SOUTH KOREA. Lotte Duty Free has underlined its commitment to small and medium-sized enterprises (SMEs) by hosting a ‘Fair Trade Agreement’ ceremony with 60 Korean business partners.

Lotte Duty Free CEO Jang Sun-wook oversaw the event, which also saw the travel retail giant unveil a range of joint growth initiatives. These included setting new standards for sharing promotional costs, improving payment terms and generally enhancing business relationships.

Nine SME brands attended the signing. Lotte Duty Free said it will create fair standards across several areas:

  • Selecting partner companies; starting and stopping transactions;
  • Setting appropriate standards and ensuring sufficient consultation over promotional expenses and fit-out and merchandising cost sharing;
  • Enhancing standard transaction contracts to ensure fairness;
  • Improving partnership practices, including enhanced payment terms and methodology.

Lotte Duty Free Head of the Product Strategy Division Kim Tae-ho (left) and Mediheal Cosmetics CEO Kwon Oh-seop sign the Fair Trade Agreement

The Fair Trade Agreement partner is the first target of Lotte Duty Free’s previously announced ‘Win-Win Financial Programme’. Under the terms of a business agreement signed in April with the Korea Export-Import Bank, the bank can assist with funding and cash flow management to support the SMEs.

Lotte Duty Free established a Corporate Social Responsibility (CSR) committee last year in an effort to establish better communication and improved business relations with SME partners. A CSR Committee is empowered to swiftly resolve any difficulties that arise. Its findings also assist with annual reviews of  SME supply agreements.

“Lotte Duty Free will continue to pursue joint development with partner companies in the future,” said Jang. “The Fair Trade Agreement today is especially meaningful because it is a continuous development of the joint declaration of growth with partner companies announced last year. We will do our best to fulfill our responsibilities more faithfully.”