 진출이후 3년간 매출액을 비교해본 결과 점포당 월평균 4,132천원의 매출이 하락하였으며, 그 비율은 28.0%가 감소한 것으로 나타났다…보다 심각한 사실은 대형마트•SSM 진출후 매출액의 감소폭이 점점 커진다는 사실인데, 시간이 지남에 따라 피해의 누적효과가 발생하여 회복이 점점 어려워진다는 것을 의미한다…고객의 변화를 보면, 대형마트•SSM 진출시점을 기준으로 급격히 고객 감소한 것으로 나타났는데, 점포별 일평균 22명의 고객이 감소하였으며, 감소율은 37%에 달하는 것으로 나타났다.

When one compares the sales of small businesses for three years before and after the advent of SSMs and mega marts (the survey carried out for six years), the results show that monthly sales have decreased by 4.132 thousand won on average (USD$3,600) after the arrival of the gigantic marts, which represents a 28 percent drop in monthly sales… Worse, the decrease in sales has steadily accelerated, which means the damage from the mega markets is accumulating and the the chance of recovery is becoming more unlikely…When we look at the fluctuation in the number of customers, a small store had lost 22 customers per day, or is 37 percent of its daily traffic.

Lee Sang-hoon posted an aticle on theDaum Agora site, stressing that regulating SSMs is pointless at this stage where the Korean market is already saturated with them. According to Lee, small business owners need to save themselves and the role of the government is to assist their survival with proper education on business skills and various public services:

동네 소매시장은 이미 SSM이 있건 없건 간에 완전경쟁시장이다. 편의점은 몇걸음 가기도 전에 연달아 나오고 목좋은 곳마다 이미 동네 유지들이 기업형 대형 마트를 열어 영업하고 있다. 그외에 후미진 골목들은 영세한 구멍가게들이 다닥 다닥 붙어 있다 싶이 하며 서로 경쟁하고 있다. 이미 우리 자영업시장은 미국이나 일본에 비해 경쟁이 매우 치열하고 소득의 양극화가 상당한 수준이다…우리가 진짜 해야 할 일은 메이저 리거들이라 할 수 있는 편의점, 동네 대형 수퍼마켓, SSM들의 경쟁에 끼어드는 것이 아니라, 실업 대신 어쩔 수 없이 장사를 선택한 영세 소상공인을 돕는 것이다.

Whether there are SSMs or not, we have formed a perfect competition market. There are convenient stores only a few footsteps away and local rich people have already built mega markets in good spots. Small markets are jammed together like sardines in the rest of the less popular streets and compete with each other. In Korea, competition between markets is steep and the polarization (of market power) is substantial, compared to US and Japan’s market situation… What we should be doing is not to interrupt the fights between the major leaguers which are the convenient stores, local mega markets and SSMs, but to help the small marketers who choose to open a store instead of being unemployed (to survive the fight).

A harsh fact of life: people need to take care of themselves. But it is the government who should put on the brakes when invincible giant markets encroach upon small business owners’ territory, or at least give the latter some time to prepare for a fierce battle. This is a common courtesy granted to the weaker player in any game, but it is gradually disappearing.

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