How Korean co-ops are responding to the Covid-19 pandemic

Consumer co-ops have been at the forefront of efforts to support local communities

Co-ops in the Republic of Korea have been quick to respond to the Covid-19 crisis. From providing masks and free meals to continuing to stock up shelves, consumer co-ops have been showing how they can make a difference in their local communities.

The outbreak resulted in more members purchasing from iCoop Korea’s food stores. A federation of consumer co-operatives, iCoop runs 239 stores.

Sales rose 40% during February, compared to the same period in the previous year. Rice and noodles were among the most sought-after products. To cope with the increase in demand for some products stores put in place restrictions on the number of items per person. Customers have also shopped more online.

Daegu city was one of the most affected areas in the early stages of the outbreak, with 70% of all cases. As a result, iCoop increased supply to the area by 30%. Coping with the increased demand also required increased support from staff members, who even volunteered to deliver some of the orders using their personal cars.

At the end of February, when the number of infections was increasing in Daegu, the local iCoop members distributed 10,000 masks to their members. On 3 March they delivered 15,000 meals to local authorities to distribute to areas that had been most affected. During this period, the sector distributed lunch boxes, masks, and hygiene items to medical staff and local communities, particularly those who are having difficulty due to the suspension of social services.

But a decline in non-food businesses, coupled with school closures and lack of public procurement, affected many other co-ops and social enterprises.

iCoop also runs a Disaster Response Committee which, in collaboration with and Seed Foundation for the Social Economy of Korea initiated the Covid-19 Social Healing Project. A fundraising campaign, the initiative helped to raise KRW4.5m (£2,973) from iCoop member co-ops, an amount matched by a donation from the foundation. The funding will be used to support those disadvantaged as well as organisations in the travel sector and the social economy that have been impacted by the crisis.

In partnership with The Asia Pacific Alliance for Disaster Management Korea, the committee has provided lunch for two weeks to children in Daegu. School closures affect families who rely on the meals provided by the school to feed their children. The lunch boxes were prepared by small restaurants, which had been hit hard by the fall in demand due to the crisis. The project benefited from a KRW200m (£130,000) donation from the Hope Bridge Korea Disaster Relief Association. A total of 54 local restaurants prepared lunch boxes to 2,442 children, which were distributed through 110 local children’s centres.

In response to the crisis, iCoop is encouraging home working, where possible. The federation is also providing employees with two weeks worth of food that can boost their immunity. Prevention is an important area of work for the retailer, which last year launched a Natural Dream Food Cure & Research Foundation. The foundation runs a medical clinic and a healing centre where members can take part in programmes designed to promote healthy eating and exercising. The initiative aims to prevent the development of lifestyle-related diseases such as diabetes and high blood pressure, which have been fatal for some of those who contracted the coronavirus. iCOOP says it expects its business to help members protect their health in the future.

To show solidarity with the rest of the movement, individual co-ops and Korean federations have joined a network of 56 organisations to form a Social Economy Response Headquarters on Covid-19. Among those joining the network are iCoop, the Korea Federation of Workers’ Cooperatives and the National Cooperatives Association.

Initial research conducted by Korea Social Economy Network between 10 and 19 March showed that the sector is finding it difficult to maintain the same level of staff payment due to decrease in sales. Around 80% of social enterprises taking part in the survey said the labour cost was the most burdensome (80%). However, 55% also said they did not plan to adjust their staff’s employment status.

To address the problem, on 27 March the Social Economy Response Headquarters created an Employment Solidarity Fund to raise KRW1bn (£660,693).

Financial support will also be available for Korean co-ops through a Disaster Solidarity Response Fund launched by the Korea Social Value and Solidarity Foundation. Co-ops and social enterprises affected by the crisis will be able to apply for funding until 8 April. This will be in the form of a loan of less than KRW10 million, with an annual interest of 1.5%, and a one-year lump sum repayment. 

To qualify for loans, co-ops and social enterprises have to have suffered or expect a fall in profit of 50% or more, compared to the average of the previous three months or the same period a year ago.