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(Yonhap Feature) Giant retailer, traditional market put coexistence to test

2017/06/30 09:00

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By Choi Soo-hyang

GUMI, South Korea, June 30 (Yonhap) -- South Korea's largest discount chain operator E-Mart Inc. opened a new store for its private brand (PB) products at a traditional market in Gumi earlier in the week that will test if old and new ways of selling products can coexist and even prosper.

The alleys of Sunsan Traditional Maret in the city, some 261 kilometers southeast of Seoul, are filled with elderly vendors mostly selling homegrown produce on the street, just like many other old style markets in the country.

Stepping into a building inside the market, however, people find themselves in a totally different surrounding, with the hypermarket chain selling industrial products and young business owners running a nail salon, a photo studio and a coffee shop.

The supermarket store that opened Tuesday sells everything, but fresh food products in order not to steal customers from small business owners, with 17 young people that operate service-oriented businesses.

Amid the government's struggle to find a way for the co-prosperity of giant retailers and mom-and-pop shops, the conventional market in Gumi is putting this new business model to the test.

This photo taken on June 27, 2017, shows the Sunsan Traditional Market in Gumi, some 261 kilometers southeast of Seoul. (Yonhap)  This photo taken on June 27, 2017, shows the Sunsan Traditional Market in Gumi, some 261 kilometers southeast of Seoul. (Yonhap)

The seemingly awkward coexistence began with a proposal from a 39-year-old vendor Kim Su-yeon who runs a handmade soap shop at the market.

Kim is among eight merchants who were selected by the government last year to open stores at the traditional market to attract more young customers and vitalize the nearby area.

A year later, Kim is the only merchant left, with the seven others all gone out of business.

"I could get by thanks to regular customers, but the others just could not hang in there when the market was so depressed," the 39-year-old said.

The Sunsan market is where the third-largest street market in North Gyeongsang Province is held once every five days. When the street market is held, some 10,000 to 15,000 visitors come from neighboring regions such as Gimcheon to shop.

Yet, the popularity did not reach the 106 stores located in the building, which was modernized into its current form in 1993.

In this photo provided by E-Mart Inc., consumers look around its new store for private brand (PB) products inside the Sunsan Traditional Market in Gumi on June 27, 2017. (Yonhap)  In this photo provided by E-Mart Inc., consumers look around its new store for private brand (PB) products inside the Sunsan Traditional Market in Gumi on June 27, 2017. (Yonhap)

"Then I read the news about E-Mart's No Brand store opened inside a fishery market in Dangjin," Kim said.

E-Mart opened the store for its PB products under the name No Brand inside the market in the city, some 120 kilometers south of Seoul, in August last year. It marked the first time in the country for a supermarket to open in the same building as a traditional market.

"I thought getting E-Mart to come in would be a great way to attract more consumers," Kim said. "What we needed the most was to have more people around."

   Following Kim's proposal in February, the market's association received unanimous approval from shop owners.

It took less than three months for the 1,652-square meter second floor of the building, which was left empty for over two decades, to transform itself into the new supermarket.

Ahn Jang-jin, who runs a grocery store at the market, said he agreed to the proposal as the retailer said it would not sell fresh food.

"We would have to see how it goes, but at least more people will come to the area to visit the No Brand store and could possibly drop by other shops on their way," the 37-year-old Ahn said.

As word about E-Mart's new store spread, six more young merchants joined the government program to open shops inside the market this year, making the total number stand at 17.

The shops operated by the young vendors are located along the way to the No Brand store, as part of an effort to expose them to more visitors.

This photo taken on June 27, 2017, shows a children's playroom inside E-Mart's new store in Gumi. Consumers with receipt from the market can use the place at 2,000 won (US$1.75) for up to two hours. (Yonhap) This photo taken on June 27, 2017, shows a children's playroom inside E-Mart's new store in Gumi. Consumers with receipt from the market can use the place at 2,000 won (US$1.75) for up to two hours. (Yonhap)

"If our Dangjin store was an attempt to test if coexistence between a giant retailer and traditional market is possible -- the new store in Gumi is an experiment to see if young merchants can together reap the benefits as well," an E-Mart official said.

Conventional markets in the country have been on a steady downturn with many failing to attract consumers despite the government's continued support.

From 2012, big-box discount chains are required to close their shops twice a month on Sundays, and limit operation from midnight to 8 a.m. everyday.

Still, many customers just opt to visit the discount stores on another day, instead of heading to the traditional markets.

Professor Weon Jong-ha at Inje University said conventional markets should seek ways to remain independent from big hypermarkets and not to rely too much on government regulations.

"Unless they find means of maximizing their strength, they will only become subordinate to conglomerates in the end," the professor said.

Traditional markets should strive to develop content that stimulates consumers' wish to purchase goods and create a rapport between vendors and buyers, which is something that discount stores cannot do, the professor pointed out.

"It is all the more reason why young merchants, who are comfortable with using social media, and full of creative ideas should come in to the old markets to start their own business," he said.

This photo provided by E-Mart Inc. shows the entrance to its new store in the Sunsan Traditional Market in Gumi on June 27, 2017. (Yonhap) This photo provided by E-Mart Inc. shows the entrance to its new store in the Sunsan Traditional Market in Gumi on June 27, 2017. (Yonhap)

scaaet@yna.co.kr

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