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495. The Story of Korean Social Economy – Happiness Sharing Mart

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Coop Name: Happiness Sharing Mart Co-operative N° of Employees: 51
City: Gangjeong N° of Members: 20
Country: South Korea Year of formation: 2012
About this coop:

Happiness Sharing Mart Co-operative is the first supermarket in Korea to be operated by a workers’ cooperative. Starting with Happiness Sharing Mart, the co-op opened its second store in 2016. They also opened ‘Berry Jeju’, an online and offline shopping mall that sells Jeju specialties and cultural products, ‘Seomchae’, a local food buffet restaurant, and ‘Aewol Barbeque’, a local food restaurant where young and middle-aged people are given opportunity to start their own business. In 2017, the company also opened the first franchise convenience store business, which is called ‘Concoop’, a compound word of ‘convenience store’ and ‘coop’. The owner of the convenience store should sign a pledge to respect the clause ‘labor rights’. In other words, they need to guarantee the minimum wage, give enough rest time for employees, and much more.

Source: nanummartjeju.kr
Photo Credits: nanummartjeju.kr

Happiness Sharing Mart Co-operative is the first supermarket in Korea to be operated by a workers’ cooperative. This start was initiated by people who were involved in campaigns against the special law regarding the development of Jeju Island and the construction of the Jeju Naval Base in Gangjeong village. They established their Happiness Sharing Co-operative in 2012 to help create an economic community in which civic societies, social groups or community work together to solve their daily issues.

Their first start was the grocery store business. There were good reasons for opening a grocery store. In 2011, Jeju government passed regulations restricting supermarkets run by big conglomerates from entering the island. Moreover, compared to workers in other regions, supermarket employees in Jeju Island faced poor working conditions because they could not benefit paid day-offs or overtime pay and most had to work average over 10hours a day.

Just in time, the grocery owner of the first floor of the building where the co-operative’s office stood offered to sell the store to the co-op. 10 of the employees that were already working in the store agreed to join the co-op and the 892m2 area reopened with a new name “Happiness Sharing Mart.”

The priority goal of Happiness Sharing Mart was increasing the employees’ wage. They graded the workers’ wages into 1-4 according to their work experience and as of November 2017, the minimum wage was set to KRW 7,000 an hour (the statuary minimum wage was KRW6,470 as of 2016). Thus, workers who got paid KRW 1.2 million per month for working 10 hours a day for 6 days a week now earned KRW 1.6-1.7 million for working 8 hours a day. Sales also rose 20% in just half a year.

happymart-mainre

Concoop convernience store

In 2014, the co-op shortened the working day to five days a week. Unfortunately, this challenge ended in failure. To succeed this, they had to increase the number of employees from 13 to 22, but the deficit widened as labor costs increased without any change in sales. Currently, sales have stabilized, maintaining 18 employees.

The co-op opened its second store in 2016, the fourth year of its establishment. They also opened ‘Berry Jeju’, an online and offline shopping mall that sells Jeju specialties and cultural products, ‘Seomchae’, a local food buffet restaurant, and ‘Aewol Barbeque’, a local food restaurant where young and middle-aged people are given opportunity to start their own business. In 2017, the company also opened the first franchise convenience store business, which is called ‘Concoop’, a compound word of ‘convenience store’ and ‘coop’. The owner of the convenience store should sign a pledge to respect the clause ‘labor rights’. In other words, they need to guarantee the minimum wage, give enough rest time for employees, and much more.

However, in order for the franchise business to settle, there is a need to secure a distribution network and logistics systems. For now, Happiness Sharing Mart Co-operative will run two or three convenience stores directly as pilot businesses.

The biggest problem to be solved at hand is capital. The half of the second store’s capital was borrowed from the Korea Credit Guarantee Fund. The membership rate of members stays at 40%, with 20 of the total 51 employees registered. To be a member, they contribute KRW10million as an investment. In order to increase the membership, education as well as dividend system and discount on products are being considered.

Sales are currently around KRW7.5billion, but it aims to reach KRW10billion within three years. Since 2015 when they went into the black, they have returned two-thirds of its profits to the community.

The Happiness Sharing Mart Co-operative was awarded a prize from the Ministry of Strategy and Finance in 2015, and was selected as Excellent Social Economic Enterprise and Excellent Employment Enterprise in Jeju Island in 2016.

Source: The Co-operative Journal, winter 2017 (iCOOP Co-operative Institute)

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